Table of Contents
What Ethereum is?
Ethereum is an open platform based on blockchain, which helps developers create decentralized applications. The platform has its own cryptocurrency – Ether (ETH). It is mined and used as a means of payment for services within the Ethereum Network. Users also trade them for speculative purposes.
Despite frequent comparisons between Ether and Bitcoin, it is important to note that these two popular cryptocurrencies have unique characteristics that set them apart from one another.
Difference between ETH and BTC
First, it is worthwhile to understand blockchain. It is a database that is stored immediately on multiple computers and transmitted over the internet. In addition, these data cannot be changed and anyone can see them. This made the system as transparent as possible.
Blockchain technology is used in various tasks. It is a platform for creating and running applications. Internet for mail services. Cryptocurrency is one such application of blockchain.
Both cryptocurrencies are decentralized networks based on blockchain technology. However, their goals differed.
Bitcoin has one application on the blockchain – a system for transactions of the digital currency BTC.
ETH uses blockchain to execute the code. Using this code, any decentralized application can be executed.
Previously, the creation of blockchain-based applications required extensive knowledge of programming, cryptography and mathematics. Therefore, it requires a significant amount of time and resources. Ethereum changed it. It provides developers with tools to create decentralized applications.
One of the distinguishing features of Ethereum compared to other applications based on blockchain is smart contracts.
What are Ethereum smart contracts?
A “smart contract” is like a computer program that lives on the Ethereum network. It has its own address, and is composed of instructions and information. It can perform tasks automatically when certain conditions are met, such as transferring money when a task is completed.
Smart contracts trigger the code when certain conditions occur; therefore, the contract works automatically and launches a certain process: enforcement, management, execution, or payment.
All blockchains are capable of processing codes, but they normally have many restrictions. Consequently, this usually results in a set of limited operations. For example, Bitcoin allows only transactions.
Developers can create any required operations (applications) without limitations. The founder of the Ethereum, Vitaly Buterin, says:
“The Bitcoin community sought to make separate applications and did not try to cover each use case in the “protocol for all cases”. They approached the solution of the problem in the wrong way”
The platform creates a virtual machine (EVM). Therefore, EVM allows the execution of any programming language program. In addition, if you have enough time and memory, this greatly simplifies the creation of applications based on blockchain for programmers. In addition, this greatly simplified the creation of applications based on the blockchain for programmers. Consequently, it is no longer necessary to create a new blockchain for each application.
How to buy ETH? Where to buy Ethereum?
ETH like Bitcoin has its own software – the wallet. You simply download it, install on your device and the software will generate your wallet number, where all your ETH will be stored. You can also buy ETH using their software using bitcoin or your card.
Like many other cryptocurrency, you can easily buy it on any exchange like Binance, Bitfinex, Bittrex, OKEx.
Pros and cons of the ETH platform?
- Continuity of data. Hence, no one can change it.
- An absence of censorship and interference. Therefore, applications work on the network according to the principle of reconciliation.
- Security. Due to cryptography, the platform provides security and protects itself from hacker attacks, as well as from actions of fraudsters.
- No downtime. Applications do not freeze or crash.
- The possibility of mistakes in code. People write the code of the contracts and they can make mistakes. An error in the code is harmful to the contract. You can fix the error by rewriting the code, which contradicts the essence of the blockchain.
The use of Ethereum
First, the possible use of ETH depends on your goals: you can use the technology to create new applications or simply use it to pay for services/speculation, invest or create NFT. Let us begin with the first example.
Ethereum is especially relevant for decentralizing centralized services. This is also true for intermediary services. Numerous projects have used it to create decentralized autonomous organizations (DAO).
The DAO is an autonomous and decentralized organization without leadership. The program code regulates the work of such organizations in the form of a set of smart contracts in the network. Consequently, there is no need for employees or offices. It is noteworthy that the owners of such organizations are users who purchased tokens. This is similar to a deposit with a right to vote.
Ethereum is developing and consequently pushing the world economy towards decentralization. Nowadays, the application of the ETH blockchain has penetrated a wide range of spheres: finance, education, insurance, public services, healthcare, and other sectors.
Most importantly, people purchase ethers for payment of services, participation in ICO, and speculation.
Stay informed with the latest Ethereum news by keeping in touch with our updates.