What Is Ethereum?
Doing some Ethereum research are we? Well, we are here to help!
Sometime back, blockchain was commonly associated with Bitcoin. However, the technology has other areas of application apart from Cryptocurrencies. Until relatively recently, it was quite a challenge for one to create a blockchain application as the process was not only expensive but also required a complex background in mathematics, Cryptography, and coding. However, the emergence of Ethereum has made it possible for one to develop different decentralized applications in a faster and cheaper way.
Ethereum can be defined as a blockchain-based open software platform that allows developers to create and release decentralized applications (Dapps). Vitalik Buterin invented this awesome platform that went live in 2015. Ethereum, which also features smart contracts, has indirectly led to increased usage of blockchain technology. Ether, which is a kind of a virtual currency, fuels this platform.
Comparison Between Ethereum And Bitcoin
Bitcoin and Ethereum are both distributed public blockchain networks. However, the two are substantially different in purpose and capability. Whereas Bitcoin only offers a peer-to-peer, electronic cash system that supports Bitcoin payments online, Ethereum blockchain was designed to facilitate the running of the programming code of any Dapp.
While Bitcoin miners mine the coin, Ethereum miners work to earn the token Ether. The coin is a tradable Cryptocurrency that application developers also use on the network to pay for transaction fees and services.
A smart contract can be defined as a computer code that automatically executes whenever certain conditions are met. Specifically, it can facilitate the exchange of anything of value such as shares, property, content, or money among others. Smart contracts run as programmed without third-party interference, fraud, downtime, and censorship.
Advantages Of Ethereum
• Dapps running on Ethereum have zero downtime and cannot be switched off.
• Given that there is no central point, applications running on this platform are safe from fraudulent activities and hacking attacks.
• Ethereum is based around the principle of consensus making Dapps incorruptible and tamper-proof.
• Ethereum makes it impossible for a third party to make any changes.
One of the major disadvantages of decentralized apps is that they rely on a smart contract code created by people. Consequently, they are as good as those who write them.
Ether (ETH), the Cryptocurrency that fuels Ethereum platform is a popular coin. According to coinmarketcap.com, it has a market cap of about $12.7 billion making it the third largest altcoin after Bitcoin and XRP. ETH is paired with a high number of fiat currencies and other Cryptocurrencies on different exchanges.
Unlike Bitcoin, the total supply ETH is not capped. During its initial public sale in 2014, 60 million coins were created. The early backers and Ethereum Foundation took 12 million of these coins, with most of the funds channeled towards development.
Currently, ETH just like BTC is mined through a consensus algorithm called proof of work. However, Ethereum is expected to switch to a proof of stake algorithm. The new mining process is said to be more efficient and needs a smaller mining reward.
Just like most of the other Cryptocurrencies, you can get your first ETH through mining or buy it in different exchanges. You can also have your customers pay for different goods and services in this token. For storage, you can use mobile, desktop, hardware, or paper wallet.
We hope we have helped with your Ethereum research and if you’d like to learn about other cryptocurrencies, we’ve put together a series of useful summaries for you here!