Discover Ethereum (ETH), the revolutionary blockchain platform powering decentralized applications (DApps) and smart contracts. Unmask the future of programmable money and decentralized finance (DeFi).
Understanding Ethereum
Ethereum is a decentralized blockchain network that runs peer-to-peer operations safely and checks the application code, called smart contracts. The transaction records can be verified but cannot be altered and are safely spread across the network. This means everyone on the network can access and own the transaction data sent and received by user-created Ethereum accounts.
Ethereum is designed to be customizable, scalable, safe, and not controlled by a single group. It is a popular choice amongst developers who want to change how businesses work with the help of technology. Ethereum technology is known for storing assets, building apps and organizations, transacting, and communicating without the help of a single authority. Ether (ETH) is the token of the Ethereum network. It can be used to pay for things on the network.
Vitalik Buterin developed Ethereum in 2013. It is a decentralized system that can store digital money, apps, and payments made worldwide. It is a community-run technology that has created a strong, growing digital economy and given people new ways to make money online worldwide.
Why should you use Ethereum?
Here are a few reasons to use Ethereum:
1. Faster and Cheaper Cross border Payments: Stablecoin is an alternative to the global payment system that is faster and costs less. Many stablecoins are built on the Ethereum network, making it easier to move money between countries. A bank or other financial institution usually takes a couple of working days to send money worldwide. But with stablecoins built on Ethereum, money can be moved quickly and for a fraction of the cost. Also, unlike a regular bank, there is no limit to the amount that can be transferred and no extra fees.
2. Hello Ether, Ethereum’s cryptocurrency: Ethereum has its Ether (ETH) currency. ETH is a digital currency that can be used anywhere and quickly. The supply of ETH is entirely decentralized and open, meaning that no one or no company is in charge of it. Miners who keep the network running “mine” (make) new coins. If you want to use the Ethereum network, you must pay a certain fee. Most of the time, the fee is a small amount of ETH, which gives the user a certain amount of computing power to use the network.
What does Ethereum do?
Ethereum is a lot more than just digital money. Here is all that Ethereum does:
- Bank for everyone: One may or may not have access to banking and financial services. But with Ethereum, you only need an internet connection to access its borrowing, lending, and savings products.
- More private: Ethereum is a value-based economy that does not require you to enter personal information to use any Ethereum app.
- Censorship-resistant: Like any other blockchain network, Ethereum, too, is entirely decentralized. This means that no central authority or government controls Ethereum, making it impossible for anyone to stop transactions on the network. All products are compostable: All the applications are built on the identical blockchain, which means they share the global slate and can build off each other (like building blocks or legos). This enables better experiences and product creation at all times.
- P2P network: No middlemen are required. Ethereum allows you to make agreements or move money directly with someone else without any intermediary intervention.
Point of Distinguish between Ethereum and Bitcoin
Ethereum is built on Bitcoin’s innovation and was launched in 2015. However, here are some differences between these two crypto giants:
Ethereum is Programmable: Bitcoin and Ethereum allow you to use digital money without banks or other central units. However, Ethereum is programmable, meaning you can always build decentralized apps that use the blockchain to control and store data on its network. Ethereum stands limitless in what it can do, making room for innovation at every step.
Ethereum is a marketplace: While Bitcoin is purely a payment network, Ethereum is a marketplace that offers financial services, social networks, games, and other apps.
The Merge
People often say that The Merge, which took place on September 15, 2022, was a smart move. Why was this such a sensational move in Ethereum’s history?
It was the coming together of Ethereum’s existing execution layer, Mainnet, and its new proof-of-stake layer, Beacon Chain. It eliminated energy-intensive mining and used proof-of-stake ETH to protect the network. This made Ethereum more scalable, sustainable, and safe.
All Ethereum accounts were balanced by smart contracts and kept safe by a proof-of-work agreement. Beacon Chain, on the other hand, used a proof-of-stake system. Once the two systems came together, the proof-of-work agreement was removed from the Ethereum network. The Merge was one of the most important and long-awaited improvements in Ethereum’s history. It has led Ethereum towards a future that is more sustainable and good for the environment.
The Merge aimed at reducing Ethereum’s energy consumption by roughly 99.95%, which is enormous. It also sets a platform for scaling upgrades like sharding in the future.
Use cases of Ethereum.
Non-Fungible Tokens (NFTs)
NFTs are unique-indivisible digital tokens helpful in proving the origin of rare assets. NFTs are artworks tokenized by the artists to ensure their work stays unique and belongs to them. The ownership information is recorded on the blockchain network. NFTs are highly popular in the gaming industry as they allow coaction between gaming platforms.
Ethereum’s first NFT project was CryptoKitties, which allowed customers to collect cat collectibles digitally, backed using NFTs.
Decentralized Finance (DeFi)
DeFi is a network of financial applications developed on blockchain networks. DeFi differs from current financial networks as they are open and programmable. They operate sans any central authority, allowing developers to develop investment, payment, and trading models. Customers can quickly build secure decentralized applications using smart contracts. Some popular DeFi platforms are UniSwap, Compound, Aave, and MakerDAO.
Key Takeaway!
Ethereum is moving towards a sustainable future and is here to stay. If you are new to crypto, check out What is Cryptocurrency and How it Works.
