Ethereum Cryptocurrency: Everything A Beginner Needs To Know
Bitcoin is considered as the king of cryptocurrencies but Ethereum is considered as the queen of cryptocurrencies.
A person must have complete knowledge of his cryptocurrencies, especially the top ones in the current market. Hence, read further to know more about this interesting cryptocurrency – Ether and the blockchain platform – Ethereum.
What exactly is the Ethereum and what is meant by Ether?
Ethereum, can be defined as follows:
“Ethereum is an open-source, public, blockchain-based distributed computing platform and operating system featuring smart contract (scripting) functionality.”
It supports a modified version of Nakamoto consensus via transaction-based state transitions.
Whereas, Ether can be defined as follows:
“Ether is a cryptocurrency whose blockchain is generated by the Ethereum platform.”
Ether (or ETH) can be transferred between accounts and used to compensate participant mining nodes for computations performed. ETH basically runs the Ethereum network.
The Ethereum platform gives safe and secure experience since it doesn’t allow any hacking, tempering or alteration of the code written. This is done basically via the cryptography.
Also, just like Bitcoin, Ethereum also a decentralized programmable blockchain technology.
The Ethereum website says the following in support of the statements about decentralization and security:
“Ethereum is a decentralized platform for applications that run exactly as programmed without any chance of fraud, censorship, or third-party interference.”
Basically, we can say that, “Ethereum is the network based on the blockchain technology and Ether is the cryptocurrency which helps in running the platform.”
Ethereum is also known as the programmable money. This is basically due to two main reasons:
- Ethereum allows you to build and execute smart contractsas well as Distributed Autonomous Applications (DApps), without censorship, downtime, or any third party.
- The inbuilt programming language Solidityis used to write smart contracts and DApps. After that, the cryptocurrency asset (Ether) helps in executing these apps and contracts.
History of Ethereum
Ethereum was created mainly for it to do the kinds of stuff which were normally not done by bitcoin.
Hence, one of the programmers of the famous Bitcoin Magazine, Vitalik Buterin, had argued that Bitcoin needed a scripting language for application development.
Failing to gain agreement, Vitalik proposed the development of a new platform with a more general scripting language and thus created the decentralized platform called Ethereum in late 2013.
Ethereum was officially announced in the month of January 2014. The announcement was made at the North American Bitcoin Conference in Miami, USA. The core Ethereum team consisted of Vitalik Buterin, Mihai Alisie, Anthony Di Iorio, and Charles Hoskinson
The Russian programmer was later joined in the month of July, by Dr. Gavin Wood, who is now the co-founder as well.
Formal development of the Ethereum software project began in early 2014 through a Swiss company, Ethereum Switzerland GmbH (EthSuisse). Eventually, a Swiss non-profit foundation, the Ethereum Foundation (Stiftung Ethereum), was created as well. It raised $18 million in presale of Ether tokens.
The Team of Ethereum
Ethereum is basically an effort to code, run, and execute smart contracts and DApps independently without human interaction. But it did require a good team to make it possible. The current team includes:
- Vitalik Buterin (CEO)
Through Bitcoin in 2011, Vitalik discovered cryptocurrencies and blockchain technologies. He came up with the Bitcoin Magazine in 2012 out of his curiosity to understand Bitcoin. After getting the Theil Fellowship in 2014, he dropped out of the University of Waterloo to work on Ethereum full-time. Vitalik understood what blockchain technology had to offer for the future, and in 2013, he invented Ethereum.
- Gavin Wood (CTO)
In 2014, Gavin met Vitalik through a mutual friend and got to know about Ethereum. He invented the smart contract language called Solidity. He also wrote the first yellow paper on the Ethereum blockchain for the Ethereum Virtual Machine (EVM).
- Jeffery Wilcke
Since its inception, Jeffery has been looking after the implementation of the Go programming language on Ethereum.
- Ming Chan
Ming serves as the executive director of Ethereum and looks out for regulatory and legal matters of the Ethereum blockchain.
Mining of Ether and Number of Ether produced
The Ether makes sure to keep the Ethereum blockchain platform which tends to be an incentive to the miners. The Ether can be mined using CPU & GPU Mining, which is done through the mining blocks on the Ethereum platform.
“The Ether supply is limited to 18 million per year. Every 12-14 seconds, a new Ethereum block is mined, and a reward of 5 Ether is given to the computer who mined it.”
Ether (ETH) will be issued at a constant annual linear rate through the block mining process. This rate is said to be 0.3 times the total annual amount of ETH created in the pre-sale.
