What is Ethereum?

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What is Ethereum

Ethereum is the second most popular cryptocurrency in the world and one of the best markets among the altcoins. This is a somewhat populist definition, but really what is Ethereum?

Ethereum is a decentralized platform through which a developer can create intelligent contracts with another pair. Anyone who knows about blockchain technology can create applications that process this type of contracts without any problem. What does this have to do with the rest of cryptocurrencies? Ethereum as a blockchain platform offer tokens, known as Ether, which is what is normally purchased in the altcoins market, however its blockchain allows the creation of other tokens under the ERC-20 standard that, together with its smart contracts service, offers a framework that many other projects can use to create their cryptocurrencies or tokens. Despite its short life, it has managed to position itself as one of the most successful blockchain projects.

How Ethereum works as a systemTalking about Ethereum as a system works in a decentralized way thanks to a machine called EVM (Ethereum Virtual Machine) which works with a bytecode that is a mixture of LISP and bitcoin script. For smart contracts, programs are written in high-level programming languages ​​such as Serpent or Solidity.

A smart contract is nothing more than that agreement that has the ability to be fulfilled automatically, it is only necessary that the parties agree to the terms. Blockchain technology is responsible for securing them so that they cannot be manipulated in the future.

At the time, Ethereum was shown as an improved alternative to the Bitcoin platform, especially because of its ability to set withdrawal limits, create financial smart contracts or guard the blockchain.

Ethereum Blockchain

What is Ether?

Ether is the cryptocurrency of the Ethereum system. This is what allows the platform to work because it is the means by which users of the platform can trade. In short, it is the incentive for developers to work on the platform and the network to remain healthy.

According to agreements agreed in 2014, the annual production of ether is limited to no more than 18 million units per year, although that rate will not be maintained forever, since at some point in the near future a new algorithm called Casper will be implemented so that, in addition to being more efficient and less dependent on mining, will reduce the emission significantly so that the ceiling that initially has been proposed to be less than 100 million is never reached.

The ether is divided into smaller units finney, szabo, shannon, babbage, lovelace and wei in which each is equivalent to a thousand of the next smallest unit; 1000 finney are 1 ether, 1000 szabo are 1 finney, 1000 sannon are 1 szabo and so on.

Ether creation and growth

Ethereum was launched by Vitalik Buterin in 2015. You could say it’s like a child born in a golden cradle. While its value has never been as high as that of bitcoin, expectations about its possible growth have always been skyrocketing.

Shortly after its launch, Ethereum suffered an attack on its security by the Decentralized Autonomous Organization, which generated millions of dollars in losses, forced the developers to make a roll-back that subsequently generated a bifurcation in the chain of blocks that he created two coins; Ethereum and Ethereum Classic.

Despite the attack, Ethereum’s growth has not been affected so much. Its launch price was $ 0.35. In just over two years, it managed to increase its value by more than 1000 times to position itself at over $ 400 in 2017.

The best year for the ETH has undoubtedly been 2017, where we can find its historical peak. It has been so much its growth that at some point during this period it was possible to speculate on the possibility of replacing the BTC as the most important cryptocurrency, not because of its value, but because of the profitability of its mining.

How to get Ethereum

There are two essential ways to acquire Ethereum; buying and mining. The ETH market is well known and is a cryptocurrency that we can find in many exchanges. Mining is a different task, for it is necessary to have a RIG which you must assemble with different components. Mining using a conventional computer is also an option but the profitability is much lower.

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