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What is Ethereum? Here’s everything you need to know about it.

The cryptocurrency is not stopping, and it shouldn’t. For better reasons, cryptocurrency has taken a huge part of financial systems. After Bitcoin, there’s another cryptocurrency that is in the limelight in recent times – Ethereum. The platform is actually to build powerful applications based on blockchain technology, one of which is the ETH cryptocurrency.

Necessity is the mother of all inventions.

Same thing happened with Ethereum too. While bitcoin was booming in the cryptocurrency industry, a Bitcoin developer, Vitalik Buterin described and developed the concept in 2013. Since it’s inception the currency has seen a sharp spike in the market, for obvious reasons.

In this post, you will know

  • About Ethereum and Ether
  • What makes it unique and more powerful than bitcoin
  • Ethereum as currency

About Ethereum Blockchain

Ethereum is a platform to develop decentralized applications, of which Ether is the cryptocurrency that we will be knowing more about in this post. Ethereum is to build decentralized applications and distribute it. Ethereum has a very broad scope for application development, and whatever built on the platform is distributed so as to power the purpose of the application. Ethereum blockchain is an open-source network to build a decentralized application.

Ethereum is technically a computer that is connected to hundreds and thousands of other computers making a dense network of the platform. The developers do not have to learn new skills to contribute to the platform, already existing languages like HTML & JS can be used to build the interface. Python, Go are used to develop the business logic. A lot of startups, Fortune 500 companies, and technology vendors have come together in alliance with Ethereum SMEs to build, grow and serve the consumers in many ways.

Why Ethereum? Why should even care?

Most of the business models in any industry today have one thing in common, they’re centralized. While ethereum is a platform where applications work in a peer to peer fashion with no middlemen to charge you for their services. For example, the banks promise to keep your money safe and they charge you for the same. Technically speaking, when you make a transaction it is not the actual amount transfer does not happen. It happens virtually, just within the system. You actual money is elsewhere, and you get charged just for using their system.

Everything that centralized offers a single point of attack, ethereum platform being decentralized this possibility is ruled out. On the platform, you do not have to trust on the developers for your personal information, funds, or content. Irrespective of the application built, this feature stays intact.

What is Ether cryptocurrency?

The cryptocurrency that Ethereum blockchain has is ‘Ether’ and the code is ETH in cryptocurrency exchanges.  Just like bitcoins, ether is a bearer’s asset. The cryptocurrency network with no middlemen, that used to charge a hefty fee for doing a task you can very well do with the help of systems like Ethereum, for free. With such Ethereum blockchain, you as the end user can interact with the social systems or financial system in the peer to peer fashion. Ether as a currency is/can be traded just like stocks. The second best-traded cryptocurrency in the market, obviously after Bitcoin. That being said, you can invest in Ether and encash whenever you see a jump in its value. Trust me, it’s not getting down any soon.

Why Ethereum? What’s in it for you?

Services that we use today is mostly centralized, like the financial system, governments, social network, law and the list goes on. Remember that this model has a single failure point, for example, a website has a single failure point – The firewall. If a hacker gets access to it, he/she can bring the whole website down. The Ethereum network, in this case, lets the user be in the driver’s seat. The user data is the user data, no one else can intervene in it and make it theirs. Even if the inventor of this network attempts to. With this network model, you don’t have to trust any middlemen for your money, data and personal information, including the developers. Your information stays yours, forever – No Exception. Depending upon the application on this platform, your data of that application stays under only your supervision.

Deeper analysis of Ethereum

As an Ethereum user, you can create your own currency, which is generally known as ‘tokens’. Say there’s a band of artists who need your support, so they roll out their own ‘token’. With help of Ethereum blockchain, you can buy those instead of donating to them. More ‘tokens’ people buy higher will be its value and eventually, the band directly get the benefits. Now that’s what I call as the power of technology.

If you and me like, share or comment on any post on facebook (for example) the benefit goes to Facebook advertisers or Facebook itself. Not you, not me reap any benefits. Facebook has over 2 billion active accounts and is worth over $500 billion because of this. Ethereum is the total opposite, you get the benefit of transactions you do with people you do with. Best benefit being, privacy and security.

How does Ethereum work?

Bitcoin is the first ever cryptocurrency. It is the best-known cryptocurrency till date, in terms of market value. With Etereum, just like bitcoin, you don’t need to trust any middlemen for your fund transfers, information, and identity. You have control over these all the time.

The decentralized nature of Ethereum network that connects to hundreds of thousands of computers making it humanly impossible to hack it. Even if someone tries, the network will defend it.

Ethereum developers write business logic called ‘contracts’ (which even Bitcoin blockchain have implemented lately) A contract is a program that triggers a series of steps upon receiving a message called ‘transaction’. A transaction is anything that happens within the Ethereum network. Transactional information like bank account details, residential addresses, or any such confidential things. It can be a funds transfer information, and no one can get in between to steal the funds or your information.

The business logic or contracts can send and receive transactions, store data, and interact with other contracts too. The maintenance of contracts is within the network, so it is safe to create contracts. It is end-to-end encrypted, so well that no one can steal even a single piece of information. The logic behind this is a product of two facts,

  • Transactions are super fast and
  • Dealing with a block of information is a really really lengthy process- it’s called mining. So anyone has to steal any information, he/she has to do the mining. And by the time they get a block to steal information from, the blockchain updates and the stealing fails.

Mining doesn’t get you the details, it only lets you interact with transaction ID (primary key and secret key)

Ether as a currency

After bitcoin, if there’s any cryptocurrency that is getting the limelight in the cryptocurrency market is ETH. One ETH is $406.49 while writing this post. And it’s just 2 years old, so you know where will it go in near future. You can trade ETH just like stocks.

How to spend Ether?

A lot of ways you can spend ethereum for your needs are available today. The best way is to link your debit card with a crypto exchange and using the debit card for your shopping. Many stores and online shopping portals are accepting Ether as currency, so no more worries. If nothing works best for you, you can exchange it for paper currency. Paper currency works anywhere right? Problem solved!!

 

Conclusion

The blockchain technology is booming in length and breadth. The number of cryptocurrencies is growing in number. As far as Ether is concerned, it is growing day and night. For now, these cryptocurrencies are grey zones, not everyone uses and not none uses. So what to do with this cryptocurrency? Invest a small amount of money and for a small amount of time, get profits and further invest the profits. So that your hard earned money stays with you. Invest your money just once, then you can iterate the profit as an investment.

Over to you, what was your experience after reading this piece of information? Did you ever invest in Ether? What was your experience with the investment? Do let me know in the comment section below, it can be a simple ‘Hi” too.

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Shubham Davey

Internet marketer, SEO Consultant, photographer, and blogger. The Internet is my second home, first is India. Networm and tyro.

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