Ethereum is the world’s second-largest cryptocurrency by market capitalisation, just second to Bitcoin. However, Ethereum goes much beyond being just a cryptocurrency.
It is often referred to as the silver to Bitcoin’s gold.
If you want to know more about this powerful project, this guide is all you need.
What is Ethereum?
Before its creation, blockchain applications could do little and had a very limited set of operations. Vitalik Buterin imagined Ethereum to be a platform that could be a major advancement. Something that would allow people to make safe digital transfers, own and control their assets, and harness the power of cryptography.
Ethereum is a public open-source blockchain-based computing platform that is used to build not just decentralised applications, but pretty much everything. For instance, people can build custom tokens, non-fungible tokens, digital documents, and much more using smart contracts for cutting-edge web3 innovation.
Think of it as a global supercomputer that is made up of millions of individual computers connected with each other.
What is ETH and what is it used for?
These applications on the Ethereum blockchain are fuelled by its native cryptocurrency token, known as Ether or ETH. It is primarily used for two purposes including:
- To pay for applications to perform any function.
- As a reward for the miners contributing to the Ethereum network.
If you wish to invest in Ether, know the prices and conversion rates of ETH in INR.
Ethereum vs Bitcoin
Everyone wants to know the difference between the world’s top two cryptocurrencies. While both Bitcoin and Ethereum function on the principles of cryptography and distributed ledgers, they are extremely different from one another.
While Bitcoin was created as a faster alternative to national currencies by becoming a store of value and medium of exchange, Ethereum was intended to be a platform that supported innumerable programmable contracts and applications.
Ethereum is also often compared to Tron in terms of its goals and advantages such as transaction speed and reliability of networks. If you want to buy Tron, get to know its price and conversion rates.
Both Bitcoin and Ethereum use a consensus protocol called proof-of-work that allows the network nodes to agree on the recorded information on their blockchains. However, in 2022, Ethereum is set to migrate to a new system called proof of stake. This will allow Ethereum to become more sustainable and scalable. It will also make it more energy-efficient as proof of stake utilises less computational power making it a better environment-friendly option.
User Identity
A person can create any number of virtual identities on social media platforms. But at the end of the day, how much privacy your online data enjoys is always a question mark.
With Ethereum, you don’t have to worry about your online data and information getting compromised. It allows you to have a decentralised identity management system. The reason is that the Ethereum blockchain has no centralised server that has access to your data minimising the risk of getting hacked or lost.
Ethereum Virtual Machine
The Ethereum Virtual Machine is a virtual engine where all the transaction codes get executed. All smart contracts are written in a particular programming language that is converted into bytecodes. These codes are then read and executed by the Ethereum Virtual Machine.
With EVM at the centre of all Ethereum operations, it handles all its computation programs and internal states.
What can Ethereum be used for?
Owing to the reduced cost and ease of payments, Ethereum has thousands of use cases in a variety of industries. These include finance, insurance, real estate, and more.
Banks and financial institutions were the first to adopt Ethereum. They have created the Enterprise Ethereum Alliance. This is a non-profit that aims to bring together several private bank blockchains with the main Ethereum blockchain.
Ethereum is considered to be amongst the most transformational cryptocurrencies with many more exciting applications in the pipeline. Visit Coinswitch to know more about Ethereum and the latest news and trends.
