Cryptocurrency has gotten a lot of attention from all around the world especially with the rise of Bitcoin. Ethereum is a new rising star who has entered into this game recently. It has already explored the potential of blockchain technology immensely.
But what is Ethereum and what does it mean for the future? Here is the complete guide for a crypto enthusiast.
What is Ethereum
Ethereum is defined as an open-source, decentralized and distributed blockchain-based computing platform. It is also an operating system which features a smart contract. 2013 is the year when Vitalik Buterin proposed Ethereum. Ethereum was developed by raising funds online. This crowdfunding was carried out between July and August 2014. On 30 July 2015, the system has gone live. Ether is defined as a fundamental token of Ethereum. Ether is also a cryptocurrency. But there is a difference between a cryptocurrency and a token. The Ethereum platform generated the cryptocurrency Ether. Winners are rewarded with Ether for solving mathematical equations. Ether is known as a crypto-fuel helping smart contracts to run. The crypto-fuel Ether also powers the Ethereum blockchain or Ethereum network.
Vitaly Dmitriyevich “Vitalik” Buterin is known as a Russian-Canadian programmer and writer. He was born on January 31, 1994, in Kolomna, Moscow Oblast, Russia. He is also the co-founder of Ethereum and Bitcoin Magazine. He lived in Russia for 6 years because his parents named Dmitry Buterin and Natalia Ameline sheltered in Canada for better employment opportunities. He was introduced to programming along with math and economics during his third grade in a Canadian elementary school. His father taught him about Bitcoin when he was just 17 years of age. He likes the decentralized nature of Bitcoin. He spent his time on various Bitcoin-related forums. He wanted to join the Bitcoin economy, but he was not only having the computing power to mine Bitcoin, but also the cash to purchase Bitcoin. He was writing articles for a blog and earning five Bitcoins per article. He learned more about Bitcoin through his forum work and articles. His articles impressed a Romania-based Bitcoin enthusiast named Mihai Alisie. 2013 is the year when Ethereum was described in a whitepaper by Buterin. About 30 people came to Buterin for this concept. The core team of the project consists of Vitalik Buterin, Mihai Alisie, Anthony Di Iorio, Charles Hoskinson, Joe Lubi, and Gavin Wood. 2014 is the year when the announcement of the project was publicly done. Holding the crowdfunding of Ether was decided later on.
A smart contract is a computer protocol created to verify the negotiation of money, content, shares, property, and anything of value. It is implemented into a distributed network. Smart contract-based transactions will be carried out by devices without involving middlemen.
An American computer scientist named Nick Szabo proposed a smart contract in the year 1994. Nick Szabo invented a digital currency called “Bit Gold” in the year 1998. The execution of a contract for derivatives and bonds was also proposed by him. Derivatives and bonds are known as synthetic assets.
- Data Security: Cryptography is used in a smart contract to secure data.
- Saves Costs and Time: It eliminates intermediaries. No waste of extra money and time.
- Faster Speed: It doesn’t waste time on intermediaries. Therefore, the blockchain has faster speed.
- Traceability: Each data is timestamped. It is easy to trace the complete journey of a particular product from production and distribution to the last step of a supply chain.
- Transparency: Every activity in the blockchain is transparent.
- Accuracy: A smart contract is created by keeping specific conditions in mind. All transactions are executed on the basis of specific conditions.
- Storage: Transactions are stored permanently.
- Backup: Each data is backed up in the blockchain. All devices have copies of each data.
- Guaranteed Outcomes: All transactions are carried out on the basis of conditions. If conditions are failed to match, then a particular transaction will not take place.
- Decentralization: The blockchain is a decentralized technology as it is not controlled by intermediaries. A smart contract in a blockchain technology works independently as it removes roles of intermediaries.
Decentralized applications (DApps) are those applications which can’t be controlled by any entity. Ethlance, CryptoKitties, Aragon, uPort, Gnosis, Prism, Radex, and Golem are the 9 DApps which use the Ethereum platform.
- Ethlance: It is known as a decentralized marketplace created for job postings.
- CryptoKitties: It is defined as a new game or app helping users in buying, selling or breeding digital cats.
- Aragon: It is used for building and managing decentralized autonomous organizations (DAOs).
- uPort: It is known as an identity management platform.
- Gnosis: It is known as a prediction market through which the market prediction of a football match or an exclusive international auction can be known.
- Prism: It is known as a decentralized asset portfolio market. ETH can be invested in many cryptocurrencies and the percentage of holdings can be specified with the help of Prism.
- Radex: It is known as a zero-fee decentralized exchange created for Ethereum tokens (ERC20).
- Idex: It is known as a decentralized exchange used to buy, sell and store Ether and ERC20 tokens.
- Golem: It is known as a decentralized supercomputer or a marketplace used for buying and selling the computing power.
Ethereum Virtual Machine (EVM)
Users can use Ethereum wallets to store and secure ETH.
Hardware: Ledger Nano X Wallet, Ledger Nano X Wallet, and TREZOR One Wallet
Mobile: Coinomi Wallet and Airbitz
Desktop: Atomic Wallet and Exodus
Web: MyEtherWallet and Jaxx Liberty Wallet
An Ethereum exchange is an online ETH business. Coinmama, Luno, BitBay, Gemini, and bitFlyer are the cryptocurrency exchanges where customers can buy and sell ETH. The customers can trade ETH for other cryptocurrencies or fiat currencies like USD, EUR, and Yen.
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