What is Ethereum?
London, England, 4th Nov 2021, Just like Bitcoin, Ethereum is a cryptocurrency that is or is trying to be the new world currency. Ethereum uses all of the same protocols as Bitcoin – UDP, TCP, JSON RPC over HTTP(s) and so on – but adds its own more complicated vocabulary of acronyms like DAPP (Decentralized Autonomous Corporation), POW (Proof Of Work), and SMPC (Simple Multi-party Computation). In reality, Ethereum is actually a platform that other cryptocurrencies can build upon.
In the past few months, there have been many new cryptocurrencies released all promising to be better than Bitcoin or Ethereum by solving some of their problems. One such currency, “Ether”, has gained a lot of popularity recently. Ether implements a Turing complete software virtual machine called the Ethereum Virtual Machine, which is capable of running smart contracts and DAPPS (Decentralized Apps). The currency has been gaining a lot of money in investment from a lot of reputable people in the technology industry. This is because people believe in its potential to be bigger than Bitcoin.
FinancialCentre Broker Jamie Mor says that many companies have also started using it for their own projects due to its advantageous properties over Bitcoin. While they may not seem apparent at first, these problems will become more evident when you start comparing Ether with other cryptocurrencies such as Ripple or NXT. However, if you’re still interested in what Ethereum does differently then continue reading.
Ether is the currency of Ethereum which can be bought on exchanges online. Ether is used to pay for the computational power required to run programs on the Ethereum Virtual Machine (EVM). Just like Bitcoin, you can transfer money or data through the internet with it. However, unlike Bitcoin, Ether enables the creation of new kinds of financial applications using smart contracts. A smart contract is a bit of code that lives on the blockchain and executes commands exactly how they are told to by its creator without any possibility of censorship, downtime, fraud or third-party interference. The EVM makes these apps possible by providing a decentralized Turing complete virtual machine that can execute scripts using an international network of public nodes.
Ethereum prices are going up very quickly because of all the money that has been invested into it. It went from $8 to over $300 in just two months. People are investing heavily in Ethereum because it is a very promising technology with many applications. I believe that Ethereum will become bigger than Bitcoin, but maybe not for a few years.
What is fueling Ethereum’s flight?
Ethereum is an important invention, not just another altcoin or Bitcoin competitor trying to ride the wave of recent successes like Ripple and NXT recently have tried to do. Ethereum gives developers access to a whole new class of distributed applications called smart contracts which can be paid for using Ether, the currency unit behind Ethereum. This functionality has never existed before now and that’s why there is so much activity surrounding its development.
This week, Ethereum has been surfacing well above the 4k mark and this recent surge in the price of this digital coin is being attributed to the Altair upgrade. This upgrade introduces the ability to create smart contracts with other cryptocurrencies, something that was impossible until now. It also allows for people to create their own crypto coin with its own unique properties and in a manner that is much more user friendly, well tested and secure.
However, Mr Mor says he is not totally sure if this rise will sustain for a longer time or not. He says, “There are some concerns about the rise not being sustainable for a longer time. But Ethereum is a new technology and it has huge potential.”
When asked what can make Ethereum better than Bitcoin or other existing cryptocurrencies, Mr Mor said, “Ethereum’s programming language is Turing complete which means that you can write any code on it without facing any restrictions. Also, smart contracts provide limitless possibilities to businesses.”
And why should a business take interest in Ethereum, Mr Mor said, “Ethereum is not just for businesses? It has infinite possibilities. You can use it to create virtually anything from a computer program to an insurance policy that pays out automatically when needed.”
In this way, he explains, you can do lots of things without the help of intermediaries like lawyers and brokers which reduces costs and increases trust and transparency at the same time because everything is right there on the blockchain. Also, security becomes much stronger because any breach will be visible to everyone instantly. This can prove beneficial for both startups and existing companies who may want to improve their bottom lines while cutting overhead costs through increased efficiency and reduced fraud.
He said that another reason behind Ethereum’s recent rise is the increased awareness about it with the general public. People are becoming more comfortable using digital currencies in their day to day lives without having to worry about security or storage issues. “It’s something that many people have been working very hard on for a long time,” Mr Mor said, “Since its genesis in 2015, Ethereum has grown by leaps and bounds picking up major interest from banks, corporations and individual users.”
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