3 Things You Should Know About Ethereum

Ethereum is the world’s most popular cryptocurrency after Bitcoin. Ethereum provides a rather unique system that provides an opportunity for others to develop their own digital currencies and introduces a new feature called smart contracts. It is a decentralized platform for applications that once programmed can never be altered or tampered hence leaving no chance for fraud.

Like any other cryptocurrency, you can add Ether, the currency or asset that powers the Ethereum blockchain into your portfolio. Check out the Ethereum code, that allows you to register an account and have the Ethereum bot do all the trading for you.

Things to Know about Ethereum

Here are three important things you should know about Ethereum.

#1. Ethereum is a Network

Ethereum in itself is not a cryptocurrency. It is the network or platform on which other applications called DApps run on. It allows developers to create and execute smart contracts and cannot be censored or altered by any third party.

The platform uses a special programming language called Solidity that was developed by Gavin Wood who also developed the smart contracts. The platform’s currency ether helps to execute the smart contracts. This network attempts to solve problems such as scalability that were inherent with Bitcoin.

#2. Utilizes PoS (Proof-Of-Stake)

Unlike Bitcoin that uses PoW (Proof-Of-Work) mode of consensus for mining, Ether, the currency that runs the Ethereum network utilizes PoS. This consensus mechanism does not require miners to solve any complex cryptographic problems for them to earn block rewards. This means that miners can use CPUs and GPUs to mine ether as opposed to the complex and specialized mining machines required to mine Bitcoins. It also means using less energy and eliminates the risk of centralization. In PoS, users are needed to stake a part of the tokens they own to stand a chance of being selected among other miners to validate transaction blocks and get rewards from the same.

The miner of a new block, also known as the forger is usually selected in a partially random, two-part process. The first part involves the number of tokens staked, where the higher the tokens, the higher the chances of getting selected. The second part involves involving a degree of chance to prevent the wealthy from taking full control of the network.

#3. ICOs Use Ethereum as their Platform

In a way, the Ethereum blockchain can be termed as the platform for most of the ICOs running and those already completed. ICO or Initial Coin Offering is the process in which start-ups, and especially those in the digital currency field use to raise capital to fund their projects. The capital is raised through issuing and selling of tokens.

Estimates show that more than $3 billion dollars were raised using this method and using ether, the currency that fuels all transactions on the Ethereum network. This trend has pushed the value of Ethereum significantly and will continue doing so considering the network’s favorable properties. With the challenges it is solving, it will soon be the world’s favorite cryptocurrency.

Muhammad Irfan
Muhammad Irfan
Irfan Bajwa is an emerging business enthusiast and passionate blogger and writer on a versatile level.


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