🌀 #2 COIN EXPLAINED: Ethereum - Everything You Need To Know (5 min to read)
Ethereum – Just like Bitcoin? 😲
When speaking about Cryptocurrencies people mostly tend to think about a couple of hundred digital currencies, which are all created for the same reason – transferring tokens from A to B.
There is a difference between nearly every project out there and today I want to introduce you to Ethereum and my thoughts of understanding it.
The Bitcoin Blockchain is an electronic cash system for online payments and used for tracking the ownership of digital currency.
In contrast there is the decentralized computing platform – Ethereum - which features its own Turing-complete programming language. The blockchain records scripts or contracts that are run and executed by every participating node and are activated through payments with the native cryptocurrency ether.
Basically, it is a platform, on top of the Blockchain Technology, for creating so called Smart Contracts (If-Then Functions) and is therefore necessary for more advanced activities than sending Money from A to B.
What does it mean in the real World?
With Ethereum would it be possible to create e.g. a regular savings plan or monthly recurring payments like rent or telephone costs.
Here are some general facts for You! 📚
- Inventor: Vitalik Buterin
- Issued Date: 24th July 2014
- Price when issued: 0,29$ - 0,32$
- Max. Supply: 97 438 024 ETH
- Technology: Blockchain & Proof of Stake
What’s about the mining process?
When looking at Ethereum we are speaking about Proof of Stake. This means that a person can “mine” or validate block transactions according to how many coins he or she holds.
This means that the more Ethereum you are owning, the more power you have.
Good things to know!
The Blockchain of Ethereum facilitates online contractual agreements, called “Smart Contracts”.
What is “Gas”?
Gas is the execution fee for every operation made on Ethereum. It’s a kind of spam protection as it would be too expansive for spammers to make thousands of transactions for a long period of time, if they must pay a fee for each single transaction.
The Gas price, users must pay to interact with the Ethereum network, is set by the Miners (the people who hold most of the stake). They can do so as the can simply refuse any transaction below a certain amount of gas.
Gas is directly connected to you Ether token. If you want to add more Gas, you simply have to buy more Ether.
NOTE: If you look on coinmarketcap and you see “GAS” please don’t mix it up with Ethereum. It is “GAS” used for Transactions on the NEO Platform – Update is coming soon.
The real-world use cases of Ethereum – 4 examples! 🌍
1 – Prediction Markets
The two most popular Ethereum based prediction markets are Augur and Gnosis. As far as I know are both still under development but worth definitely worth to have a look into it.
2 – Crowdfunding
Normal crowdfunding platforms charge around 5% fees of the total money (e.g. Kickstarter).
If you want to avoid the fees a smart contract for crowdfunding can be created on the Ethereum blockchain and is well known under the term “ICO” (Initial Coin Offering – originally from the stock exchange: IPO – Initial Public Offering).
When talking about ICO’s launched on the Ethereum Platform we are also talking about the so called “ERC20-Tokens” (stands for Ethereum Request for Comment).
3 – Web Hosting
Web hosting could be a decentralized network-based business. So, a website would be hosted by the Ethereum network and making it virtually secure.
4 – Storage for important documents
Because the Ethereum Blockchain is immutable and nearly impossible to destroy, it can safely host your legal and important documents.
Funny Fact 😄
Another real use case was created, when the first decentralized game called CryptoKitties was built based on Ethereum. Basically, it's a game where you can raise & trade "crypto cats" by using Gas and Ether. At least one cat was even sold for $100.000...
Here my little summary, illustrated in a picture:
If you have a friend who wants to learn more about Ethereum - Just share this link and participate in educating people in terms of Cryptocurrencies and Blockchain Technology! 😊
The Blockchain keeps continuously improving and I will keep you up to date with it !
Another great post from you👍 Thanks for explaining the cryptocurrencies😊 For me, it looks that Ethereum is better than Bitcoin🤘
Hey @tomhall
glad that you like them! It is definitely not the current number two for no reason. 😊
How did you get involved with Cryptocurrencies? :)
Last year short before the big hype 😟 At this time it was almost too late
It's still amazaing and good to see you here on Steemit! It won't matter in 10 years from now if you entered the market half a year earlier or later :)