60,102,216 Ether was created in the presale,
Thus, 0.3 times 60,102,216 equals 18,030,664.8
This results in approximately 18 million Ether per year.
Ethereum Wallets and Market Cap
We had earlier mentioned about the various hardware wallets (cold wallets) and software wallets (hot wallets) such as Desktop wallets, Mobile wallets, Web wallets, etc. So here are just the examples of the various Ethereum wallets:
- Hardware Wallets – Trezor, Ledger Nano S
- Mobile Wallets – Jaxx (iOS, Android), Ethereum Wallet (iOS)
- Desktop Wallets – Jaxx (Windows, Mac OS, Linux), Coinbase
- Web wallets: CoinPayments
- Paper Wallets – MyEtherWallet, Classic Ether Wallet, EthAddress
Ethereum’s market cap is about $10 billion, as per February 2018, which equals to just about one-third of the Bitcoin’s market cap. Yet, Ethereum is still among the worthy cryptocurrencies.
Ether prices keep changing very frequently and hence the market cap too fluctuates often. So one could only wait for what the future holds.
Currently, 1 Ether coin equals $499.78 USD which is almost 0.07706090 BTC.
Insight on DAO, its Hack and ETC
DAO stands for Decentralised Autonomous Organisation. DAO was launched in the month of June 2016 with about $150 million in crowdfunding.
It was basically made in order to be a Venture Capital Firm, which not be owned or operated by anyone.
But it was a prey to hacking, as soon as it was launched. This was apparently caused because of a wrong code in the DOA and the result was a loss of DAO tokens worth US$60 million.
In order to repay the loss, a Hard Fork was implemented on the Ethereum blockchain at Block 192000. This made that particular transaction which got hacked as invalid and thus giving way to a new blockchain.
That latest version of the blockchain was known as Ethereum Classic or ETC.
Use-Cases of Ethereum
There are few very interesting use-cases of Ethereum and few of them are mentioned below:
As the official website says, Golem is the first decentralized and open sourced supercomputer worldwide which is developed by Ethereum.
It can be used by anyone via small desktops or laptops to even huge data centers.
“Golem utilizes an Ethereum-based transaction system to settle payments between providers, requestors and software developers. All computations take place in sandbox environments and are fully isolated from the hosts’ systems.”
- You could gain money by renting PCs.
- Shares computer power hence it’s economic.
- Brass Golem is the first practical application which computation of computer-graphics very fast.
- You could run a website/long code for computational resources.
- Calculate a tough computation.
- Mine the cryptocurrencies.
- “uPort returns ownership of identity to the individual. uPort’s open identity system allows users to register their own identity on Ethereum, send and request credentials, sign transactions, and securely manage keys & data.”
- It’s an open source system which is also user-friendly and enables global, unified and sovereign identity system for all including bots.
- It’s secure and also allows verification of your identity using its blockchain platform.
“Slock.it brings the benefits of the Blockchain – transparency, security and auditability – to real-world objects.
Our technology can be embedded in almost any device and the first prototypes are already in the hands of developers.”
- 66 % of the entire world wants to gain profit by sharing assets.
- it makes under-used assets available for rent.
- Ethereum helps in interaction between physical objects like vehicles, apartments, etc.
“SingularDTV is a blockchain entertainment studio laying the foundation for a decentralized entertainment industry. By building the future of rights management, project funding, and peer-to-peer distribution, SingularDTV’s platform empowers artists and creators with powerful tools to manage projects from development to distribution.”
- It’s the first decentralized sci-fi television series worldwide, along with blockchain portal.
- It’s based on Ethereum where users could use the crypto-tokens to drive the ecosystem.
- Entertainment rights are distributed among writers, creators, investors, actors, etc.
- No fraud or third party involved.
“EtherTweet repository contains the code of a decentralized microblogging service running on the Ethereum
The service provides basic Twitter-like functionality to tweet messages of up to 160 characters.
Here, decentralization means there is no company or central authority in control of what is being published.
The system is censorship resistant in the sense that once a message is published, it can only be removed by the publisher.”
- If the content is up-voted, then the publishers could earn Ether.
Difference between Bitcoin and Ethereum
The following image gives a clear difference between the two but it should be noted that there is no particular competition between the two.
Till date, Ethereum is only growing even as we speak. But just like any other cryptocurrency, the prices would rise and might even fall down in the near future.
Hence, it sure has its advantages and applications, yet one could only wait to find out its future in the crypto world.