In the world of cryptocurrency, Ethereum is one of the most well-known names in the market. The open-source, blockchain-based platform lets users create and publish Distributed Apps (or Dapps). These Dapps allow users to make business agreements and conduct transactions without consulting banks to exchange money or hiring lawyers to draw up a sales contract.
All these agreements and transactions on Ethereum are secure thanks to storage in individual blockchain ledgers instead of localised databases (like Facebook or Google use). Blockchain storage means the data in each ledger is far more secure.
To power the blockchain, many computers are necessary to execute lines of code constantly. People who run this code on their computers get rewarded with Ether, Ethereum’s cryptocurrency. People using the platform to access smart contracts on the blockchain can also use Ether.
Here, we go over Ethereum and Ether’s details, including the start of this cryptocurrency and how it compares to others like Bitcoin.
History of Ethereum (ETH)
In 2013, creator Vitalik Buterin, who was just 19, released a paper describing his ideas for Ethereum. The Russian-Canadian wanted to take the technology that powered bitcoin and use it to give the power of economic control to individuals instead of corporations and power brokers.
After a successful crowdfunding campaign in 2014 that debuted Ethereum’s cryptocurrency (Ether) and raised $18 million, the first Ethereum platform, Frontier, came out in 2015.
Ethereum vs Bitcoin—What Are the Differences?
There are many similarities between Bitcoin and Ethereum, being as they are both decentralised digital currencies power by the principle of blockchain ledgers. However, they differ in several ways.
A key difference is that transactions on the Ethereum network can contain lines of executable code, whilst bitcoin transactions are generally just for keeping notes. Also, the platform can confirm Ether transactions in seconds whilst Bitcoin transactions may take minutes.
Both cryptocurrencies also run on entirely different algorithms, with Ethereum using ‘ethash’ whilst Bitcoin uses ‘SHA-256’).
The critical difference, however, is the cryptocurrencies’ purpose. Bitcoin functions as an alternative to national currencies and monetary systems, whilst Ethereum is a platform that facilitates smart contracts via its own currency.
Pros and Cons of Ethereum
- Ethereum is the second most decentralised cryptocurrency in the world.
- It has the largest developer community globally, with constant updates pushing for a better product-market fit and adoption into the mainstream.
- Whenever you build a Dapp on the platform, you can connect it to hundreds of other protocols that already exist. It helps facilitate a quicker launch as a lot of the infrastructure is already in place.
- Whilst Ethereum is faster than Bitcoin, it can still be relatively slow overall and caps out at around 15 transactions per second.
- Being as Ethereum is a new programming language (as well as a platform), there are still some problems with getting developers to code in solidity. Developers are coding in a new language and can occasionally leave vulnerabilities for hackers to exploit.
What Hardware Wallet Should I Use?
There are many hardware wallets available for storing cryptocurrency both online and offline. Two that we recommend for the storage of Ether would be anything from Ledger Nano or Trezor.
Both companies offer different options depending on your budget and are robust, reliable options for storing your cryptocurrency. Some popular models include the Ledger Nano X and the Trezor One.
Overall, Ethereum is taking the cryptocurrency world by storm and has more than earned its place among peers such as Bitcoin. Whilst still not perfect, its constantly evolving platform and host of developers make it one to watch in the digital world of cryptocurrencies.