What is Ethereum?13 Jan, 2020 David Kemp
One of the first concepts you will face in the crypto community is Ethereum. Bitcoin, of course, is not ready to part with its status at the leader, but Ethereum is not just another coin. It is a functional decentralized environment. Ethereum has several innovative solutions that allow it to be ahead of bitcoin in a list of areas. Let's get to know it better.
Key features of Ethereum
The purpose of Ethereum platform development is the creation and operation of decentralized applications based on blockchain technology with the use of smart contracts. The internal currency of the system is Ether (ETHER). Coins serve as a currency, at the same time they are used to guarantee the execution of smart-contracts.
With the launch of the cryptocurrency, the entire cryptocurrency world received a powerful impetus to development.
The launch of Ethereum gave a head start to many decentralized startups and projects based on smart contracts and blockchain. The reason why it has taken the whole crypto industry by storm is that you do not need to have an extensive background in mathematics, coding and cryptography anymore. Ethereum gives you the powerful, but user-friendly tools.
How Ethereum works
Smart-contract is a special digital algorithm that ensures the execution of agreements within the blockchain. It is built in such a way that when certain conditions occur, the system automatically performs a specified action. There is no wiggle room for fraud and machinations. Blockchain helps to eliminate that.
A great example of Ethereum making a life for investors and business owners easier is ICO. They are based on smart contracts, which guarantees the automatic transfer of tokens to investors immediately after receiving Ethereum to the wallets.
The algorithm that ensures the smooth running of operations, creation of new blocks and the confirmation of operations is Proof-of-Work. Miners compete to get rewarded for completing transactions which help the blockchain network to run without a hitch. One can trace a lot of similarities with Bitcoin.
Where is Ethereum used?
Ethereum, as a cryptocurrency, performs the following functions:
- Payment instrument
- Investment asset
- Form of assets storage
The main value of Ethereum lies in the broad capabilities of the platform. On its basis, you can run charities, poker rooms, betting applications and more. Since the platform is open, everyone has access to it and possibilities are limited by your needs.
The following projects have been implemented on the Ethereum blockchain:
- BackFeed - a platform for creating various ratings
- The Rudimental – a platform for creative personalities (journalists, writers)
- Platforms for investment funds and banks
- FreeMyVunk application for monetization of the rating in the games
It is important to separate cryptocurrencies and Ethereum platform as they are not two peas in a pod. Each element was revolutionary and contributed to the emergence of a powerful momentum in the crypto market. Today, Ethereum confidently occupies the top positions in capitalization, second only to bitcoin. At the same time, Ethereum has many advantages over the cryptocurrency king. Perhaps in the future, we will see the leader change. Go to the "Popular" section so that you have the opportunity to monetize trends in the world of cryptocurrencies.
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