What is Ethereum and how can I use Ethereum?

3 Mins read
What is Ethereum

Bitcoin was the only cryptocurrency out there when Satoshi Nakamoto created it in 2008. Nakamoto also developed an underlying technology for Bitcoin, which is called the Blockchain technology. The aim of blockchain was to form a linked, trusted and secure peer to peer electronic cash system which didn’t involve any third-party.

The cryptocurrency became a trend since then, and today there are 1565 cryptocurrencies in the world (as of 10th April 2018), and the number is rapidly growing.

Among the growing number of cryptocurrencies in the market, Ethereum stands second to just Bitcoin in terms of market capitalization. Although there is huge margin in the values of Bitcoin and Ethereum, the latter still holds great value and features for several purposes.

What is Ethereum?

What is EthereumEthereum is an open-source smart contract system, which is used to distribute and keep record of digital tokens called Ether (ETH). Like Bitcoin, Ethereum is also based on blockchain technology.

If you’re wondering what is Ether, it is the name of the cryptocurrency used for Ethereum network.

Simply, you can call Ethereum a platform to use Ether cryptocurrency.

The Ethereum blockchain is completely decentralized and distributed, meaning there is no central authority like central bank, to control the currency and transactions.

It is different from Bitcoin. Bitcoin is just a cryptocurrency, while Ethereum is a cryptocurrency platform for Ether, as well as an open-source development platform. Developers can use Ethereum from GitHub to run code. It can be used to build smart contracts, blockchain-based applications and unique cryptocurrencies (tokens).

Ether is the flagship token (cryptocurrency) for Ethereum, but there are many other tokens like Augur, Golem, and Aragon, which run on Ethereum network.

Who created Ethereum?

Vitalik Buterin ethereum inventorEthereum was created by Vitalik Buterin, a Russian programmer and writer, who also founded Bitcoin Magazine.

The proposal for Ethereum was given in late 2013, and the platform went live on 30th July 2015.

“As society becomes more and more complex, cheating will in many ways become progressively easier and easier to do and harder to police or even understand,” Vitalik Buterin had said when asked about his aim behind Ethereum.

How can I use Ethereum?

The first thing needed for a transaction is an Ethereum wallet where you can securely store your tokens. If you have an empty wallet, you can buy Ethers from Ethereum Exchanges using your bank account, debit or credit card.

Following are the main use cases of Ethereum-

1. Build DAaps

The developers can use Ethereum to build Decentralized Apps (DApps), and monetize them. There are numerous applications of DApps, and if you have built it with an amazing idea, you can make good money using it. For example, Etheroll is a successful DApp that makes millions for its developers.

You can also work for other developers who want to broaden their already built applications and add new features.

What is Ethereum ? DApps

Further, if the transactions are processed using your DApp, you can always take a percentage of every transaction. There are several more ways to monetize your decentralized app.

2. Buy Ether using Bitcoins

The Ether tokens can also be bought using the bitcoins. A number of trusted cryptocurrency exchanges allow you to convert bitcoins into ether.

3. Ether investment

What is EthereumWith the exponential growth of initial coin offering (ICO) market, the Ethereum market capitalization is rapidly rising.

In January 2017, the price of Ether was just around $8, which increased by 5,001% to $407 in June last year. At the time of writing this post, Ether was valued at $699.74. Hence, there are a lot of profits to be made in the Ethereum market.

Predicting the long-term price of ether is not a promising idea, however, experts think that Ethereum market will hit a capitalization of $1 trillion in next 10 to 15 years. According to CoinMarketCap, the current market capitalization of Ethereum is over $69 billion, which was just $30 billion in June 2017.

4. Ether mining

Ether mining is another good option to use Ethereum and make money, especially because the digital asset is expected to grow in value for at least next couple of years.

The mining needs special computer hardware and time dedication. Depending on the computer hardware, dedicated time, and power consumed through the hardware, it can take around six months to pay back the initial investment. In case the price of Ethereum increases to an unexpected value, the time frame will be even shorter.

Also read: What is bitcoin? Should I invest in bitcoin?

Please share your thoughts in the comment section below.

DisclaimerThis blog is entirely for general informational purpose. This does not intend to provide any legal advice or business advice from the site owners.

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