Ethereum is the creation of young prodigy Vitalik Buterin, who is a Russian-Canadian programmer that created the platform and the cryptocurrency in 2015. While Ethereum was Buterin’s idea, the platform has other co-founders too, who helped finance the project and develop it. According to its founders, Ethereum can be used to “codify, decentralize, secure, and trade just about anything.”
The Ethereum platform is an open-source, public, blockchain-based platform that allows developers to create decentralized applications. Most applications rely on servers of large corporations such as Apple and Google – these third-parties can decide whether or not to have certain applications in their app stores. Ethereum’s mission is the opposite – anybody can use this decentralized network, and no permission from third parties is required. Ethereum is not controlled by its founders – it’s run by the community of its users. The platform’s vision is to create a “World Computer,” which will be a vast network of private computers that run applications without third parties. These decentralized applications are also known as DApps.
Decentralization is valuable – it means that personal data is no longer stored in servers of large corporations and cannot be abused (sold, distributed, etc.). It also means that no one can be excluded from using Ethereum applications, no matter your country or background. The future of Ethereum would be a concept a bit difficult for us to understand, but nevertheless quite revolutionary – it could create P2P Marketplaces where shoppers could buy directly from sellers – this would reduce commissions and processing fees excessively.
The fundamental token for the operation of Ethereum is Ether (ETH), which is often compared to the famous Bitcoin. However, the two cryptocurrencies have substantial differences in both capacity and purpose. Bitcoin offers a peer-to-peer electronic network that enables online payments and uses blockchain to track ownership bitcoins. ETH, on the other hand, runs the programming code of any decentralized application. Ethereum miners ‘earn’ Ether. The coin is traded on cryptocurrency exchanges but is also used for payments on the Ethereum network for transaction fees and services. It is identified as the “vehicle for moving around on the Ethereum platform”. At the time of writing, 1 Ether equals $221.59.
BTC or ETH?
Ether and Bitcoin have other differences, too, such as:
- Bitcoin uses a UTXO system, while Ethereum uses an accounting system where values in Wei are debited from accounts and credited to another.
- Block time is only 15 seconds, while for Bitcoin, it’s 10 minutes.
- News coins of Ethereum are mined at a consistent rate, while for Bitcoin, the rates halve every four years.
In 2016, $50 million worth of Ether was stolen, which prompted the founders to split the cryptocurrency into two separate blockchains: Ethereum and Ethereum Classic. The Ethereum was upgraded from the original currency in order to protect the currency from further malware attacks.
What affects Ethereum?
Unlike other traditional cryptocurrencies, Ether’s price is not as volatile or subject to geopolitical facts. Instead, it is influenced by other things, such as:
Negative media coverage – when a rumor broke out that Vitalik Buterin passed away, the price of Ethereum fluctuated enormously. The same happened during security lapses and hacks.
Availability – since there is not a limited supply of Ether, unlike Bitcoin, the changes of supply in its units may cause the price to alter.
Market manipulation – whales and bulls, similarly to other cryptocurrencies, can affect the price of Ether.
Government regulation – since governments are still adapting to cryptocurrencies, certain regulations care to either spike up or lower the prices.
Ether is currently the second-largest digital currency on the market. Most traders are currently choosing to purchase the currency and hold it for a certain period of time to speculate its growth. Ethereum’s platform is truly a universal shift towards how we use the internet. Ethereum is still early in its development, but its innovation is the reflection of how different technology could be in the future – thus shaping and changing society along with it.