Ethereum ETH the Most Promising Blockchain After Bitcoin Cryptocurrency
Ethereum is the star of cryptocurrencies that comes just after bitcoin and is the most promising blockchain outside of the latter. Its powerful market capitalization is attracting more and more investors to this network. Also known as ETH, this technology is becoming increasingly successful in the financial market. Despite this, some still do not understand how this innovative blockchain system works. Here is a guide that will let you know all about Ethereum.
What is Ethereum ETH Blockchain Cryptocurrency?
If we define it in a simple way, Ethereum is an open software platform that is based on blockchain technology. This allows developers to create and deploy centralized applications. It thus facilitates the creation of decentralized applications for various sectors: cloud computing, real estate, finance, insurance, etc.
Ethereum is considered by its manufacturers as the first true world computer allowing the design of decentralized applications. This software platform also has its own cryptocurrency called Ether (ETH) whose role is twofold: to pay the people (minors) who serve as a node in the network and to pay the people working directly on the platform. It is today one of the main alternative cryptocurrencies to Bitcoin.
Ethereum: origins and creation
Before the emergence of Ethereum, the operations performed by blockchain applications were very limited. Some cryptocurrencies like bitcoin were only designed to serve as peer-to-peer digital currencies. It was then difficult for developers to design all the functions of a bitcoin and other applications because it took a lot of time. Likewise, they were struggling to design a new blockchain application and a new platform.
Realizing these difficulties faced by developers, Vitalik Buterin decided to implement a new approach. This is how he published a white paper on the subject in 2013 and then devoted himself entirely to the project in 2014. The Ethereum blockchain platform was created with crowdfunding of 30,000 bitcoins and its launch took place at the end of July 2015.
The great innovation of Ethereum is based on a virtual machine that allows the execution of all types of programs, regardless of the language used with sufficient memory and time. This machine simplifies the process of building blockchain applications and makes it more efficient.
How does the Ethereum ETH Blockchain work?
Ethereum Cryptocurrency uses blockchain technology just like bitcoin. Its operation can be likened to a network of computers regulated by blockchain technology that facilitates the management of payments. As a result, the ETH protocol allows the creation of smart contracts that are neither controlled nor censored by third parties. The goal of this software is to automate blockchain transactions and thus eliminate manual execution of trades.
Much like other cryptocurrencies, Ether can be used for mining, trading, or wallet storage just as it can be traded. It is possible to buy it to resell it on the financial market in order to gain profit.
A blockchain-based on “Proof-of-Work”
The blockchain means a public registry that regularly updates and prevents false transactions without the involvement of a bank. It is considered a storage technology and can be thought of as a public ledger that no one can tamper with. It is responsible for backing up transactions made in Ethereum. The exchanges are validated by the minors via the “Proof-of-Work” for the resolution of all the problems related to the algorithms.
Thanks to the peer-to-peer network, users of the Ethereum blockchain must be able to verify transactions to their wallet. At the same time, several computers are responsible for saving the current state of the blockchain.
The network nodes collaborate, provide security for the blockchain, and are responsible for the production of a consensus algorithm. The blockchain thus designates a database making it possible to guarantee the traceability of the Ethereum platform.
Smart contracts at the heart of Ethereum
These are stand-alone programs that, when they are started, are responsible for the automatic execution of previously defined conditions. The smart contract is thus an IT mechanism that uses smart contract technology to eliminate escrow services and intermediaries in the Ethereum blockchain.
Thus, Smart Contract technology allows credible transactions to be carried out without the intervention of a third party. Its integration into the blockchain makes it possible to make the terms of the contract non-modifiable.
How to buy Ethereum and other Cryptocurrencies?
It is possible to buy Ethereum ETH or exchange it for classic currencies (euro) or other cryptocurrencies. You can buy Ethereum on trading platforms or on direct cryptocurrency exchanges.
Ethereum works in a simple way on exchange platforms: all you have to do is enter some of your personal data so that the platform can verify your identity. Subsequently, the subscriber chooses the deposit method that suits him best: credit card, bank transfer, PayPal, SEPA transfer, Skrill … while defining his currency. Once the deposit is validated, it will be able to purchase the Ethereum.
It is advisable to choose your Ethereum purchasing platform carefully by considering certain criteria of reliability and security. In order not to be mistaken, the best is to consult the opinions on the Internet. Don’t make the mistake of choosing a platform for an enticing welcome offer that often hides hidden costs down the line. You can for example visit www.litebit.eu/en, one of the best crypto brokers 2020.
What can be done with Ether cryptocurrency (ETH)?
While bitcoin aimed to decentralize currency, Ethereum aims to broaden the scope. To this end, the white paper published in 2013 by the founder of Ethereum discusses the various possible applications: banking transactions, data flows, market forecasting, insurance contracts, identity, and e-reputation system.
The decentralized applications developed there is autonomous, secure, and open source. The blockchain is shared by all the applications of the Ethereum network which are easy to implement.
What is the difference between bitcoin and Ethereum Cryptocurrency?
At the level of the Ethereum blockchain, it is not a question of mining to have ethers. The idea here for users is to work to earn Ethers. While blockchain is used by bitcoin to track bitcoin owners, Ethereum uses this technology for running almost all decentralized applications.
According to Vitalik Buterin, creator of Ethereum, the bitcoin blockchain is developed only for monetary applications while Ethereum allows the development of any type of application. Ethereum is therefore not a frontal competitor of bitcoin, because blockchain technologies are used in different ways and therefore their uses can be complementary.
As you will have understood, the ideologies are different: bitcoin is centered on the monetary domain while the Ethereum ideology advocates the creation of a new much more decentralized web.