What is Ethereum?

Ethereum or Ether?

First we should be aware of is, Ethereum is a blockchain platform and ether is it's currency which is second largest cryptocurrency by market capitalization after bitcoin.

Ethereum is a blockchain technology that lets you send cryptocurrency to anyone for a small fee. It also powers applications that everyone can use and no one can take down. The network's users can create, publish, monetize, and use applications on the platform, and use its Ether cryptocurrency as payment. Insiders call the decentralized applications on the network "dapps."  Ethereum is open access to digital money and data-friendly services for everyone – no matter your background or location. It's a community-built technology behind ether and thousands of applications you can use everyday.

Vitalik Buterin is the father of the idea of a blockchain-based software platform and he is the co-founder of Ethereum. It's heard that he had prepared the white paper for Ethereum when he was only 19. He proposed the idea of Ethereum in 2013 . In 2014, development was crowdfunded, and the network went live with an initial supply of 72 million coins on 30 July 2015. Currently Ethereum has started implementing a series of upgrades called Ethereum 2.0, which includes a transition to proof of stake and aims to increase transaction throughput using shredding.

How does Ethereum work?

Ethereum works as an open software platform functioning on blockchain technology. This blockchain is hosted on many computers around the world, making it decentralized. Each computer has a copy of the blockchain, and there has to be widespread agreement before any changes can be implemented to the network.

The Ethereum blockchain is similar to bitcoin’s in that it is a record of the transaction history. However, the Ethereum network also allows developers to build and deploy decentralized applications (‘dapps’). These are also stored on the blockchain along with records of transactions. 

Ether can be used to buy and sell goods and services, like Bitcoin. It’s also seen rapid gains in price over recent years, making it a speculative investment. But what’s unique about Ethereum is that users can build applications that “run” on the blockchain like software “runs” on a computer. These applications can store and transfer personal data or handle complex financial transactions.  Therefore, people call Ethereum as the world's computer. 

Ethereum based dApps

The Ethereum blockchain is used to develop and store some decentralized apps called Dapps, they are open-source software that use the blockchain technology. Unlike traditional apps, they aren't owned by any single authority. As they are still a relatively new concept, it is difficult to pinpoint an exact definition of them. However, noticeable common features include the fact that they are open source and decentralized.

Groups of smart contracts are used to create dapps. Smart contracts are scripts of code which can facilitate the exchange of money, shares, content, or anything of value. Smart contracts are formed using the Ethereum Virtual Machine (EVM). Once a smart contract is running on the blockchain, it acts like a self-operating computer program. They run as programmed, without censorship, downtime or influence from a third party.

Ethereum based projects

Ethereum claims its platform can be used to “codify, decentralize, secure, and trade just about anything.” A number of projects are underway to test the concept.

For example Microsoft wants tp offer Ethereum Blockchain as a Service on the Microsoft Azure cloud. It is intended to offer Enterprise clients and developers a single click cloud-based blockchain developer environment. In 2020, Advanced Micro Devices (AMD) announced to create a network of data centers built on the Ethereum infrastructure. Ethereum-based software and networks, independent from the public Ethereum chain, are being tested by enterprise software companies. Ethereum also allows for the creation of unique and indivisible tokens, called non-fungible tokens (NFTs).

How to buy Ethereum?

There are quite a lot of ways to own ether currency. You can simply buy ether from cryptocurrency exchanges. There are quite a lot of crypto exchanges out there. Some of the top exchanges names include Binance, Coinbase, Kraken, huobi and some others. All those exchanges facilitate their users to buy and sell Ethereum. 

Ethereum also has the mechanism of currency mining like bitcoin. What is mining we have discussed earlier while understanding about bitcoin. Although mining requires very highly efficient computer but you can own Ethereum by mining them. 

Should you invest in it?

Ethereum is the second largest cryptocurrency by market capitalization just placed after bitcoin. It has a market cap of $300 billion. Ethereum is very new to the market. Our traditional investment options such as stocks, precious metals like gold and silver, oil and commodities are present here for centuries and are easily trustable and simple to learn about them. But Ethereum is completely new to everyone. So, experts hold mixed opinions about investing in it. 

Whether you invest in them or not, it's completely your choice. But I would suggest you to have some exposure to Ethereum; not too much but with the money which you can lose or that amount which you can afford to lose. The reason behind investing in Ethereum is that it's not only a cryptocurrency transaction medium but also a platform for the development of dApps, defi and non fungible tokens. 

These are my thoughts, Not a financial advice.