What is Ethereum?

what is ethereum

May 10, 2019

FrederikNielsen
25

What is Ethereum?

Ethereum (ETH, ether) is both a cryptocurrency and a functional decentralized environment that truly revolutionized the entire IT industry. This platform allows developers to create and deploy decentralized applications (dapps) on it, such as Status or Metamask. As the two leading cryptocurrencies by market capitalization, Bitcoin and Ethereum are often mentioned in the same context. Therefore, it can be difficult for beginners to immediately understand what ethereum is and how it differs radically from bitcoin.

what is ethereum

Who are the founders of Ethereum?

The creators of the ether, among whom Vitalik Buterin stands out when launching this platform were pursued by the standard goals for the authors of cryptocurrency – improving Bitcoin. However, it is difficult to name the ether Bitcoin 2.0. They are somewhat similar, but there are a number of conceptual differences between them.

How does it work?

The Ethereum network is a publicly available platform that is decentralized and simplifies the use of blockchain technology. Ethereum cryptocurrency is a payment instrument with great potential. On the basis of the blockchain of Ethereum, many issues can be solved, for example, to certify contracts without the involvement of a notary. Unlike Bitcoin, ETH has more prospects, and its leadership (according to many experts) is only a matter of time.

Methods of storing Ethereum

You have several options for storing ETH. You can leave them on the stock exchange, move them to your wallet on your computer or mobile device, to a stand-alone hardware wallet or to a paper wallet.

From a security point of view, it is not recommended to leave a cryptocurrency on the exchange. Mobile and desktop wallets are a bit safer, but still at risk of hacking. The safest option is to move your tokens to a hardware or paper wallet.

Ways of earning Ethereum?

ETH cryptocurrency in 2017 made a significant spurt in its value, in parallel taking the second place in terms of capitalization among other cryptomonet. This alone was enough for the broadcast to appear on almost all major exchanges, and also to appear in various online exchangers.

The mining option requires an initial investment, be it independent mining of ETH, or the use of cloud services. Ether is one of the main options for “miners” who work with pools. Mining takes place on farms made with powerful graphics cards from Radeon and GeForce. But in the fall of 2017, the first mining ASIC for Ethereum appeared. After that, active conversations about the transition to the PoS protocol began. As soon as the network makes this transition, mining of the ether will become economically unprofitable. Therefore, ETH is difficult to consider as a long-term mining option.

what is ethereum

Smart contracts

Smart contracts are the very “secret ingredient” of ethereum. The concept of smart contracts was proposed in 1996 by scientist Nick Sabo. Smart contracts are computer programs that control the transfer of digital currencies or assets between the parties, if certain conditions are met. Ethereum provides the basis for these contracts and at the same time has a level of functionality that is inaccessible to most other cryptocurrencies. It is assumed that the ethereum will find application in areas such as identification systems, insurance payments, etc.

Pros and cons of Ethereum

When it comes to the advantages and disadvantages of Ethereum, it is important to clarify what is at stake: the platform or the cryptocurrency (ether). To begin, let’s talk about the ether – the token (cryptocurrency). There are no serious drawbacks with Ether compared to Bitcoin and other popular coins. Moreover, the network quickly processes transactions, which potentially increases the payment potential of ETH.

Experts agree that one of the key factors in the development of cryptocurrency was the emergence of the full version of Homestead. From this point on, using the platform, you can create applications and projects that are decentralized in nature and using smart contracts. As a result, opened the way for investment. It is also an important advantage that universality can be considered – it supports various programming languages and algorithms of different complexity, and smart contracts are used in different areas.

Frederik Nielsen
Frederik Nielsen

I’m a freelance writer and full-time curious person. My main interests are philosophy, politics, art, culture, science, and how they’re all interlinked. When I’m not writing, I’m fronting a band, producing records, and making videos. I’m also currently working on launching a YouTube channel that will focus on culture and politics. I think blockchain technology is fascinating because of the huge potential it has to revolutionise not only the financial sector, but society as a whole.

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