Loading…

Welcome the financial chat around Bitcoin

Daily news about Bitcoin, Cryptocurrencies, Technology and and Finance
New to Bitcoin? Find out more!
What is Ethereum? All You Need To Know

What is Ethereum? Everything You Need To Know

What if you held a stock that, within a five-month period, produced 4,100% return?! Wrap your mind around these numbers, on Sunday, June 23, 2017, the price of Ethereum stock soared to a record high price of $319, a mind-boggling price jump of 4,100% from the initial starting price of $8.52 when Ethereum opened on January 1, 2017.

Many have heard of Bitcoin, a cryptocurrency which is purchased through several marketplaces called “bitcoin exchanges” which is then used to buy merchandise anonymously, make international payments, fund small businesses, or simply serve as an investment. Well, move over Bitcoin, Ethereum is Bitcoin on steroids and is taking the cryptocurrency and blockchain world by storm. In fact, many projections show Ethereum overtaking Bitcoin in terms of market value by 2018. So, first things first, what is Ethereum? Let’s take a look.

Introducing Ethereum

Ethereum is a worldwide, decentralized network of interconnected computers (nodes) that enforce, execute, and validate programs without typical system resources (servers, etc.) as they are provided by thousands of ethereum nodes available internationally. Ethereum touts itself as “the World Computer.”

The World Computer uses smart contracts (code functions), allowing developers from around the world to create decentralized apps or DAPPS. To quote ethereum.org, “Ethereum is a decentralized platform that runs smart contracts: applications that run exactly as programmed without any possibility of downtime, censorship, fraud, or third-party interference.” You may ask, what is the difference between Bitcoin and Ethereum? Here is the nitty-gritty between the two.

Ethereum vs. Bitcoin

Bitcoin Ethereum
Founders This is where the water gets murky. Bitcoin’s founder is still up for debate; many online articles allege that someone under the alias of Satoshi Nakamoto started Bitcoin. Once Nakamoto left the project, he supposedly relinquished ownership to a number of individuals outside of Bitcoin. Oddly enough, Bitcoin also paints the following vague picture of Nakamoto, “The first Bitcoin specification and proof of concept was published in 2009 in a cryptography mailing list by Satoshi Nakamoto. Satoshi left the project in late 2010 without revealing much about himself…The Bitcoin protocol and software are published openly, and any developer around the world can review the code or make their own modified version of the Bitcoin software. Just like current developers, Satoshi’s influence was limited to the changes he made being adopted by others, and therefore he did not control Bitcoin. As such, the identity of Bitcoin’s inventor is probably as relevant today as the identity of the person who invented paper…Nobody owns the Bitcoin network much like no one owns the technology behind email.” This one is pretty straightforward. Vitalik Buterin began as a key writer and developer for, you guessed it, Bitcoin. Buterin was also the co-founder of Bitcoin Magazine. At 21 years of age, he conceptualized a better way of utilizing the blockchain concept that Bitcoin and others were using and dropped out of the University of Waterloo to spend time traveling the world, visiting individuals working on Bitcoin. The rest is history, Buterin saw an opportunity to expand on blockchain ideology and began developing Ethereum, wrote a white paper on his findings, received online crowdsale funding in 2014 for development, and the ethereum platform was released in 2015.
Blockchain Technology The bitcoin blockchain is decentralized and has a range of uses including the following:

 

·         Funding companies

·         Investing cash

·         Transferring money without fees

The ethereum blockchain is also decentralized but is far more robust in what it offers as an open-source computing platform featuring peer-to-peer “smart contracts”, ethereum.org describes them best as “account holding objects on the ethereum blockchain. They contain code functions and can interact with other contracts, make decisions, store data, and send ether to others. Contracts are defined by their creators, but their execution, and by extension the services they offer, is provided by the ethereum network itself.”
Cryptocurrency Bitcoin Ether

 

Many confuse the cryptocurrency ether with Ethereum, which is the name of the blockchain platform itself.

Create Digital Tokens Not available Ethereum allows you to create digital tokens that can be used to represent virtual shares, assets, proof of membership, and more. Similar to unique digital currencies used within an online or app-based game.
Funding for Development Not available You don’t need Kickstarter (a funding platform) to get your project started. Developers can raise funds for various applications by setting up a contract and seeking pledges from the ethereum community. This is what makes smart contracts so useful; funds are held until goals are reached and/or an agreed upon date. If the goals are not met, the funds are released back to the contributors.
Average Block Time (Transaction Time) 10 minutes 12 seconds, allowing for faster transaction times.
Programming Language C++ based and is called Bitcoin Core. Similar to Javascript and is called Solidity.

 Now that we know the differences and how Ethereum is changing the game, it is important to know just how Ethereum is used.

How Ethereum is Used

Developers use the ethereum blockchain as the foundation upon which to build apps. Vitalik Buterin has often compared Ethereum with a cell phone. Your cell phone acts as a platform for development. A cell phone is the foundation and contains apps allowing you to play games, manage finances, shop for products and services, stay in contact with family and friends, edit photos and video, manage your weight, the list is endless.

When you develop a new application for a cell phone, you simply write the code and upload it to an app store, and if someone wishes to use your application, they simply download it. You don’t have to make your own hardware; you don’t have to have your own manufacturing, you don’t have to have your own distribution. You write a piece of code and people download it. That is the idea behind the ethereum platform.

How to Buy Ether

To develop on the ethereum platform, you guessed it, you need ether, so how do you get it? Because ether is not an actual Fiat currency (for example, USD, EUR, etc.) current market value determines its price. You can purchase ether through one of the following popular Bitcoin exchanges that also supply ether:

  • Coinbase
  • io
  • Coinhouse
  • Kraken
  • Poloniex
  • io

It is important to note that there are fees associated with each sale and those fees vary depending on the service you use.

Whether you want to develop on the ethereum platform, purchase and trade ether as an investor, or just watch Ethereum’s story unfold, sit down and enjoy the ride.

It looks like Ethereum is here to stay and is set to give Bitcoin a run for its money.