The emerging Ethereum coin in a battle against Bitcoin

Meta: Heard of Ethereum before? Ethereum is suddenly over the news. This article shares what the bitcoin rival is about.

Introduction 

If you want to have an overall look at what Ethereum is, how it works and what it can be used for in the simplest way, this article shall provide you with a perfect explanation. First of all, you might wonder why there is a need for Ethereum while we already have Bitcoin as a result of the blockchain technology. To answer this question, you had better have a brief understanding of what digital currency is and what the blockchain technology means.

To say it clearer, digital currency is created and held electronically. There are no governmental bodies who are responsible for controlling it. Bitcoin arises as the best and most popular example of digital currency. Bitcoins are not printed like dollars, pounds or euros. It is produced by people around the world thanks to running computers and using software to solve mathematical issues. More than just a digital currency, bitcoins are now accepted by many Governments in the world. You can make payments with Bitcoin.

The emerging Ethereum coin in a battle against Bitcoin

On the other hand, blockchain technology allows digital information to be distributed without being copied, and it is devised for digital currencies like Bitcoin and Ethereum, which will be further discussed later.The blockchain is a ledger that records and verifies all transactions which are made on it. These transactions are not controlled by any banks or governments. To make it simple, the blockchain is a digital ledger of economic transactions programmed not just for financial transactions but also virtually everything that values.

The birth of this new digital currency Ethereum on Ethereum blockchain technology and decentralized platform makes it a more advanced tool for developers to build decentralized applications.

What is Ethereum?

Ethereum is a software platform which is based on blockchain technology enabling developers to build decentralized applications. It is a distributed blockchain network. You might have heard of Bitcoin for years, but Ethereum has only been developed recently (around 2 years). Ethereum was created by a young programmer, Vitalik Buterin and it is a platform for smart contracts.

Ethereum and Bitcoin

Now that you can question about the similarities and differences between Ethereum and Bitcoin. Bitcoin is cryptocurrency because it is only bought and sold on a digital basis. You can make payments in Bitcoin such as paying rental fees, school tuition fees and so on. Bitcoin is not under the control of any banks and governmental bodies.

You have a variety of ways to get Bitcoins. You can purchase them on any exchange or use a computer to mine for bitcoins by solving complicated math problems using the software. To control bitcoin supply, math problems become harder and more complex.

The main difference between Bitcoin and Ethereum lies in their functionalities. While Bitcoin was created and designed as a currency in the first place, Ethereum acts as a platform in which two parties enter into a contract without a third party. In normal circumstances, third parties are usually banks or financial institutions.

Such contracts are called smart contracts. Because smart contracts work on the blockchain, they are programmed and run without fraud, third-party participation and downtime. Besides, the Ethereum platform is controlled by Ether tokens. You can use Ethereum as a currency. It also represents virtual assets, shares or more. In the Ethereum blockchain, you earn Ethereum by mining Ether. Ether is a kind of crypto token fueling the blockchain network.

What makes Ethereum more advanced and more widely favored by developers is it allows developers to program and create any kinds of operations that they want. They can build thousands of applications that are beyond what we have ever seen so far.

Benefits of Ethereum decentralized platform 

  • Immutability: third parties cannot change data in any transactions on the blockchain network
  • Corruption and fraud-proof: as Ethereum transactions are programmed and powered by the Ethereum platform, they are free of fraud, downtime, and corruption
  • Security: Ethereum applications are secured using cryptography, they are protected from hacking and fraudulent activities

Disadvantages of Ethereum decentralized platform 

As written by humans, smart contracts are only as good as the people who write them. Code bugs can lead to adverse actions. If a mistake in a code occurs, a network consensus and an underlying code rewriting must be obtained. This goes against the immutability of the blockchain network. Furthermore, serious questions are raised about the decentralized nature of Ethereum platform.

Ethereum market 

According to CoinDesk, by the end of June 2017, Ethereum surpassed Bitcoin to be the world’s largest cryptocurrency when it comes to market capitalization. Ether currently trades at US$233, but back in June, it was traded at $400. Wall Street and tech firms pay more and more attention to this emerging Ethereum digital currency.

Big companies like JPMorgan Chase, Microsoft, and different firms join together to create the Enterprise Ethereum Alliance in this February, according to CoinDesk. This Alliance aims at using the Ethereum platform to integrate blockchain applications into their infrastructures.

There has been a gradual movement from Bitcoin into Ethereum in businesses. According to a survey made by The New York Times, around 94% of surveyed firms showed their positive feedbacks about the future of ether tokens. About 49% of surveyed firms were positive about Bitcoin.
Furthermore, companies like MGT Capital started to mine Ethereum with the belief that it would be quickly and uniquely positioned as the leading provider regarding processing power to blockchains.

Conclusion 

Do you find it easier to have a much better comprehension of what Ethereum is and what it is used for? I bet you now can tell the functionality and reason for the existence of Ethereum. On the other hand, Ethereum is still quite new to most of us as a result of a lot of technical terminologies used to explain it. Compared with Bitcoins which have already been in the cryptocurrency market for more than 8 years, Ethereum is a newbie. In spite of that, it is considered a revolutionary leap for blockchain technology which brings decentralized applications into the mainstream.