With a significant increase in cryptocurrency wold, you’ve probably heard about Ethereum. Let’s explore Ethereum, its history, usage, advantages and disadvantages, to gain full understanding without further ado.
What is Ethereum?
Ethereum is an open-source, decentralized computing platform built on blockchain technology.It is not only a software platform, but also a programming language that offers smart contract functionality. Basically , Ethereum is a decentralized system distributed software platform that allows developers to create and install decentralized applications (DApps) that can be accessed from anywhere in the world. However, Ether (ETH) is known as Ethereum’s local cryptocurrency. That digital currency or coin allows trading blockchain. Currently, many of developers are building applications using Ethereum platforms such as cryptocurrency wallets, financial applications, decentralized markets, games, and a lot more.
Who Created Ethereum?
Etherum introduced back in 2013 by Vitalik Buterin.He created Ethereum because of his concerns about the lack of script information in Bitcoin, to develop apps. He announced Ethereum platform in January 2014.
Are Etherum and Bitcoin Similar?
Still, Ethereum is linked to the cryptocurrency just like Bitcoin; but; This is not the case, as it is used to control the digital value. Bitcoin is defined as the digital currency used to transfer money from one party to another. That is why it is used as a store of value. Similar to Bitcoin, Ethereum is a decentralized public blockchain network; but there are certain technical differences between in them.Unlike Bitcoin, Ethereum allows smart contracts and is known as a highly programmable digital currency. Ethereum is a software platform that serves as a decentralized app store and decentralized internet.This system needs a currency to run applications and programs. And this is where ‘Ether’ (ETH) comes into play.ETH is digital money that can be sent instantly sent from one person to another anywhere in the world.
Like Bitcoin, Ether is decentralized and cant be controlled by government or central banks.ETH is used to make payments similar to Bitcoin. In addition, Ether is used to pay for services as well as transaction fees from app developers in the Ethereum network.
How can Ethereum be used?
As mentioned earlier, Ethereum allows the development and implementation of decentralized applications.This application allows developers to use this platform as a peer-to-peer electronic payment system, as well as to use Ethereum for various purposes.
You can decentralize any centralized services by using Etherum. You can now consider a large number of intermediary services across different industries. You can also set up Decentralized Autonomous Organizations (DAO) without a single leader.These are managed by the programming code that replaces the structure and rules of traditional organizationsThese codes eliminate the need for intermediaries. Therefore, a person who buys a token (ETH) has a DAO.
Also, many other cryptocurrencies are being launched using the Ethereum platform.This is due to the ERC20 token standard, where developers can release other versions while collecting money with ICO (Initial Money Offering).
Ethereum’s Benefits:
1. Decentralized: Ethereum platform is immune to third party interventions, and therefore, all DApps and DAOs cannot be controlled by anyone.
2. Secure:There is no central point of failure. Its applications are extremely safe against all fraudulent activities and hacks.
3. Corruption Free:Applications in the Ethereum network are developed around the principle of consensus, which eliminates the possibility of corruption.
4. Immutability: Ethereum platform is immutable as no third party can mutate its data.
5. Zero Downtime:Applications in Ethereum always stay online and can’t be closed.
Ethereum’s Downsides:
Despite its benefits, Ethereum is not immune to deficiencies.
1. Smart Contracts: These were written by people to create a fault tolerant network. Therefore, the benefits of smart contracts largely depend on people who write code for them.
2. Code Bugs: People can make mistakes and any single mistake in the code can lead to negative consequences. Using the code cannot prevent the hacker from attacking the network. A network consensus and the new code must be rewritten.
3. Dao: It was attacked in 2016. More than 3.6 million Ether tokens were stolen in this attack. This attack lowered the trust of users on the Ethereum network, causing Ether’s value to drop from $ 20 to $ 13.
