It’s the second-largest cryptocurrency after Bitcoin. Etherium uses Blockchain technology which is a decentralized computing network.
What is Ethereum?
“Ethereum is a blockchain-based software platform that is primarily used to support the world’s second-largest cryptocurrency by market capitalization after Bitcoin. Like Bitcoin and other digital currencies, Ethereum is also used to send and receive value globally without the intervention of any bank and government“
By now you probably know that Bitcoin is a form of decentralized money, and if you still have some questions about what that means or how it works, then you might consider revisiting this article, “what is Bitcoin
In this article, we will discuss – What Ethereum is; What Ether is; How they work and What the future holds for this Blockchain project? I’ve divided this guide about Ethereum to make it simple and easy to follow.
Who Invented Ethereum?
With thousands of games, decentralized exchanges, and finance apps running on top of the Ethereum blockchain. This extended functionality for the blockchain was envisioned in 2013 by Vitalik Buterin. In the months that followed, Vitalik joined with several other people to launch the new blockchain, but usually only he, and Gavin Wood, are referenced as the co-founders of Ethereum and the Ethereum Foundation.
What will Ethereum be worth in 2021?
Question arise what will Ethereum be worth in 2021? The Ethereum main net was launched in July 2015 and was very quickly widely adopted, which led Ethereum to climb to number two of the market cap within just a few months from the launch, and except for very brief periods, it has kept that place ever since.
How they work and What the future holds for this Blockchain project?
Ethereum, of course, is not the only smart contract blockchain out there. Several “competitors” have emerged during the years, like EOS, Tron, Algorand, Cardano, and many, many others, which look to build on the successful model of Ethereum while overcoming some of the limitations. Ethereum, however, is still the most popular smart contract blockchain, with almost half of the top 100 coins running on the Ethereum Network. But Ethereum does have shortcomings, with the most significant being its limited scalability. This became abundantly clear during December 2017.
So to summarize the pillars of blockchain technology – A blockchain is a decentralized, distributed public ledger where all transactions are verified and recorded. Blockchains recording and storage protocols make it such that once new data is verified it is unmodifiable, it’s distributed across a vast network of computers around the world so it’s hard to destroy and no one person or entity controls the data or network creating a completely transparent environment.
If you would like to learn a more in-depth explanation – What blockchain is? and Why it was developed? Click on the link below to check out my blockchain guide.
Is it as revolutionary as Bitcoin Or What will Ethereum be worth in 2021?
Now that you’re familiar with some of the blockchain’s important features and the role blockchain plays in Bitcoin and Ethereum. Bitcoin and Ethereum are both use cases of Blockchain technology with different purposes. So how is Ethereum’s blockchain-based software application able to operate if it’s not owned or controlled by a central entity or authority? The answer to that question leads us to Ether.
What Is Ether?
Many people commonly use the words Ether and Ethereum interchangeably, when they are two different things. Ether is the Ethereum blockchain’s native Cryptocurrency.
It operates similarly to Bitcoin and that it’s a digital currency that can be transferred to people around the world, used as a form of payment, or act as a store of value. However, Ether was created for an entirely different purpose.
So why does Ether exist?
In the previous article, I explained the similarities between Bitcoin and Gold. So if Bitcoin is digital gold, Ether could be described as digital Oil. Ether was designed to fuel the Ethereum Network. Going back to the decentralized pillar of blockchain technology, we discussed how open source software is distributed across a vast network of computers around the world.
Today another industry has emerged to saturate the network: Ethereum Defi, Decentralized Finance. This is a collection of dApps, with Compound Finance being the most popular amongst them, that offer traditional banking products on the blockchain, without the need for banks. Users can lend their ETH, and other Ethereum ERC20 tokens, usually stablecoins like DAI and USDT, and other users can borrow them, by providing collateral with their crypto. The borrower pays an interest, which goes to the lenders as a reward. And, of course, everything happens automatically and on-chain, with the use of smart contracts. In that way, one can get access to money, without having to liquidate their funds and, most importantly, without having to go through a bank.
This is Defi’s most significant promise to bring banking services to the millions of the unbanked. Although Defi gets the lion’s share for congesting the network, it’s Ethereum’s overall popularity that’s led to it. Most Tether tokens are now ERC20 tokens, decentralized exchanges, like the Uniswap run exclusively on Ethereum, even whole virtual worlds, like Decentraland, live on the blockchain. And again, not to mention the thousands of tokens that run on top of it. The applications of smart contracts are endless, and Ethereum is the spear’s head.