Cryptocurrency has indeed taken the world by a storm especially after the sudden rise in the price of Bitcoin. Before, then very few people understood how the cryptocurrency worked or even if it existed for that matter. It is important to note that apart from Bitcoin there several other digital currencies or cryptocurrencies that are valued almost the same as Bitcoin. One such cryptocurrency is Ethereum. Let us take a closer look at what Ethereum is.
Just like Bitcoin, Ethereum also uses blockchain technology. There are several other cryptocurrencies that utilize blockchain technology for online transactions. Most people do not understand how Ethereum works. For beginners, Ethereum is simply an open software platform within the blockchain technology that allows developers to create and utilize applications.
Is Ethereum Different?
There is no much difference between Ethereum and other cryptocurrencies such as Bitcoin save for the face value. In fact, Ethereum works much like Bitcoin for example when it comes to its token known as “Ether”. A person who wants to buy or sell it can easily do so on the blockchain platform the same as it is with Bitcoin.
In addition, Ethereum is highly decentralized with very minimal regulation. It doesn’t depend on banks to confirm transactions or approve anything. What happens is that miners around the world act as banks by running specific computation algorithms. This makes it similar to Bitcoin and other cryptocurrencies.
Those who own Ethereum tokes (Ether) are able to use them to conduct transactions just like any other currency. One of the glaring differences between Ethereum and Bitcoin is that whereas Bitcoin functions entirely as a digital currency, (meant to function as a store value), Ethereum assumes a versatile approach in the sense that people are able to use Ether tokens to design and run applications as well as smart contracts.
What Is a Smart Contract?
Smart contracts are contracts created or written by miners in code forms and then uploaded to the blockchain platform. Whenever a contract is executed, all the nodes in the network are able to detect are run it and then uploaded to the blockchain.
It is very difficult to tamper with Ether once it has been stored in the public ledger. It is also important to note that every program on Ethereum uses a unique amount of processing power. For this reason, it is always advisable to use extra activity at the minimum considering the fact that the program is run by nodes. One of the major advantages of smart contracts is that it eliminates “middlemen”
What Is The Future of Ethereum?
Just like Bitcoin, Ethereum has in the recent past presented a tremendous opportunity for investors around the world. Most businesses and corporations have gained much attraction and confidence in cryptocurrencies such as Ethereum because of its convenience and ease of use. Large corporations such as Microsoft and JP Morgan Chase are already members of the Enterprise Ethereum Alliance, an organization that is dedicated to teaching businesses about Ethereum.