Ethereum is a form of cryptocurrency that uses the blockchain technology like Bitcoin’s using blockchain technology. The transactions are recorded down, whereby no central authority is involved in the process. This is in contrast to banking system that has always superior control over the transactions. Ethereum is therefore decentralized. The great thing about transaction data is that it can be viewed as the blockchain records everything but it cannot be modified. In this way fraud can be prevented. In order to mine Ethereum, a mining network is used. This digital currency is open source, which means that anyone has free access to the source codes.
It rewards mining for this cryptocurrency. If you contribute to this, you will earn ethers. These ethers serve as the fuel of the network. Mining requires a lot of computing power from your PC. Because this is an open source platform, it is an option to make applications on the blockchain for yourself. This can speed up the process and make it run smoother. This makes Ethereum one of the most flexible cryptocurrencies of the moment. In addition, it is striking that the Ethereum price is relatively stable. Many cryptocurrencies are known for their volatile exchange rate. One day you have gold in your hands, the next you have nothing left. This is not the case with this coin, which makes it a lot more reliable.
Although Ethereum is often used as a designation for the cryptocurrency, this is not entirely correct. Ethereum is the platform you use. When we talk about the real currency, we talk about the Ethers. Ether is therefore the means of payment. Although we regularly use the terms interchangeably in this text, it is good to keep this distinction in mind.
ETHEREUM AND SMART CONTRACTS
Both Ethereum and Bitcoin use blockchain technology. However, there is a big difference between these two in this regard. The Ethereum platform uses smart contracts. As a result, the blockchain not only keeps the relevant information about all transactions, but it is also possible to program them. If you use an app for mobile banking, it is possible to have certain payments performed automatically. Ethereum allows your money to regulate itself. This is also interesting for investors, as there is no third party present as ‘middle man’. This potentially makes Ethereum a more lucrative and stronger platform.
ORIGIN of ETHEREUM?
Bitcoin is still the best-known cryptocurrency at the moment. It was the first decentralized digital currency to be active as of 2009. It soon became apparent that Bitcoin was still suffering from teething problems. There were concerns about security, volatile exchange rates and the use of blockchain technology by criminals for money laundering. In addition, there were many who believed that blockchain technology could be used more efficiently. Also, Bitcoin is not programmable because it is not open source.
Many people believed that Bitcoin was the trendsetter, but it was also a digital currency that one can learn from. What went right and what went wrong? Ethereum was developed in 2015 as an alternative to Bitcoin. The blockchain technology was set up more efficiently, partly because it is an open source platform. This makes it easier for both individuals and companies to create their own applications on this platform. This makes Ethereum more flexible and easier to use, and transactions are smoother and faster. The cryptocurrency was called Ether. This coin thus fulfills the need for decentralized cryptocurrencies as well as for a stronger and more stable alternative to Bitcoin.
WHAT ARE THE BENEFITS OF ETHEREUM?
So Ethereum is actually the platform and Ether is the actual currency. It is also known as ETH. Ethereum has all the advantages that a cryptocurrency naturally has. Firstly, it is a plus that there is no central authority involved. If you transfer money to another person, you transfer your money via the bank to another person’s account. In this case, the bank is the third party or central authority. Since the banking crisis of 2008, a lot of people have wanted independence. They are not interested in a bank as a central authority and are therefore looking for alternatives. Cryptocurrencies like Ethereum offer them this alternative. There is no central authority thanks to the use of blockchain technology. Everything is fairer and more transparent.
Ethereum also has the advantage of being launched later than Bitcoin. Bitcoin may be the best known, but this is also because it has regularly been in the news due to startup problems. Technology that didn’t work, criminals who made extensive use of mining networks to launder money and people whose hard-earned Bitcoins were stolen: it all meant that cryptocurrency did not have a good name in its early years. It did allow other cryptocurrencies to learn from these mistakes and prevent their platforms from being abused. Therefore, Ethereum is more stable and stronger as a digital currency from the start. Ethereum has been around since 2015 and, thanks in part to these reasons, became the second most famous cryptocurrency in the world.
Ethereum has a more stable price compared to Bitcoin. That is not to say that Ether is not volatile. Every form of cryptocurrency is volatile, you cannot escape that. This is not necessarily a bad thing, because you can take advantage of this. At the same time, this also means that you run more risk. As we said above: one day you have gold in your hands, the next day nothing. Still, Ethereum is more stable. This is also because the transactions are smoother. The independence of a central authority has its advantages, but central authorities do ensure that transactions run quickly. The same cannot be said of blockchain technology, where transactions can sometimes take hours. Due to the open source design of Ethereum, this is already a point of improvement compared to Bitcoin,
An advantage of cryptocurrency as a whole is that you can enter into smart contracts. No people need to be involved here. You enter into transactions based on specific agreements. You work peer to peer, without a central authority. A specific action is performed based on certain conditions. Let’s say you’re streaming videos on YouTube while playing games. Someone has the condition that you receive Ether if you achieve a certain high score. If you succeed, you will receive the Ether. If you fail to do this, you will not receive the Ether. This way you can enter into flexible and smart contracts that don’t involve a human being. This is also a big advantage of Ethereum.
