Ethereum is an open-source blockchain that is known mainly because of its smart contracts functionality. It also serves as a basis for the Ethereum (ETH) cryptocurrency. In this article, I will be discussing what Ethereum is.
Keep reading till the end to find out more information on the same!
About Ethereum
At the very core, Ethereum is a decentralized software platform on a global scale. It is also powered by blockchain. It is very commonly referred to as cryptocurrency which is Ether, popularly abbreviated as ETH.
Ethereum can be used by anyone for creating any secure form of digital technology. It also has a token that is designed to pay for work that is done to support the blockchain. The participants can also use it to pay for tangible services and goods – if those are accepted.
Ethereum is designed in a way that appears programmable, secure, scalable, and decentralized. It is a blockchain of choice for enterprises and developers in creating technology which is based upon its capacity to change how the industries operate and how the common folks go about their lives daily.
Tip: At the time of writing ethereum (ETH) price usd stands at $1,9606.09.
How Does It Work?
The idea was originally coined (no pun intended) by Vitalik Buterin. He published a white paper back in the year 2014. The Ethereum platform was launched in the year 2015 by him and Joe Lubin. The two founders of Ethereum were considering blockchain technology’s full potential. This enables a secure and virtual payment method.
Ever since the launch of Ethereum, the cryptocurrency Ether has risen to become the 2nd largest cryptocurrency when it comes to market value. It is outranked only by one other form of crypto – Bitcoin.
Tip: According to Ethereum price prediction, ETH is going to be priced at $7,630 on average. The value of it is only going to spike more in the coming years and it might reach $9,800 on average by the year 2030.
Bitcoin VS. Ethereum: A Comparison
Ethereum is often likened to Bitcoin. While both cryptocurrencies have various likenesses, there are still some important differences.
The developers and founders of Ethereum describe Ethereum as the “world’s most programmable blockchain”. It positions itself as a programmable network that has many applications. Bitcoin, though, was created only for supporting the Bitcoin cryptocurrency.
Bitcoin has a circulation limit as well. The total number of Bitcoins that can be created at once is 21 million. On the other hand, there is no such limit to the creation of Ethereum or ETH. Although the process takes a lot of time and hence the number of Ethereum coins that can be minted gets limited to 122 million.
Tip: You need to keep in mind that the Ethereum value and nature of cryptos are such that it is extremely volatile. It is subject to change at any point in time. It is extremely unpredictable and can change in value at any given point in time.
Another notable difference between both cryptos is the way how the respective networks treat the transaction processing fees. The fees are known as the gas when referring to the Ethereum network. They are paid by the participants in the form of Ethereum transactions. While on the other hand, fees that are associated with Bitcoin get absorbed by a broader network surrounding Bitcoin.
Risks Related To Investing In Cryptos
Before getting started with investing in one, you need to understand that the nature of cryptos is vastly different from that of paying up with credit and debit cards. Here are a few things that you need to know:
- The payments made with cryptos are irreversible. Hence, you need to make sure that you do a background check on the seller before making the payment.
- The payments made with cryptocurrencies do not come with any form of legal protection.
- A little information about your cryptocurrency transactions is going to remain public. It is not anonymous.
FAQs ( Frequently Asked Question ):-
Here is a list of a few frequently asked questions that are related to Ethereum:
Ans: Investors can use many of the cryptocurrency exchange platforms that are available out there for both buying and selling Ether. Ethereum is supported by primarily dedicated exchanges like the Gemini, Kraken, and other form of brokerages.
Ans: It is not a centralized company that makes money off of people. The validators who take part in the network of Ethereum earn rewards in ETH for contributing.
Ans: As with any other form of investment, the answer to this depends on your goals financially. It also depends on other factors like risk tolerance, and objectives that you have. The cryptocurrency (ETH) can be extremely volatile hence this would put the investors’ capital at risk. You need to make sure that you do your proper research before investing in them. Make sure that you are not investing all of your money in it as well!
Ans: Yes, ETH can be converted into cash. The investors who hold the ETH cryptocurrency can use the online available exchanges for selling ETH for cash. Some of the most popular crypto exchange platforms are – Gamini, Kraken, and Coinbase.
To Wrap It Up!
Make sure that you are conducting proper research before investing in cryptocurrencies. I would like to mention again that you should not spend all of your money on it.
That was all for information regarding what Ethereum is. Thank you for reading up till here. I hope you found the information useful.
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