Established in 2015 by Vitalik Buterin, Ethereum is a decentralized and open-source blockchain platform. Ethereum has an active development status and uses EVM 1 Bytecode.
All programming is written in Go, Rust, C#, C++, Java, and Python. Ethereum's operating system is cross-platform, and the platform is x86064, ARM. The size of the platform is 989.3 Gigabytes, and it is available in multiple languages, with English as the primary language.
Ethereum has an open-source license, and its platform type is distributed computing. As of 2021, there are over 10,000 active hosts on the platform.
Ethereum has a native token called Ether (ETH) which is used to buy and sell goods and services, much like Bitcoin. ETH has experienced significant gains in recent years, making it the second-largest and most popular cryptocurrency globally and a lucrative speculative investment.
The unique feature of the Ethereum blockchain is that users can build decentralized applications (DApps) and smart contracts on the platform, allowing them to “run” on the platform like software “runs” on a computer.
Ethereum is a decentralized public ledger where transactions are verified and recorded, with users creating, publishing, monetizing, and using different applications on the platform, using Ether as payment.
How does Ethereum Work?
Ethereum was created to allow developers to build and publish decentralized applications (DApps) and smart contracts. The aim is that these DApps and smart contracts can be used without the risks of downtime, fraud, and interference from third parties.
Ethereum has a unique design that is permissionless, non-hierarchical, and consists of network computers (nodes) that build and come to a consensus regarding the ever-growing series of “blocks.”
In terms of how Ethereum transactions work, blocks on the chain consist of batches of transactions, commonly known as the blockchain. Every block on the Ethereum blockchain contains an identifier of the block. This must immediately follow in the chain to be considered valid.
When nodes add a block to the Ethereum chain, the transactions therein are executed in their order. This alters the ETH balances along with other storage values of Ethereum Accounts.
Balances and values, which are known as “the state,” are maintained on the computer of the node that is kept separately from the overall blockchain in a “Merkle” tree.
Every node communicates with a small subset of the network, which is known as peers. When nodes want to include a new transaction, they send the transaction to peers. These peers send the transaction to their peers, and so on.
This ensures that the transaction is propagated throughout the network. When a node receives a block, they check the validity of all the transactions, and add the block to the chain, and execute all the transactions therein.
In terms of transaction speed, the Ethereum blockchain can process up to 20 transactions within a second. In addition, the Ethereum blockchain has a confirmation time of 5 minutes.
In terms of Ethereum-based projects, Ethereum claims that the platform can be used to perform several functions, including codify, decentralize, secure, and trade, with a significant number of projects underway to ensure this concept.
Microsoft has a partnership with Consensys to offer Ethereum Blockchain as a Service (EBaaS) through the Microsoft Azure cloud.
EBaaS aims to offer Enterprise clients as well as developers with single-click cloud-based blockchain developer environment. Ethereum's platform consists of several layers that are built on one another, making it possible for mass development.
The first layer is a large network of computers that process transactions, while the second contains a software layer where smart contracts are developed and run, using Solidity as the programming language.
The third layer of Ethereum comprises applications that offer a wide range of services, from governance to identity management to different users.
Ethereum has several advantages against many other cryptocurrency and blockchain projects, including the following:
- Decentralization – Ethereum is the second-most decentralized project in the world after Bitcoin. Even if Vitalik Buterin and Consensys have a lot of influence over it, there is no centralized authority that has ultimate control.
- Robust Developer Community – Ethereum has the largest community of developers in the world, even larger than that of Bitcoin, giving Ethereum tremendous advantage and leverage over other projects.
- Interoperability – When developers build an app on Ethereum, it can instantly connect to hundreds of other protocols that already exist. This is often referred to as “money legos.”
In terms of its popularity, Ethereum is popular for the following reasons:
- Smart Contract capabilities – Ethereum was created for building and running smart programmatic contracts as well as applications using its native token, ETH. Use cases for Ethereum in the real world are emerging and increasing in sustainable value, with Ethereum at the front with the execution of smart contracts that will power DApps, including Nonfungible tokens (NFTs) and Decentralised Finance (DeFi).
- Disinflationary Supply – Another reason for Ethereum's popularity is that it has a disinflationary supply as Ethereum currently has an unlimited supply of tokens.
- Scalability and Speed – Ethereum has block times that range from between 10 to 15 seconds.
- Proof-of-Stake consensus method – This is another reason why Ethereum has become so popular, even if it started as a Proof-of-Work (PoW) consensus like Bitcoin that requires mining to validate transactions. Ethereum's move towards PoS has attracted a lot of attention because miners are replaced with transaction validators that involve the staking of coins instead of mining. Validators with the most Ether are given a chance to add new blocks to the blockchain according to the ETH that they stake.
