Even though Ethereum might seem like just another cryptocurrency, it’s actually a global supercomputer that’s operated globally. As with Bitcoin’s network, Ethereum is run by millions of computers all over the world. Its primary innovation was its unique ability to run smart contracts on its blockchain. However, most people use Ethereum primarily as a cryptocurrency. In addition to being one of the most popular altcoins, it is also a darling of both developers and investors.
History of Ethereum
In late 2013, one of Ethereum’s founders, Vitalik Buterin, proposed the cryptocurrency. It was later picked up and pursued by co-founders Joseph Lubin and Gavin Wood. Ethereum raised money in July and August 2014 through a crowdsale, and launched in July 2015.
During the cryptocurrency bubble of 2017, Ether’s price soared to $1432.88 USD. Ethereum, as a platform, made it easy for people to create their own tokens, or cryptocurrencies. This in turn fuelled the rally in the industry, which saw most projects raise millions of dollars for their project with no other information than a whitepaper. Initial Coin Offerings (ICOs) are cryptocurrency equivalents to an Initial Public Offering (IPO). With Ethereum as a base platform, ICOs became very easy to build, launch, and implement.
As a result of engineering a “template coin” or token that anyone with a basic understanding of Ethereum could launch their own token, new tokens were easy to create. In many cases, you will read that a token or coin is an ERC20 token, since this standard is known as ERC20.
In the early days, Ethereum was used as a platform to run newly developed cryptocurrencies, but scaling the network became a problem. Ethereum can process between 20 and 30 transactions per second. However, when compared to VISA or Mastercard, Ethereum can’t handle a global load of transactions.
The Ethereum Foundation, which is the governing body that guides the development of Ethereum have planned several milestones and upgrades to the Ethereum network. These upgrades will allow the Ethereum network to scale to become the global transaction supercomputer it originally promised to be. A number of upgrades have been made, including support for secure random numbers, sharding, and Byzantium, which are referred to as Byzantium, Constantinople, and Serenity. The Ethereum 2.0 network will be formed once these upgrades are completed and deployed.
Advantages & Disadvantages of Ethereum
Benefits
The biggest advantage of using Ethereum Exchange is its thriving developer and user ecosystem. When you come across situations and questions that you need answered, you need a community of users to aid and assist you when you come across them. Therefore, community involvement and activity should not be undervalued.
Another advantage of Ethereum is its thriving App ecosystem. This allows for a wide range of things that you can do with your Ethereum tokens. Anyone can create and publish their own tokens on Ethereum’s Blockchain. As a result, fundraising becomes easier and a proof of concept can be implemented.
The disadvantages
It is important to understand the various problems with Ethereum before getting involved. Ethereum has problems with scalability, meaning it is unable to handle a large number of transactions per second. In comparison to Ethereum, which is capable of processing only 25 transactions per second, VISA can process 65,000 transactions per second. This makes it capable of handling a global load of transactions.
Over a dozen Ethereum smart contract hacks have occurred since Ethereum’s inception. You must be aware of this, when trusting a smart contract with your money. Although this hinges on a lack of security, it is important to note that the developer community has been on top of repairing such hacks as they occur.
What is the advantage of Ethereum over Bitcoin?
It’s unfair to compare Ethereum with Bitcoin. Bitcoin is a digital gold for the world of cryptocurrencies, whereas Ethereum is an application platform that can be used in a variety of ways.
Is Ethereum based on Bitcoin?
Ethereum uses some of the same concepts as Bitcoin, such as the Proof of Work consensus mechanism. Ethereum is becoming increasingly different from Bitcoin as its software develops.
Does Ethereum have forks?
There are many forks of Ethereum, but only one is noteworthy. Ethereum classic is the original fork of Ethereum, created after the DAO hack of 2016. The primary difference between these two forks is Ethereum reversed the hack and moved forward as if it had never happened.
Ethereum Classic: What is it?
Following the DAO hack of 2016, Ethereum Classic chose not to reverse the hack. Ethereum on the other hand altered the blockchain and reversed the hack.
What is Ethereum and how does it work?
People can rent CPU time from Ethereum, which makes it a global supercomputer. Because Ethereum uses a consensus mechanism that allows transactions on the network to be trusted, this works. The Ethereum network uses a consensus mechanism called Proof of Work, which is the same as the Bitcoin network.
You need to pay a small transaction fee to interact with the ETH Exchange network and send a transaction to be processed. The fee is called GAS. Your transaction will be processed by computers that will be compensated proportionately to the amount of CPU time they will consume.
Smart contracts range from customized tokens to decentralized applications (Apps), and any interaction with these smart contracts requires the user to approve the transaction, making Ethereum a well-refined and secure network.
