What is Ethereum And How Ethereum Ecosystem Works?

In the cryptocurrency world, the Ethereum is the second most used, trade, accepted digital currency after Bitcoin. But many of them have not enough knowledge about Ethereum. so let’s understand in brief about it in this article.

After Satoshi Nakamoto release bitcoin to the world in 2008, the community of blockchain developers and researchers started to develop a more innovative blockchain. many developers contributed to open source development of bitcoin. During this period many magazines and blog writers start writing about new innovative ideas and interesting projects about it. one of these community members was a teenager from Canada named Vitalik Buterin. who was working as an official writer and of a publication named “Bitcoin Magazine”. He notices that during watching the whole ecosystem and working projects many of them needed to starts their own blockchain to develop their application. he thinks it is far better if we can develop a single platform where they all able to come and develop their application at a single source instead of developing their own blockchain individual. So he publishes an Ethereum white paper that built many concepts of bitcoin. on the white paper, he describes the limitations of the bitcoin blockchain and proposed a new general-purpose blockchain which can be used as a decentralized application platform. Ethereum will able to do all the things that bitcoin could do like sending transactions between accounts etc but the major limitations of bitcoin were lack of general-purpose programming language who allows creating any application on top of its blockchain. In bitcoin scripts are limited at their capabilities of not able to store states also it’s script is not completed as you can not write a simple structure like a loop. These scripts are also referred to as a simple version of smart contracts. They only allowed for monetary transactions, there was no way to add conditions to those transactions. In his white paper, Vitalik Buterin describes it’s own need a currency called Ether and a new run time environment for smart contracts called an Ethereum Virtual machine (EVM). After Releasing white paper he subsequently releases a yellow paper in mid-2014 with details of technical specifications and working of EVM. The EVM used to create several open-source implementations in different languages in which the most popular is known as GAS.

now On Ethereum, you can write code that controls digital value, runs exactly as programmed, and is accessible anywhere in the world. Ethereum is now becoming an open-source, public, blockchain-based distributed computing platform and operating system featuring smart contract (scripting) functionality. To understand Ethereum deeply let’s be clear with some words used to working with Ethereum.

Smart contract

Smart contracts are a series of instructions, written using the programming language. if the first set of instructions is done then execute the next function and after that the next and keep on repeating until you reach the end of the contract.

smart contracts help you exchange money, property, shares, or anything of value in a transparent, conflict-free way while avoiding the services of a middleman. smart contracts are written in high-level language by EVM Opcodes and also it’s able to store data.

GAS

Gas is the unit of measurement of computation.

Gas refers to the fee or pricing value paid by the sender of the transaction and it is required to successfully conduct a transaction or execute a contract on the Ethereum blockchain platform. Priced in sub-units of the cryptocurrency ether, known as gas, the gas is used to allocate resources of the Ethereum virtual machine (EVM) so that decentralized applications such as smart contracts can self-execute is a secured fashion.

Ether

Ether is the cryptocurrency generated by the Ethereum platform as a reward to mining nodes for computations performed.

In order to support the Ethereum network, developers need the cryptocurrency, to create and run applications. Ether is used to pay for transaction fees and computational services.

Users can send Ether to other users, and developers can write smart contracts that receive, hold, and send Ether.

Let’s understand Ethereum by comparing with Bitcoin

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Advantages

Ethereum cryptocurrency appeared shortly after Bitcoins. Today it is a fully decentralized currency. Here are the advantages of Ethereum blockchain:

• The biggest advantage of Ethereum blockchain is it’s an open system. Everyone from outside can join this project. It also makes it possible to develop this ecosystem and improve it.
• Ethereum transaction fees are lower compared to the Bitcoin blockchain. It makes it really beneficial to invest in initial coin offering projects using this crypto money.
• It works differently compared to other cryptocurrency projects. In contrast to online projects with other types of cryptocurrency, ETH transactions do not require third parties. It is a full package service. Because of this, it is possible to conclude very complex agreements.
• Ethereum is not a self-locked system. It means other goods and services can grow together with ETH blockchain. It makes ETH grow continuously. More and more people start to invest in ETH.
• ETH is a well-planned project. Cryptocurrencies are usually quite spontaneous. Many appear and die quickly. Ethereum is not the case. There exist a clear roadmap for the next 3–5 years. It helps stakeholders to understand how this blockchain will develop.
• Rapid development: It’s easy for developers and enterprises to get started with Ethereum. All-in-one BaaS platforms like Microsoft Azure and Amazon Managed Blockchain services and software-as-a-service (SaaS) platforms like ConsenSys-backed Kaleido attempt to make it easy for businesses to develop their own blockchain networks. New tools and development kits are continuously being released so that Ethereum can easily be adopted among enterprises and businesses.
• ETH has huge support from a business community. Medium-sized companies and large corporations help to improve the work of the system. Ethereum Enterprise Alliance and Hyperledger monitor the development of the project continuously.

Limitations

There are several limitations also there in Ethereum blockchain.

• Scalability: The primary problem with Ethereum is scalability. Transactions are still very slow, as Ethereum’s public blockchain can only process roughly 15–20 transactions per second (TPS) compared to the 45,000 processed by Visa.
• Congestion: There is also congestion during peak activities and it is difficult to maintain time between block, as times between blocks increase the transaction fees go up.
• Competition: While Ethereum is leading the way in enterprise blockchain adoption, it is competing with other blockchain protocols that claim to be more scalable than Ethereum. Such competitors include EOS, Cardano, Stellar, Neo, TRON, and others. As well, Ethereum will be competing with new blockchain protocols that haven’t even launched yet, such as Hedera Hashgraph, Polkadot and Telegram Open Network (TON)
• Uncertainty: Another major drawback to Ethereum for enterprise is that the project is still being heavily developed, and there can be some breakdowns in the system along the way. For instance, for Ethereum to scale, it must transition from a proof-of-work (PoW) to a proof-of-stake (PoS) consensus algorithm in the Ethereum 2.0 upgrade. This is a very serious change — and if it doesn’t go smoothly, the whole system can crash.

So this was the basic information about Ethereum blockchain. The current Ethereum price is around $133.31 and most of all the exchanges allow it. There is also some platform available where any trader can sell or buy it. The BitsShadow is the one that makes trade smart and quite simple by its extraordinary features and trading algorithm. So any trader can trade very smartly any cryptocurrency including Ethereum with BitsShadow.