Category: CRYPTO BUSINESS
Ethereum – the Blockchain Swiss Army Knife
If you’ve been a part of the cryptocurrency community for more than a few days, then you’ve absolutely head of Ethereum or ETH. While Bitcoin still dominates the news cycles, in many ways it is being overshadowed by Ethereum and the projects and ICO’s it makes possible.Because of the way it is designed it allows for a lot more freedom and personalization, whereas Bitcoin does not. This developer freedom that is built into Ethereum has rapidly made it the rising star of the Cryptocurrency world.And the buzz has become deafening.In fact, Ethereum has been becoming so popular that even the mainstream media is picking up on it.
So what is it, exactly?
Ethereum is a cryptocurrency based on the blockchain design pioneered by Satoshi Nakamoto and in this way is still based on the same pillars that are currently holding up the Bitcoin goldmine.
But the Ethereum developers went a few steps further.
They tried to learn from the mistakes and built-in problems that exist in Bitcoin. That is not to say that Bitcoin is flawed in anyway, it is to say, rather, that Bitcoin is hardly improving in any measure outside of value.
The Ethereum developers wanted to build something that was more powerful, more customizable, and, in general, less archaic.
Bitcoin was invented in 2008. Ethereum in 2015.
Considering the rapid pace of technological development, one can easily see why a foundation laid with the technology available in 2015, along with all the lessons learned from Bitcoin, might make for a more stable and modern piece of software.
The differences between Bitcoin and Ethereum
Bitcoin is focused on the tracking of ownership. With proof -of-work, a wallet receives the coin reward and then anywhere those coins might go is tracked in the public ledger.
To expand, proof-of-work means that a computer owned by a bitcoin user (someone that has a digital wallet to hold them) has solved one of the increasingly complexes ‘blocks’ of math problems that result in the production of Bitcoins. The Bitcoins are distributed as a reward for solving the problem in an intensive process known as ‘mining.’
The ownership of said coin is recorded on a public sheet that grows with each transaction known as ‘the ledger.’ And each transaction is publicly visible on the ledger allowing you to see who owns what, or at least what wallet owns what.
Ethereum works on a similar process but takes it another step further.
In the vein of Java, the developers of Ethereum decided to create what is called a Virtual Machine. The virtual machine allows developers to create and develop piece of software known as smart contracts. Smart contracts are the defining feature of Ethereum and have allowed for third-party developers to create and entirely new structures for using the Blockchain.
In fact, using smart contracts, developers can go so far as to create their own coins and Ethereum-based currencies.
The ICO – The Initial Coin Offering
This freedom has allowed companies to create an entirely new and decentralized method of raising money called the ICO. Basically, it allows users to buy in on coins that will be used by a piece of software or a service that is under construction. This is a win for both investors and startups as it allows startups to get early access to mass-market funds without giving up control and it allows the public to get in on the proven or potential growth of a startup (normally only available through a highly regulated process called an IPO).
The ICO is one of the major reasons that Ethereum has taken off so quickly over the last two years. While Bitcoin has all the benefits of being firmly entrenched, having a large userbase, and being extremely well known, it is Ethereum that is growing leaps and bounds based on new utility. And this is what makes many believe that is could be the next Bitcoin in the sense of the runaway growth that Bitcoin saw in 2017 due to its finally breaking into the mainstream.
It’s still early! Get mining.
One of the great things about Ethereum is that it is still relatively new and doesn’t yet have the mainstream awareness that Bitcoin has. That is to say that it has a lot more untapped growth potential.
With a more advanced technology and a world that is getting over its fear of the blockchain unknown, the Ethereum wave is likely just picking up.
The Bitcoin wave was big, Ethereum could be even bigger.