Ethereum Guide for Beginners
With the noteworthy increase in the cryptocurrency hype, you probably have heard about Ethereum. If you are a beginner and willing to buy Ethereum, this Ethereum guide is for you. Now without further ado, let’s explore about Ethereum, its history, use, advantages as well as drawbacks to gain a full understanding.
What is Ethereum?
Ethereum is an open-source, decentralized computing platform that is built on blockchain technology. It is not merely a software platform but also a programming language that features smart contract functionality. In other words, Ethereum, is a decentralized system distributed software platform. Therefore allowing developers to build and install decentralized applications (DApps) that are accessible from anywhere in the world.
However, Ether (ETH) is the native cryptocurrency of Ethereum. This digital currency or token allows transaction operation within the blockchain. Many developers are currently building applications using Ethereum platforms. These include cryptocurrency wallets, financial applications, decentralized markets, games, and a lot more.
Who Created Ethereum?
Vitalik Buterin introduced Ethereum back in 2013. He created Ethereum out of his concerns about the lack of scripting knowledge in Bitcoin to develop apps. Vitalik Buterin publicly announced the Ethereum platform in January 2014.
Are Ethereum and Bitcoin Similar?
Ethereum is linked with cryptocurrency just like Bitcoin. However, this is not the case as it is used to control digital value. Bitcoin is described as the digital currency that is used to transfer money from one party to another. It is, therefore, used as a store of value. Similar to Bitcoin, Ethereum is the decentralized public blockchain network. However, certain technical differences exist. Unlike Bitcoin, Ethereum allows for smart contracts and is known as a highly programmable digital currency.
Ethereum is a software platform that serves as a decentralized app store and decentralized internet. This system needs a currency so that it could run apps and programs. Here ‘Ether’ (ETH) comes into play. ETH is digital money that can be instantly sent from one person to another anywhere in the world. Just like Bitcoin, Ether is decentralized and cannot be controlled by the government or central banks. ETH is used to make payments similar to Bitcoin. Besides, Ether is used to pay transaction fees and services by application developers on the Ethereum network.
How can Ethereum be used?
As mentioned earlier, Ethereum allows the development and deployment of decentralized applications. This app enables developers to use Ethereum for several purposes, such as they can use this platform as a peer-to-peer electronic payment system. With Ethereum, you can decentralize any centralized services. Now you can think of as many intermediary services across different industries. Besides, you can Build Decentralised Autonomous Organisations (DAO) which has no single leader. These are run by programming code that replaces the structure and rules of traditional organizations. These codes eliminate the need for intermediaries. Therefore, a person who purchases a token (ETH) owns DAO.
Moreover, many other cryptocurrencies are being launched using the Ethereum platform. This is due to the ERC20 token standard by which developers can issue other versions of it while raising funds with ICO (Initial Coin Offering).
Benefits of Ethereum
- Decentralized– Ethereum platform is immune to third party interventions, and therefore, all DApps and DAOs cannot be controlled by anyone.
- Secure– It has no central point of failure. Its applications are highly secured against all fraudulent activities and hacking.
- Corruption Free- Applications on the Ethereum network are developed around the consensus principle, eliminating the likelihood of corruption.
- Immutability– Ethereum platform is immutable as no third party can mutate its data.
- Zero Downtime– Applications on Ethereum always stay online and can never be switched off.
Downsides of Ethereum
Despite its benefits, Ethereum is not immune to shortcomings.
- Smart contracts– these are written by humans to build a fault-proof network. Thus, the benefits of smart contracts highly depend on the people who write code for them.
- Code bugs- humans can make mistakes, and any error in the code can lead to adverse consequences. The exploitation of code cannot stop the hacker from attacking the network. It requires a network consensus and rewriting of new code.
- DAO– it was attacked in 2016. In this attack, over 3.6 million Ether tokens were stolen. This attack has undermined the trust of users in the Ethereum network that led to a decrease in Ether’s value from $20 to $13.
No doubt, Ethereum has changed the way we used the internet. Decentralized applications developed using the Ethereum platform has transformed the use of the internet. Since Ethereum removes third parties’ role, it offers many benefits for users that cannot be overridden by its downsides.
Now that you know about the Ethereum and its essentials, what are you waiting for? Visit our website and start buying Ether.