As far as cryptocurrencies and alternative payment methods go, there are a gazillion options to choose from. But, what makes Ethereum stand out is that it is not just a payment platform but also a decentralized network of computers running on a blockchain that helps developers to build, facilitate and publish decentralized applications with a common programming language.
Brief History of Ethereum.
The history of Ethereum begins in the early days of the Crypto market, in 2013 when Canadian-Russian programmer Vitalik Buterin published a whitepaper document describing the technical design and functionalities of the Ethereum concept.
In the paper, Buterin describes Ethereum as “a decentralized, global computer network that could run on a blockchain similar to Bitcoin.”
By 2014, Buterin concluded the first version of Ethereum, with significant help from a Swiss development firm in Crypto Valley, now known as the Ethereum Foundation. This early version of the software helped to provide the groundwork for the promotion of an Initial Coin Offering (ICO) for the project. You can think of an ICO as the crypto equivalent of an Initial Public Offering (IPO) that companies launch to raise funds on the stock market.
Ethereum’s ICO in 2014 was an instant success. The project raised $16 million from investors. This provided resources and reach to create the first network of ETH miners and shareholders globally.
Unlike other cryptocurrencies, Ethereum is more than just another store of value or medium of exchange. It is an ecosystem of decentralized computer networks powered by its native currency called Ether. In essence, Ethereum is so valuable to the crypto world because it’s more than just an alternative to the dollar, euro or the pound. It has much broader use cases.
Ethereum for Transactions
When it comes to day-to-day business transactions Etheruem has a native currency called Ether.
Due to the meteoric success of the Etheruem blockchain, Ether has gained widespread adoption as a tradeable digital currency in financial transactions, as an investment vehicle as well as a reliable store of value.
Today, Ether (ETH) has been adopted as a veritable means of payment at many high-profile businesses and stores worldwide. Some of the major stores that accept payment in Ether include Shopify and Gipsybee. Companies like CheapAir, Tripio, Travala, or Trippki also allow you to pay for your flight and hotel bookings using Ether.
Ethereum for Investment
Ether has also proven to be a viable store of value. Since its inception, Ether has risen to over 1000x its initial price of 0.3 USD. This shows that over the years Ether has increased in value steadily, which gives its investors and holders significant returns on their investments over time.
Ethereum for Smart Contracts
Ethereum also provides a platform for developers around the world to host a smart contract. A smart contract is a blockchain-based agreement between two or more parties. It creates a protocol to hold contributors’ funds until a given date passes or a transactional goal is met. And based on the result of the pre-determined targets, the funds may then be released to the contract owners or sent back to contributors.
Ethereum for DApps
One of the most valuable contributions of Ethereum to the crypto world is how it facilitates the development of Decentralized applications. Decentralized applications, popularly called Dapps are applications built on a decentralized network (Ethereum).
Dapps combine smart contracts with a frontend user interface that users can interact with using their mobile phones or computers. The developers of the DApps can then create a business model that they wish, using the Decentralized networks and Smart contract features of the Ethereum platform.
Some prominent DApps that are hosted on Ethereum include the following
- Trading of Crypto Assets and Non-fungible Token i.e. Aave, Bancor
- Cloud-based operating systems i.e. Nuclux
- Decentralized News Verification i.e. ByWire
- Social Networks and Instant messaging Platforms. i.e. Ethychat
To verify transactions and validate transactions on the Ethereum platform utilized the Proof of Work system. This process involves Network participants, known as nodes or miners, who continuously validate transactions with their computer networks and resources. These Miners are then rewarded with units of Ether accordingly for every successful node attempt to solve a complex mathematical equation.
In late 2020, Ethereum developers announced the plan to transition to the Proof of Stake verification system in a bid to cut down energy consumption for the network by at least 99.95%. The introduction of ETH 2.0 is also expected to improve scalability and enhance the security of the Ethereum Blockchain.
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If you wish to invest in Ethereum without the complex hassle of becoming a miner, there are two broad ways that you can get your hands on it.
You can either purchase from an existing holder through peer to peer to trade or from any of the prominent crypto exchanges like Binance, Gemini, or Coinbase among others…
Most importantly, you need to create a wallet where you will keep your Ether. Experts advise that Hardware and Paper wallets are the most secure methods to store your crypto assets.