Ethereum is a blockchain that aims to be a decentralized computer. Applications can be built on top of it, which is also known as decentralized app or D'apps. For the application to run, you have to pay in the form of a Gas coin.Because of the scope of what Ethereum is trying to achieve, it's a network that has significant implications. If it succeeds, it's one of those projects that can change how we live. In other words, its potential is massive.
Ethereum is a blockchain network. And, it's also a platform as it aims to be like an operating system in which other applications can run on top of it. The code is open-source, so everyone can check it or use it. Ethereum also has its own programming language known as Solidity. Ethereum is also a decentralized platform, which means that technically no one owns it. Independent miners are doing the recording and verifying of the transactions. Ethereum by itself is a coin, but it also has another related coin called "Gas."
What is Gas?
If you build an application for the Ethereum network, you will need to use the network's processing so your app will run. Since processing takes resources, you will have to pay for it in the form of Gas.
Difference in ETH and BTC
After bitcoin (BTC), Ether (ETH), the Ethereum network's cryptocurrency, is the second most widely used digital token, and therefore many users find themselves comparing these two types of cryptos.
ETH VS. BTC
Both Ethereum and Bitcoin networks are based on the shared ledger and cryptography principles. But there are several technological distinctions between them.
Ethereum uses the Ethash algorithm, whereas Bitcoin uses the SHA-256 algorithm. They both used to rely on the proof of work (PoW) consensus model, but Ethereum has now switched to the proof of stake (PoS) protocol to improve its scalability, sustainability, and security. However, because PoS is energy costly, there's a need for greater computing power.
In terms of block time, ether transactions are super fast compared to Bitcoin. Furthermore, Ethereum deducts gas expenses from transaction participants, whereas the Bitcoin network distributes transaction costs to all participants.
Although the quantity of ETH that can be minted is unlimited, block processing time limits how many Ethers can be created per year. On the other hand, the total amount of bitcoins that can be issued is limited to 21 million.
More notably, while bitcoin was created to function as a payment method, the Ethereum platform was created to support various DeFi applications using blockchain technology.
After publishing its white paper in 2014, Joe Lubin and Vitalik Buterin launched Ethereum in 2015. There are over 120 million Ethers in circulation. In 2016, an anonymous attacker stole 3.6 million Ether from TheDAO, a decentralized fund.
Future ETH Projects
The conversion of Ethereum to a PoS protocol is expected to aid the growth of this blockchain. Miners can now create new ETH using their existing ether holdings without dealing with network congestion or exorbitant gas expenses. It's also used in the NFT, gaming, and virtual reality industries. Advanced Micro Devices (AMD) and ConsenSys have also launched a collaborative venture to build data infrastructure based on the Ethereum architecture. It is also projected to play an important role in the metaverse.
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