ETHEREUM — What? How? Why?
What is Ethereum? Learn about a cryptocurrency that has revolutionized blockchain technology while competing with Bitcoin.
Have you ever been chatting or talking with your friend about something and then soon after comes across an advertisement regarding the same?
Have you searched for clothes across Amazon and found related clothes pages on Instagram?
Have you been constantly watching some kind of series and then receiving mails, suggestions, and tweets regarding it?
You aren’t the only one. We all have been there. The same place where our data isn’t entirely ours. Each and every move of ours is tracked by the bits we send out to the internet.
What if I told you that your journey on the internet could be made safer, with no other apps spying on you? What if everything you read was unbiased, not controlled by any company or agenda? What if all your monetary data and transactions could be saved on the internet and be entirely secure too?
Ethereum is the one that opens the gateways to this new world of the internet — a safer, secure, and decentralized one.
So, What exactly is Ethereum?
Ethereum is a decentralized platform used to run blockchain applications and has its own cryptocurrency called Ether(ETH). Just like the Bitcoin, this one is purely digital too, and can be transferred to any corner of the world instantly using the Ethereum platform. Many companies prefer to use this mode of blockchain due to the vast array of advantages that it provides.
Ethereum is programmable, and you can create secure applications using it. Millions of developers all over the world have been using this platform to create cryptocurrency wallets, markets, games, social network, and many other apps.
How does it work? Where can it be used?
Ethereum platform is such that transactions are completed when certain conditions are met. Ethereum is entirely based on the blockchain technology. Each node on the network has a copy of the data of cryptocurrency transactions. Each time a new transaction is added, the nodes verify it by a complex algorithm, and the transaction is added to the blockchain.
It is mostly implemented as smart contracts or DApps (Decentralized Apps). Decentralized apps form the core of Ethereum. It has its own coding language called Solidity, which is similar to JavaScript, motivating developers to learn it and work on creating DApps.
What is Ethereum Mining?
Whenever we need some natural resources like coal, we dig into the earth and mine them. Similarly, mining is used to create every new currency in cryptosystems. To be rewarded with a new currency, nodes on a blockchain must verify transactions. For example, an Ethereum miner node is rewarded with a new Ether. This is also called POW (Proof of Work) because the node has to prove that it has done the work of verifying transactions to receive its Ether award.
Coal mining could be rewarding but it leaves our future bereft of the much-needed resource. Even though it is rewarding, Ethereum mining has its disadvantages. It uses a lot of computing power and electricity which harms the planet too.
Some miners use POS (Proof of Stake) in which users with lot of Ether are selected randomly to verify transactions. However, since it’s not as effective as above, the rewards are low too.
What makes Ethereum so desirable?
- It is decentralized.
- It can be used to make payments.
- It is secure.
- Ethereum programs run without human interference.
- Being validated by thousands, it is highly reliable.
Why should I choose Ethereum over Bitcoin?
Bitcoin was originally created to secure and decentralize payments. Ethereum’s approach is much more broader. It is a decentralized platform for running smart contracts and safeguarding apps. Ethereum provides flexibility and is much more reliable.
Bitcoin uses the Proof-of-Work protocol which is also being used by Ethereum. However, Ethereum users seem to be slowly shifting to the Proof-of-Stake protocol.
Ethereum lets users create their own digital tokens, unlike bitcoin. It also lets users raise virtual funds to fuel their app development process.
Bitcoin takes more block - time than Ethereum. Hence the cost between the 2 platforms varies too.
Both of these have their own advantages and disadvantages and we don’t know who will survive the race! Make sure you research more if you plan to invest in them. And in case you are confused, try both. You’ll win whatever be the result.
Stay Bit-Safe!
