What is Ethereum?

History of Ethereum

Ether is the native currency of Ethereum, a decentralized platform created in 2013 by a 20-year-old young man named Vitalik Buterin. Passionate about cryptocurrencies (especially Bitcoin) and its potential, he created Ethereum so that users can develop and execute smart contracts with just writing a few lines of code.

In order to give monetary value to the operations carried out from Ethereum and to avoid fraud, Ether (ETH) was created as a payment method. On the same website of the Ethereum platform they refer to it as the "crypto fuel" of the network and it is what the platform's clients use to pay for the applications and operations carried out within it.

While the transactions registered in the Bitcoin blockchain only allow recording information regarding who sends it, who receives it, date, and a space to add very limited information predetermined by the Bitcoin protocol, in Ethereum transactions It is possible to add the same data as in Bitcoin, apart from a space that allows adding open instructions, in the form of computational code, which are available to be executed when whoever has the authorization wishes and pays the network to do so.

While the issuance of Bitcoins is limited to 21 million total units, Ether has a limit of 18 million units per year. In other words, each year mining can only generate 18 million new units, but in itself it does not have a limit. It should be noted that each Ether is divisible by up to 18 decimal places (bitcoin only has 8).

Ether Economy

More than 1,700 companies around the world accept Ether as a payment method, according to data provided by Cryptwerk. This includes supermarkets, tourism companies, video games, internet services, and obviously, services related to cryptocurrencies, among others.

When reviewing the information provided by the site, you can see a slow but significant increase in the use of cryptocurrency by merchants from 2018 to 2020. It is impossible not to mention that the United States of America is in the First place among the countries with the highest number of businesses accepting Ethers as a means of payment, followed by the United Kingdom and India, but in very small proportions.

How Ether Works

How does it work

The Ether cryptocurrency works as an open source platform based on blockchain technology. This chain of blocks is found in many computers around the world, therefore, it is decentralized. Each of the computers is present with a copy of said blockchain and there has to be a general agreement before any changes are made to the network.

Notably, like Bitcoin, it cannot be physically found or printed as a banknote from a central bank, so it is a decentralized currency.

Addresses

An Ether address is a form of unique identification for each user that serves to be able to exchange (send or receive) cryptocurrencies quickly and easily.

Transactions

The Ether blockchain is similar to Bitcoin in that it is a record of trading history. However, developers can also build and deploy decentralized applications or "dapps" thanks to the Ethereum network. These are also stored in the blockchain next to the exchange record.

How is it Obtained?

Although Ether can be mined relatively easily, it requires special equipment. However, compared to Bitcoin, the demands are lower since even a computer with an old-generation processor can mine Ether, although, as expected, its performance would be extremely low.

Privacy

In a similar way to Bitcoin, each transaction is registered in the chain of blocks (blockchain), only that this also allows adding open instructions in the form of computational code, which are available to be executed when whoever has the authorization wants and pays the network for do it.