In addition, Ethereum has a lot of potential for companies and organizations. We’ve mentioned it before, but it’s really a big plus that this platform is open source and that it is therefore possible for everyone to create their own applications. This makes transactions even smoother. No more bureaucratic hassle, but flexible and instant contracts. This is increasingly becoming a reality, making this a more interesting platform for businesses and organizations compared to other forms of cryptocurrency. It is even possible for companies to create their own crypto currency within this platform. Ether would then not be the only form of digital currency. The possibilities of this platform are almost limitless. This makes the potential of Ethereum greater than all other cryptocurrencies and platforms.
Finally, the potential of this platform is also greater because you can use it for many more applications. Cryptocurrency was developed to be used in online stores, but you can also use Ethereum for making investments, buying shares, online gambling via an online casino, banking and much more. Bitcoin may be bigger right now, but it’s quite possible that Ethereum will catch up in the future.
HOW DO YOU STORE ETHER COINS?
You need a wallet to store digital currency. You heard that right: you also actually store cryptocurrency in a wallet. This usually concerns a digital wallet. It is possible that someone hacks your computer and in this way steals your digital coins. Good protection is therefore of great importance, and a wallet of an excellent quality delivers this to you. There are platforms that provide wallets. You can also download a wallet and store your cryptocurrency in it. These variants are also called software wallets. You can download this for free, but for the best protection, choose a paid version.
There are also mobile wallets, where you store your cryptocurrency on your mobile phone. This means you always have them at hand and you can use them whenever you want. However, if you are looking for the best form of security, then you should opt for a hardware wallet. This is a kind of external hard drive on which you store your crypto coins. Nobody can reach this and is therefore the best form of protection. Please note that this type of wallet is especially recommended if you use cryptocurrencies a lot and you already have some experience in this area.
HOW CAN I BUY AND SELL ETHEREUM?
Cryptocurrency trading platforms are the digital exchanges for trading cryptocurrencies such as Ether. Online you can trade in many types of cryptocurrencies, where it can differ per exchange which coins are offered. You can both buy and sell here, although many prefer a broker for buying coins such as Ether. You act here from person to person or from peer to peer. There is no central body. Supply and demand are brought together here.
WHAT ARE THE RISKS WITH ETHEREUM?
It is of course not all roses and moons when it comes to a cryptocurrency. That is why we also think it is important to highlight the risks of a platform like Ethereum. First, all variants of cryptocurrencies are volatile. Although we already told you that Ether is less volatile compared to other cryptocurrencies, the prices can still be described as volatile. Although a new record in value is in sight, it is quite possible that the prices still fall sharply if it turns out that the reserves at exchanges are depleted. It can turn quickly.
In addition, the question is how cryptocurrency as a whole continues to develop. Will cryptocurrencies become mainstream or will it remain a niche market? Although the demand is on the rise, we can’t say that crypto is mainstream yet. For example, it is not yet a standard option for every webshop. Until this is the case, there will be an invisible ceiling for any form of cryptocurrency. So also for Ethereum, for example.
CONCLUSION: WHAT IS THE ETHEREUM EXPECTATION?
It is clear that Ethereum has a lot of potential. The future will tell us where this will lead. Ethereum as a platform has a number of advantages that make the sustainability of this cryptocurrency a lot greater compared to other digital coins. First, Ethereum is a flexible network because it is open source. This makes it much easier for parties to create their own applications and applications, which can then also be used by others. Although Ether is the currency of this platform, it is even possible to actually create and use your digital currency through this network. This flexibility alone is a reason for many (including well-known companies) to choose this platform.
Because you can make applications yourself, Ethereum is an interesting choice for companies and organizations. Imagine that paying and investing money could be completely automated. Ethereum makes it possible. It is therefore not without reason that large companies have formed an alliance to further develop the potential of this network. If Microsoft indicates that it has confidence in you, you know that it is good. Although Bitcoin is also an option for payments on more and more websites, we still think that Ethereum has more potential. Bitcoin mainly benefits from brand awareness. As the demand for cryptocurrency as a whole is on the rise, more people will discover Ether and Ethereum. They will also recognize the potential of this.
We therefore think that the future of Ethereum looks bright. The platform itself is rock solid and at the moment the Ethereum price is better than ever. The demand is huge and so far the exchanges can keep up with the demand. Prices continue to rise and due to the interest in cryptocurrency, more and more people will discover this platform. Due to the open source design and the flexibility in creating applications, people continue to discover more and more possibilities. Of course this is all speculative and based on the potential of the platform, but that this potential is there is clear. That is why we dare to make this prediction: within a few years, Ethereum will be more famous than Bitcoin.