Ethereum ETH Price

Ethereum in 25 Minutes. Vitalik Buterin

Purpose of Ethereum

Ethereum functions as a blockchain network with a number of enhancements. It aims to provide a toolkit for creating and running decentralized applications (dApps). DApps have the same features as any other app made on Windows, iOS, etc. But the difference is that they run on blockchain and, contrary to common apps, which are governed by centralized groups of developers, dApps are controlled by smart contracts, while their developers only maintain them.

Decentralized applications can be anything from financial services to creation and development tools and even games. Most of them focus on cryptocurrencies and their applications. For example, they are used by developers to create online casinos or other games that use transactions within the program.

Blockchain games have become one of the most widespread areas of development for dApps. Even a separate cryptocurrency, TRON (TRX), was created specifically for the gaming industry. Developers use the TRON platform to create decentralized games, including casinos in most cases.

In addition to smart contracts that automatically control transactions, Ethereum developers have created a special programming language known as Solidity. This programming language is used by developers worldwide to create smart contracts and decentralized applications mentioned above.

Ethereum History

The origins of Ethereum begin when Vitalik Buterin became interested in Bitcoin in 2011 as a 17-year-old software engineer. Buterin recognized Bitcoin's shortcomings so he created Ethereum as a technology surpassing blockchain.

Buterin and his team became one of the first people to give businesses clear rules about how to handle blockchain and smart contracts. If bitcoin made cryptocurrencies and blockchain technology popular, Ethereum has developed them into financial instruments.

• 2013: Buterin published a white paper describing the basics of Ethereum.
• 2014: Buterin and co-founders crowdfunded over $18 million for the project with an ICO.
• 2015: Launch of Frontier, the first public release of Ethereum.

Ethereum Tokens

The Ethereum platform lets people make their own tokens. The BNB Coin token, a cryptocurrency of the famous Binance cryptocurrency exchange, was originally produced on Ethereum. Only later it had migrated to its own blockchain. For token release, a special standard ERC20 was developed, and the cryptocurrencies themselves, issued on the Ethereum platform, are called ERC20-tokens.

ETH is the second largest and most popular cryptocurrency after BTC. You can buy ETH on all centralized cryptocurrency exchanges or on decentralized exchanges (DEX). You can also buy ETH from online exchanges or cryptocurrency wallets.

Ethereum Mining

Previously, Ethereum used to be mined using the Proof of Work model, which means that it was physically mined using the power of video cards. With Ethereum's transition to Proof of Stake, global power consumption dropped by 0.2%. Ethereum mining is expected to consume 99.5% less electricity due to the new model. For regular users of the digital currency almost nothing will change as the changes will mostly affect miners.

PoS is new for Ethereum, but the algorithm itself has existed for a long time. For example, the blockchain Cardano and its ADA coin are based on it. The Proof-of-Stake mechanism does not require calculations in such quantity as the confirmation of transactions in a block is made on the basis of number of coins belonging to validators.

To become an Ethereum 2.0 validator, you need to block at least 32 ETH into a stake through a network client or staking pool. Blocked tokens help the Ethereum network perform transactions and generate new blocks. There are several options for ETH staking, such as solo staking, pool staking, staking through special services, and so on.

Critics of the Proof-of-Stake mechanism claim that it can create a high concentration of wealth among a small number of validators and worsen the entry barrier. However, the majority are still convinced that the pros of Proof-of-Stake will prevail.

Ethereum PoW

After the Ethereum update, which stopped coin mining in mid-September 2022, the crypto-community campaigned to launch another version of the network that supports mining. The project was initiated by famous Chinese miner Chandler Guo, who is not for the first time supports the saving of the old version of Ethereum. In 2016, when Ethereum Classic (ETC) emerged as a result of the hardfork, the Chinese miner was the main supporter of its creation.

In the 2.5 months since the launch of the Ethereum PoW blockchain on September 15, ten decentralized exchanges have joined to support the network's token. Also, immediately after the launch of the EthereumPoW network, thousands of miners have also joined to mining ETHW token. As of today, 39 pools, including the Binance platform, already support mining of this cryptocurrency.

Ethereum and Bitcoin: main differences

Elon Musk about Ethereum

On November 16, 2022, in Twitter Space Musk said that he still believes in the future of certain cryptocurrencies.

Conclusion

Ethereum was the first one to introduce many of the things that have become the basis of the modern cryptocurrency industry. In terms of capitalization and value, ETH is consistently ranked second after Bitcoin. It is meaningless to compare Bitcoin and Ethereum because although Ethereum was based on Bitcoin, they represent two different systems that have different purposes. The full-fledged launch of Ethereum 2.0 may seriously influence the evolution of whole cryptocurrency industry, which will undoubtedly have an effect on the value of its token as well.