Cryptocurrencies have taken over the financial markets. The amount of money that is circulating in the crypto markets today is beyond our imagination.
A few years ago, most people were not aware of the existence of cryptocurrencies. Due to this, a lot of cryptocurrencies went unnoticed and people barely invested in them. However, the time has changed.
At the peak of digitalization, people have come to realise the importance that cryptocurrency holds in the near future.
In today’s post, we are going to talk about a cryptocurrency that is booming. In fact, it is the second-largest cryptocurrency in terms of market cap. We will talk about Ether that runs on a platform named Ethereum.
What is Ethereum?
Just like any other cryptocurrency, Ethereum is an open-source platform that runs on blockchain technology. It was introduced in 2015 and since then it has gained a lot of recognition. The founder of Ethereum is Vitalik Buterin who launched Ethereum to complement Bitcoin. It is now one of Bitcoin’s biggest competitors.
Though we have discussed a lot about blockchain in our previous posts, it would be helpful to do a quick recap. Blockchain, as the name suggests is a chain of blocks that acts as a ledger for all crypto transactions. The block contains information about the transactions that have taken place earlier. Once a block is full, it joins the existing blockchain.
The main purpose of Ethereum is to run as a platform for various decentralized applications. The two major components of Ethereum are its currency and the programming language that it uses. Let us take a look at them.
Ether and Solidity
Ethereum, as we mentioned earlier is a platform that has its currency named Ether. In fact, everything you do to use Ethereum leads to either the creating of Ether or its transfer. For instance, if you are using Ethereum to run an application you will have to pay a certain fee.
The fee will be in the form of Ether that is commonly known as the lifeblood of Ethereum. This fee is paid to the miner who verifies the authenticity of the transaction of the work for which you used Ethereum.
Solidity, on the other hand, is the programming language on which Ethereum runs.
How does Ethereum work?
Just like any other cryptocurrency, Ethereum works on blockchain technology. However, there are a few things that make Ethereum different from other currencies. The first one being flexibility. Ethereum is a platform that allows people to run and create a decentralized application by using Ethereum as its base. Therefore, the developers can use it for a multitude of purposes.
In fact, Ethereum is capable enough to perform functions beyond just running applications. The applications that have been created using Ethereum can also store their data on the same platform which will become a part of the blockchain.
Advantages of Ethereum
● Flexibility: As Ethereum can be used by developers to create and run apps, it gives Ethereum an edge over other cryptocurrencies.
● Availability: Unlike other cryptocurrencies such as Bitcoin, Ethereum does not have a limited supply. When Bitcoin was launched in 2009, there existed only 21 million Bitcoins. However, no such limit is there for Ethereum. Although there is a yearly supply limit of 18 million.
● Security and reliability: Ethereum uses smart contracts that are one of the safest forms of storing data. Moreover, the programming language used in Ethereum makes it easy to use. Therefore, it enhances the reliability of the platform.
Disadvantages of Ethereum
● Overburdened with platforms: One of the biggest advantages of Ethereum is a disadvantage as well, depending upon the type of user you are. If you want to use Ethereum as a platform for buying and selling Ether, then you might have to be worried as a lot of platforms can slow it down.
● Lack of information: Bitcoin was launched more than a decade ago while Ethereum came a few years after it. Due to this, there are not many tutorials available for learning about Ethereum. Especially if you want to work on the Ethereum blockchain.
We hope that you were able to get an idea about the basics of Ethereum. However, if you want to know more about cryptocurrencies in India, we have something to offer. We will be providing an online cryptocurrency course for those who want to learn about cryptocurrency.
This upcoming course covers all the major aspects of cryptocurrency. Some of the major topics that are covered are types of cryptocurrencies, top 10 cryptocurrencies, cryptocurrencies market, etc. Moreover, you also get to learn about the future of cryptocurrency in India. So, stay tuned and check our website for more information.