Inspired by the Bitcoin blockchain, but nevertheless very different in its philosophy, Ethereum is an open source programmable blockchain with its own cryptocurrency: Ether (ETH). It is currently the second largest cryptocurrency in the world by capitalization, accounting for about 20% of the market.
Ethereum (ETH): what you need to know
1 – What is the Ethereum (ETH) cryptocurrency?
- The basic principle : Created in 2015 by Vitalik Buterin, a young Russian-Canadian programmer, the Ethereum platform is a decentralized virtual network that allows the development of decentralized applications called “Dapps. As with bitcoin, this protocol has its own token called ether. Speaking of cryptocurrency, what is called Ethereum actually refers to ether (ETH).
- Functioning: Unlike Bitcoin, which focuses only on peer-to-peer payments, Ethereum allows thousands of developers (more than 3,000 today) to create applications in various fields: finance, real estate, entertainment, etc. No central authority is required to manage these Dapps, which allows do without the giants who reign supreme over the servers, and, in particular, GAFAM (Google, Apple, Facebook, Amazon, Microsoft).
2. The project and blockchain behind Ethereum.
- Project : Like bitcoin, ether exists as part of an autonomous peer-to-peer financial system, free from oligarchic control. Of all the cryptocurrencies, Ethereum is the most likely to compete with Bitcoin as the main cryptocurrency. However, the main difference remains: their emissions. In total, there will be only 21 million tokens for Bitcoin, and there is no limit for Ethereum.
- Blockchain: To ensure complete decentralization, Ethereum uses a virtual machine (Ethereum Virtual Machine or EVM) running on each of the existing nodes in the network. Its unit of account, ether, is designed to reward validators, also known as miners, who guarantee the validity of the chain. Ether is also used to pay Dapps fees.
3 – Analysis and opinion about Ethereum (ETH)
- Ethereum is open source, which means that programmers can create various decentralized applications.
- It is one of the most active blockchains with a much more active ecosystem than Bitcoin and is constantly innovating.
- Such transactions are processed faster on the Ethereum network than on the Bitcoin network (15 seconds compared to over 10 minutes).
Read also Understanding ICO (Initial Coin Offering) in just 3 minutes
- Security vulnerabilities regularly put the network at risk, despite recent more robust updates that have hardened the network.
- First generation smart contracts suffer from a real scalability issue.
- Planned for years, Ethereum’s transition to proof-of-stake has been accumulating delays. Now expected this summer.
- It is not possible to change Dapps or a smart contract that contains a flaw.
4 – How to earn or mine Ethereum (ETH)?
There are various ways to get Ethereum cryptocurrency. In addition to direct purchase through online brokers (eToro, Binance, Coinbase, Kraken, etc.), providing computing power allows you to mine cryptocurrency and receive rewards in the form of ETH.
You can mine alone or through a mining pool, sharing the rewards received. The Ethermine Mining platform is known as one of the most intuitive, efficient and easy to use for ETH mining. For the past few months, the Binance broker has also been offering mining pools at a reduced fee (0.5%).