When bitcoin came into existence, it offered us the chance to buy and sell without the need for payment providers or banks. But Ethereum took things a step further. Just like the Internet that has over the years, transformed the way we communicate, Ethereum has the potential to change the way we exchange anything of value such as money.
It’s a decentralized platform that’s not controlled by a single governing entity. It doesn’t have a central point of failure like most existing organizations with a centralized system of governance. Back in 2013, Vitalik Buterin came out with the white paper of Ethereum and the project was finally launched in 2015.
Why Ethereum?
Ethereum is decentralized, unlike most businesses, online services and enterprises that are established on a centralized system of governance. The centralized system of governance has been in existence for hundreds of years and history has shown repeatedly that it is a flawed system. Unfortunately, its implementation is still required to run businesses whenever the parties involved don’t trust themselves.
In a centralized system, there is a single authority in control and this also implies that there would be a single point of failure. This is the primary reason why online servers and apps making use of a centralized approach are highly vulnerable to power outages and hacker attacks.
Presently, most of our online data such as photos, email, social media posts as well as important financial information are all stored on servers that are managed by governments and organizations in centralized servers. This also applies to most apps that we use every day.
So, as a user, you lack control over the way third parties manage your personal data and keep records of all your online activities. We can’t even rule out the possibility of hacks as well as the misuse of data.
The Ethereum blockchain offers solutions to some of the issues associated with centralized platforms. It is often seen as — a programmable blockchain or “global supercomputer” that’s decentralized and free from the influence or control of a central authority.
The network doesn’t have a single point of failure like centralized systems. This is because it’s run from thousands of volunteer computers also known as nodes in different locations around the globe. Since it’s almost impossible for all the volunteer computers to go offline, the Ethereum blockchain can never go offline.
It also addresses the issue of privacy as the personal information of users remain on their computers. Creators of content like videos, pictures, apps and several others will have full control of their content without the need to adhere to the rules that hosting services such as YouTube and App Store impose on them.
Ethereum is completely different from Bitcoin and both projects have different goals. Bitcoin was created to be a money-transfer system that’s supported by blockchain technology. Ethereum expanded on the capabilities of the technology behind Bitcoin to provide more services.
The Ethereum blockchain already has its coding language (Solidity), payment system (Ether), and Internet browser. The Ethereum blockchain-based platform gives developers the freedom to build and even deploy decentralized apps. Such applications can either be decentralized networks of already existing concepts or completely new ideas. One of the benefits of using the Ethereum blockchain is that it eliminates the need for third parties
There are other digital currencies and decentralized applications (DApps) existing on the Ethereum blockchain. You can find out more about some of these DApps by getting “The digital World of Crypto riches.” The book which is a collection of top digital currencies, showcases the potential use cases of cryptocurrencies. It is an ideal source of information for anyone interested in knowing more about the crypto world.
Since the Ethereum network acts as a decentralized Internet and app store, it requires its currency to enable users to make payments for the computational resources that are needed to successfully run a program or application. So, the native currency that’s used for making payments on the Ethereum network is Ether (ETH). Ether acts as a fuel for all the decentralized apps built on top Ethereum network.
Key Features and Benefits of Ethereum
Take a look at some of the features and uses of Ethereum:
- The Ethereum platform grants developers access to develop and deploy smart contracts. A smart contract has to do with a computer code that can facilitate the exchange of shares, funds, property, content and other valuables. It acts like a self-operating computer program that can execute automatically once specific conditions have been satisfied.
- Ethereum Virtual Machine (EVM) is the underlying technology of Ethereum which includes the software and architecture. It enables users to interact with the platform.
- The Ethereum blockchain allows developers to create consolidated apps known as decentralized applications.
- Ethereum can be used to improve voting systems by eliminating voting malpractices to ensure a transparent and fair democratic process.
- It can significantly transform the banking system even as many financial organizations are exploring ways to use it. In fact, the Ethereum blockchain has the potential to deliver its core principles of efficiency, trust, security and transparency to any industry, service or business.
- Since the network runs on blockchain technology, it also benefits from all the features of the technology.
If you would like to obtain Ether, then there are three ways to do it. You can purchase it from exchanges like Coinbase, Poloniex, Bittrex, Binance and several. You can sell goods and services and get paid with ETH or mine the cryptocurrency. Presently, purchasing Ether from an exchange is the easiest and most common way to get it.
Based on the PoW system, miners are required to solve complex mathematical problems while confirming transactions that take place on the network. In return, they get rewarded with ETH for every single block they mine.
Although it’s still possible to mine Ether, the implementation of Ethereum 2.0 will eventually eliminate the need for miners since the Proof-of-Work algorithm will be replaced with the Proof-of-Stake system. A look at CoinMarketCap shows that Ethereum is currently occupying the number two position — a position it has always maintained for several years.
Although Ethereum, just like Bitcoin has been in existence for several years now, it was only a few years ago that it began to gain the attention of mainstream media and the general public. With the implementation of Ethereum 2.0, some of the issues the network is currently experiencing such as the issue of scalability will be resolved. A good number of experts believe that it is a disruptive technology that will not just completely transform how the Internet works but is capable of revolutionizing industries and services that have existed for many years.