- Ethereum provides a new type of connectivity – The Ethereum infrastructure can revolutionize the way that technology and finance sectors operate because of Decentralised Finance. The Ethereum platform could be used to change the way that many other industries operate as well, such as securities trading and mortgage transfers.
What are the Ethereum-based Projects?
The Ethereum network is well-known for providing the perfect platform for smart contracts and Decentralized Applications (DApps). The Ethereum platform offers a decentralized network for more than 3,000 different decentralized Ethereum-based applications that have different use cases as well as features.
Some of the most popular Ethereum-based Projects are:
- Axie Infinity
MakerDAO is a platform that uses the Ethereum decentralized network to offer comprehensive lending and borrowing services to crypto users. MakerDAO has lending services that do not need a middleman, with loans paid out using cryptocurrencies.
Uniswap is one of the most popular decentralized exchanges available in the crypto space. The growth of this exchange can have resulted in an increase in attention that is given to Decentralized Finance (DeFi).
This exchange does not have control of users' funds on the platform, and it facilitates the trades between users in a decentralized environment. In addition, Uniswap also uses automated market maker (AMM) systems through which trades are facilitated.
This means that the results are associated with the liquidity pools that control the exchange of coins through smart contracts.
Chainlink was launched in 2017, and it is a decentralized oracle platform that provides real-world data, including stock prices or weather reports to different smart contracts.
The Chainlink project increased in popularity in 2019 after it partnered with the Tech giant Google. Smart contracts are defined as pre-specified agreements on the blockchain that work to evaluate information, subsequently leading to automatic execution when the specific conditions are met.
Some of these conditions for the smart contract to be executed include input from real-world data, which is where Chainlink's oracles come in. They are decentralized apps that provide such information to the smart contract.
4. Axie Infinity
Axie Infinity is a decentralized game available on the Ethereum network. The idea behind the game came from other games such as Pokémon and Tamagotchi.
Axie Infinity is a fantasy game based on breeding, raising, and battling with unique creatures that are called “Axies.” These creators can be sold at a marketplace located in-game. Apart from their beautiful appearance, Axies are also given special powers that are handy during battles with other players.
The Axies in the game are considered a type of nonfungible token (NFT) as they have unique characteristics and are created cryptographically from other creatures.
In addition, each Axie has a specific value, and they can be kept as collectibles.
Aave shares similarities with MakerDAO as a lending platform that uses the Ethereum network to provide comprehensive services.
Aave is a decentralized lending service that offers users the ability to lend and borrow without control or intervention from a central authority or a middleman. In addition, when users stake their tokens and allow users to borrow from them, they can earn interest on their staked assets.
The Aave platform is heavily reliant on smart contracts to provide lending services in the crypto community. These smart contracts are operated by a distributed network of computers that use Aave's unique software.
One of the primary functions of this software is to create lending pools that allow users to lend or borrow on the Aave platform.
Ethereum Blockchain as a Service, also known as EBaaS, involves the service on the Microsoft Azure platform that provides developers with the ability to create blockchain applications on the Ethereum ecosystem.
This is done by using Smart Contracts, programs that are “live” on the Ethereum network and responsible for several operations every time a transaction is received.
IN 2015, Microsoft entered a partnership with Consensys, offering users a cloud platform called Microsoft Azure service. This was done under the name “Ethereum Blockchain as a Service,” or EBaaS for short.
This allowed for applications to be created based on technology associated with a chain of blocks, by analogy with that on which the Bitcoin Microsoft crypto was based.
For what is Ethereum used?
Ethereum was created to allow developers to build, publish, and run smart contracts as well as distributed applications (DApps) without the risk of fraud, downtime, or any interference from third parties.
Ethereum often describes itself as a programmable blockchain, distinguishing itself from Bitcoin as a marketplace for financial services in addition to games, apps, and many other application types.
The main uses of Ethereum are as follows:
- Holding and trading of Ethereum for speculative purposes to earn profits.
- The creating of Decentralized Applications (DApps)
- Participation in the Decentralized Finance (DeFi)
Additional functions of Ethereum and its importance to the cryptocurrency space include:
- Smart Contracts – which are self-executing contracts that can verify, enforce, and facilitate transactions across the blockchain network, eliminating third-party intervention and promoting a permissionless and trustworthy solution.
- Monetary Value – Ethereum's Ether can be bought, sold, and traded on major exchanges, allowing ETH holders to purchase and pay for services and goods. Ether's price has increased drastically in the past few years, providing investors with a decent return on investment.
- Fast transactions – Ethereum has an advanced network infrastructure that ensures fast transactions.
- Scalability – Ethereum has a scalable infrastructure that is scalable.
- Secure Agreements – Ethereum provides robust technology that will eliminate any disputes from agreements and contract signing.
