What is Ethereum? Ethereum (ETH) – is a universal tool for launching decentralized applications (dApps) running on smart contracts. Cryptocurrency ETH is an exchange unit of the ecosystem. Ethereum is sometimes called Bitcoin 2.0, but despite a certain similarity, these projects have fundamentally different purposes.
In 2013, a young Canadian programmer, founder of Bitcoin Magazine Vitaly Buterin, together with his colleague Gavin Wood, presented the concept of the Ethereum blockchain platform. Cryptocurrency in this network played the role of not only a means of payment, but also allowed the exchange of resources to a variety of web services operating in a peer-to-peer network. During the ICO held the following year, the company managed to collect 31,000 BTC. The innovative Ethereum project was able to attract the attention of many reputable companies: banks, financial organizations, and so on. After the implementation of the Homestead protocol, the network began to function in full mode.
Vitalik of the EthereumThe main value of the Ethereum network is not cryptocurrency, but the capabilities of a virtual platform. The platform has a variety of applications in multiple fields, but among the main ones is the use as a cryptocurrency for fast and secure transactions, building smart contracts, and conducting ICOs. In addition, various blockchain projects are being launched on the basis of Ethereum, ranging from sports betting and online casinos to charitable foundations.
The Ethereum blockchain allows everyone to use all the advantages of distributed ledger technology when performing specific tasks. After the appearance of the Ethereum system, it is no longer necessary to create a personal crypto network. For a relatively small fee, you can use a ready-made solution.
Tens of thousands of computer applications written in different programming languages could now be launched and interacted with each other on the same platform, which significantly expanded the scope of blockchain technology. Thus, every qualified programmer can create his own application based on the Ethereum ecosystem, working according to a strictly established algorithm. The system guarantees protection from failures and intruders, the absence of censorship, and the non-interference of external regulators.
The functionality of the Ethereum network allows you to:
- To launch smart contracts
A smart contract is the name of a computer code created to organize the exchange of money, content, property, shares or some other value. When launched in the blockchain network, a smart contract turns into a computer program that is automatically executed under certain conditions.
Since the smart contract is executed on top of the blockchain, it works exactly as programmed – there is no censorship, downtime, fraud or third-party interference.
- Create applications of any type (games, utilities, etc.)
Although all blockchain implementations are able to run code, the capabilities of most of them are very limited. Ethereum does not provide the developer with a narrow set of available operations, but offers to create any programs, and, thus, thousands of completely new applications can be implemented in Ethereum.
- Many ICOs are held on the basis of the Ethereum platform
ERC20 is the standard for tokens of the Ethereum network. The abbreviation stands for Ethereum Request for Comments. This is the official protocol of the company for making proposals for improving the blockchain in the network. The number 20 is the offer ID. The ERC20 protocol was created in order to solve compatibility and support problems. With the help of ERC20, new tokens can be added to the exchange and perform the necessary manipulations: quickly add and remove tokens, move between wallets, etc. The protocol contains a set of rules according to which all coins created on the basis of this platform work.
Unlike Bitcoin, the issue of which is limited to 21 million, the emission of Ethereum is not limited. Ethereum did not strive to become the most expensive cryptocurrency in the world, and limiting the issue would lead to an increase in value. The developers chose a different tactic and did not lose at all, as evidenced by the fact that ETH is the second leading cryptocurrency after Bitcoin. As of June 30, 2021, the market capitalization of ETH is $254,949,840,138, and the price per one coin is $2,189. The all-time high of $4,362 was reached on May 12, 2021. While the all time low was recorded on October 21, 2015 and was $0.4209. Amazing growth isn’t it?
The main advantages of Ethereum are as follows:- Availability. To date, Ethereum is the second most popular cryptocurrency in the world and is traded on all major exchange platforms.
- Versatility. The platform allows you to work with different programming languages and protocols (regardless of the level of complexity).
- Smart contracts. Thanks to this technology, Ethereum is in the zone of interest of many large corporations and banks.
- Publicity. The developer of Ethereum, Vitaly Buterin, is a public and recognizable person, all improvements and innovations are announced in advance, which causes a huge level of trust in the platform.
- Flexibility. The development team keeps up with the times, refining and improving the platform, which easily accepts changes and upgrades.
- Open source code. Anyone can create a unique decentralized application based on Ethereum blockchain.
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