Ethereum (ETH) – What Is It? How and Where to Buy?
Ethereum
$2,549.18
Project Name: Ethereum (ETH)
Website: Ethereum Official Website
Technical Paper: Ethereum Technical Paper
Total Supply: 120 Million
Maximum Supply: $193.450.607.113
Supported Blockchain Networks: Ethereum (ETH) operates on its own ETH network and can integrate with all blockchain networks.
Satoshi Nakamoto’s development of Bitcoin in 2009 was considered a revolutionary step in the financial world, marking the first example of a decentralized digital asset. Following Bitcoin’s success, a series of cryptocurrencies emerged based on blockchain technology. Ethereum ranks second in market capitalization among cryptocurrencies, prompting many to seek more information about Ethereum. In this article, we will delve into Ethereum in detail. If you’re ready, let’s get started!
What is Ethereum (ETH)?
Ethereum (ETH) is the digital currency of the Ethereum ecosystem. Ethereum offers an open-source blockchain technology that anyone can use. What sets Ethereum apart is its integration of new technologies such as smart contracts, decentralized applications (dApps), and the Ethereum Virtual Machine (EVM).
Ethereum is sometimes referred to as the “world computer” because of its versatility. Being a programmable platform enables people to create their own blockchain projects and provides full control without the need for intermediaries. Currently, Ethereum is the second-largest cryptocurrency globally.
How Ethereum (ETH) Works
Ethereum uses a blockchain like Bitcoin but differs in operational aspects. Ethereum functions as a sort of universal computer in the digital realm. Here’s a simple explanation of how Ethereum operates:
- Blockchain Ledger: Ethereum functions like a ledger or record book that records all transactions, but it includes more than just transaction history of other cryptocurrencies.
- Global Computer: Ethereum relies on thousands of computers coming together to operate like a massive computer. Each computer works to secure the Ethereum network and verify transactions.
- Various Applications: Ethereum provides developers the freedom to create various applications, ranging from financial transactions to gaming and beyond. For example, DeFi applications automate financial transactions like lending and trading.
- Ether (ETH): Ethereum uses a cryptocurrency called Ether to operate the network and pay transaction fees. This finances the network’s operations and ensures transaction security.
- Smart Contracts: Ethereum is used to execute pieces of code called smart contracts, which automate the fulfillment of predetermined conditions.
- Gas Fees: When conducting transactions on the Ethereum network, a fee known as “gas” must be paid. This fee varies based on the network’s transaction volume.
Ethereum continues to evolve, with Ethereum 2.0 aiming to enhance network efficiency. This upgrade will make the network faster and more efficient. Ethereum is the wizard of the digital world, offering a wide range of applications.
Who Developed Ethereum (ETH)?
Ethereum was initiated by 8 talented developers and entrepreneurs. The standout figure behind the project is Vitalik Buterin. Vitalik authored the white paper laying the foundation for Ethereum when he was just 19 years old in 2014, with his interest in the crypto world dating back to 2011.
Gavin Wood is another significant figure who played a crucial role in the development of Ethereum in the field of computer science. He is also recognized as the creator of Polkadot, a decentralized network that connects different blockchains.
Among other founders are names with investment and experience in the sector: Anthony Di Iorio, Charles Hoskinson, Mihai Alisie, Joseph Lubin, Amir Chetrit, and Jeffrey Wilcke.
Prior to its official launch, Ethereum conducted a successful Initial Coin Offering (ICO) in 2014. Ethereum’s initial price was around $0.3, and it was officially released on July 30, 2015.
Over the years, Ethereum has become globally accessible through numerous innovations. However, Ethereum’s price has been highly volatile in recent years. It experienced a major increase in 2021, reaching its all-time high of $4,891 on November 16, 2021.
Ethereum is a significant player in the crypto market and could be subject to financial regulations worldwide. Additionally, the crypto market crash in 2022 also impacted Ethereum.
Is Ethereum (ETH) Safe?
Ethereum is a fortress in terms of security in the crypto world. Ethereum and Bitcoin share similar security approaches. Both networks verify transactions and ensure security by utilizing the power of their computers. It’s nearly impossible for third parties to interfere with these transactions.
Ethereum’s security is built on fundamental principles. The system is permissionless and open-source, allowing security experts to continuously audit the network.
However, the security of applications running on the Ethereum network depends on the developers. Some flaws can jeopardize the security of applications. While the source code of applications is visible to everyone, each application has a smaller user base and therefore undergoes less scrutiny by fewer people. It is important to carefully review before use.
The Ethereum protocol is continuously being made more secure. Updates like Ethereum 2.0 aim to increase network speed and enhance security further.
Ethereum and DeFi (Decentralized Finance)
Ethereum is a fundamental platform that enables the start of DeFi (Decentralized Finance). Ethereum’s smart contract capabilities form the foundation of DeFi projects. DeFi applications allow you to perform financial transactions using Ether and other cryptocurrencies. For example, DeFi projects can offer opportunities like earning interest by locking your cryptocurrencies or borrowing and lending with interest.
DeFi helps make finance decentralized and more accessible. This is a significant opportunity for millions of people who have limited access to traditional financial systems. Additionally, DeFi projects can reduce trust in centralized financial institutions and make financial transactions more transparent and fair.
Ethereum’s smart contracts enable reliable and effective operation of DeFi projects, positioning Ethereum as a key player in the DeFi world.
Ethereum and NFTs
Ethereum is a cryptocurrency platform that has had a significant impact in the digital world, pioneering the creation of Non-Fungible Tokens (NFTs).
NFTs are specialized tokens that represent unique digital assets. They can uniquely represent digital assets such as artworks, music pieces, digital collections, and in-game items. Ethereum provides a foundational platform for the creation and trading of NFTs, ensuring their uniqueness and authenticity.
NFTs facilitate ownership and trading of digital assets, offering new opportunities especially for artists and creators. Ethereum’s robust smart contract technology helps in securely and effectively creating NFTs.