What is Ethereum (ETH)? How does Ethereum Work?
We have all heard about the largest cryptocurrency in the world Bitcoin (BTC). If someone asks what is the second largest cryptocurrency after Bitcoin, we can point towards Ethereum (ETH). Decentralized applications (dApps) are often built on the Ethereum blockchain.
Bitcoin was created as a store of value, whereas Ethereum is a decentralized network for running smart contracts. The concept behind this is to create more decentralized applications that are more secure, transparent, and censorship-resistant. Those applications do not rely on a centralized body or an organization.
Ethereum blockchain is also behind the supporting layer for many smart contract-based applications. Some application uses of Ether are dApps (Decentralized applications), NFT (Non-fungible tokens), DAOs (Decentralized autonomous organizations), Games & Virtual Worlds, and Social Networks.
What is Ethereum?
“Ethereum is a global, open-source platform for decentralized applications. On Ethereum, you can write code that controls digital value, runs exactly as programmed, and is accessible anywhere in the world”.
The official Ethereum website defines Ethereum as above.
Ethereum is a global, decentralized blockchain-based platform that runs on peer-to-peer network technology. With smart contracts, this technology helps to build apps and organizations, stake or hold assets, transact and communicate without the control of centralized governance.
Ethereum is the evolution of the world’s first cryptocurrency Bitcoin technology. If Bitcoin technology is like windows 95 of blockchain, Ethereum is like the modern Windows we have now.
What is the Ethereum total circulating supply?
Ethereum has a circulating supply of 122,051,508 ETH coins, and what is the maximum Ethereum supply information is not available.
Bitcoin technology proved that a peer-to-peer internet-based currency could exist without the support of a centralized authority.
However, Ethereum brings more than just a store of value into the world. With the help of smart contracts, Ethereum has many more use cases that can support the whole world.
Who Invented Ethereum?
The inventor of Ethereum blockchain and cryptocurrency, Vitalik Buterin is a Russian-Canadian programmer. Vitalik got involved in the Bitcoin space in 2011. He wrote the Ethereum whitepaper explaining the background and the concept of Ethereum in November 2013.
Vitalik together with Joe Lubin, the founder of blockchain software company CosenSys, launched the Ethereum platform in 2015.
Buterin appeared on the Forbes Under 30 list at the age of 23. Vitalik Buterin’s net worth was $400 million when Ethereum’s market capitalization hit $30 billion. With this, there was no stopping the second largest cryptocurrency, and the price started to explode making him one of the youngest known crypto billionaires.
How much Ethereum does Vitalik Buterin have?
Vitalik disclosed his public Ethereum wallet in October 2018. His Ethereum wallet held more than 355,000 ETH. As the price of Ethereum varies day to day, the total value in USD also changes according to the market.
How does Ethereum Work?
Ethereum network is built on an array of individual computers worldwide also known as a decentralized computer network. The computer users participate as “nodes” help to run the decentralized network making it difficult to hack for attackers.
With the help of a distributed ledger called a blockchain Ethereum network manages and tracks the interactions. These interactions are considered transactions and recorded within the blocks on the Ethereum blockchain.
It is the miner’s duty to validate these blocks before confirming them to the network and writing transaction history to the digital ledger. This verification method is called the proof-of-work (PoW) consensus method. Miners require computation power to verify each of these blocks which has a unique 64-digit code to identify it. With the computation power, miners solve the above code and prove it is unique. For this proofing, miners are rewarded for their computation power.
To compensate the miner, the user who initiates the transaction has to pay a fee called the “gas fee.” This gas fee is paid as a reward to the miner who validates the transaction.
Approximately every 15 seconds, a new block is added to the Ethereum blockchain. Miners create Ethereum by creating these blocks and solving puzzles.
How to get Ethereum?
You can buy Ethereum on a cryptocurrency exchange like Binance or Coinbase. Being a miner will also support your cause to get hold of Ethereum.
What is the future of Ethereum?
The world’s second-largest cryptocurrency Ethereum has been going mainstream over the past years due to its use cases on NFT, dApps, etc. However, Ether has experienced some concerns. One of those challenges is the transaction speeds. In order to process more transactions with greater mainstream adoption, the blockchain should allow more transaction handling capacity. The Ethereum blockchain can only handle around 15 transactions per second at the moment. The Visa on the other hand process close to 24k transactions per second. Ethereum with the most recent Eth2 update (Ethererum Merge) will see the light to reach more levels in the coming future.
What is your opinion on Ethereum’s future? Leave a comment in the comment section below.