Is understanding Ethereum hard?
No, understanding Ethereum is not hard.
Ethereum is a cryptocurrency platform that was created to allow developers to build and publish smart contracts and decentralized applications (DApps). Ethereum's native token ETH is the second-most popular crypto in the market after Bitcoin, and it can be bought, sold, and traded to pay for fees on the Ethereum platform.
Ethereum is an Altcoin – or Alternative Coin, which refers to all cryptocurrencies except Bitcoin, which is the original cryptocurrency.
Ethereum may be an Altcoin, but it is different from other Altcoins in its value, use cases. Ether is advanced and second-generation decentralized digital currency.
Ether runs on the Ethereum platform, and it is used to execute smart contracts, decentralized apps. And it is one of the most popular digital currencies used to fund Initial Coin Offerings (ICOs).
Ethereum was developed by Vitalik Buterin and launched in 2015. Ethereum is the world's programmable blockchain, and it has a programmable network that serves as a marketplace for different games, apps, financial services, and other applications that can be paid for in Ether and which are safe from censorship, theft, and fraud.
Investors, traders, and users must understand Ethereum because it holds a lot of potentials to change how many industries operate, especially because of the movement towards decentralized finance and permissionless economies that can be managed through smart contracts.
What is the Ethereum's Technology?
Ethereum has unique technology that is becoming one of the main attractions in the digital world. Ethereum is often referred to as the key and king in the cryptocurrency world because it is changing the face of financial transactions.
Ethereum's technology shares some similarities with Bitcoin, but it has more advanced modification and innovation. The Bitcoin blockchain is a model that features transactions, while the Ethereum blockchain helps to identify the state of the account in addition to all transitions.
The version of the internet that Ethereum represents is one where servers and clouds are replaced with a network of systems referred to as nodes. These nodes store and maintain a shared database, the Ethereum blockchain.
The network has thousands of nodes that all store the entire blockchain. The more nodes, the safer the Ethereum network and its data. The Ethereum Blockchain, or Blockchain 2.0, is advanced and has two main technological components, namely Smart Contracts and Decentralized Applications (DApps):
- Smart Contracts – The Ethereum blockchain is designed specifically so that transactions cannot take place until certain conditions are met. The rules that decide such conditions are known as smart contracts. Once a smart contract is written, it cannot be changed.
- Decentralized Applications (DApps) – These are simply applications that do not run on a conventional central server but run on a decentralized blockchain. DApps are the core of Ethereum's design and beliefs. Developers use Solidity to build DApps, and they could soon compete against centralized apps in industries such as social media, e-commerce, email, banking, and others.
In terms of the evolution of Ethereum, the timeline is as follows:
- Olympic (2015) – Ethereum was launched in July 2015, but the immediate step before this was referred to as Olympic, the ninth and final proof of concept open testnet. This was made available to developers, allowing them to explore the Ethereum blockchain before launch. Vitalik announced a total reward of 25,000 ETH to developers who tested the network during this stage by trying to overload the network, allowing for insights into how the network could handle high traffic.
- Frontier (2015) – After the Ethereum network was stress-tested for a few months, the Ethereum network was ready for its official public mainnet launch. On July 30, the genesis block for Ethereum was mined into existence, and from this, the community started growing.
- Homestead (2016) – This upgrade was the first planned hard fork of the network, and it was implemented in May 2016, with block 1,150,000. The homestead upgrade included improvements to Ethereum by removing the canary control function, introducing new codes in Solidity, and introducing the Mist Wallet.
- EIP-2 – Main Homestead Upgrades – EIP 2.1 increased the cost for smart contract creation to 53,000 Gas while EIP 2.2 concluded that all transaction signatures whose s-value is greater than secp256k1n/2 would be considered invalid. EIP 2.3 dictated that contracts that do not have enough gas would “fail.” EIP 2.4 eliminated incentives that allowed users to create blocks with differing difficulties.
- EIP-7 – added a new opcode, DELEGATECALL, at 0xf4.
- EIP-8 Future Upgrades was an improvement proposal that focused on any future, planned network upgrades.
- DAO Fork (2016) – This refers to ta Decentralized Autonomous Organization which raised $150 million in token sale funding. In June, DAO was hacked, and $50 million worth of ETH was stolen. This led to a hard fork to restore the funds and to patch vulnerabilities in the network. The original chain, with the stolen ether that could not be recovered, became Ethereum Classic.
- Metropolis: Byzantium (2017) is the next step in Ethereum's evolution which took place in two phases, Byzantium, and Constantinople, with Byzantium going live in 2017 on block 4,370,000, which included several EIPs.
- EIP 100 – adjusted the formula involved with assessing the difficulty of a block.
- EIP 658 – was intended for blocks with the Byzantium upgrade with transaction receipts, including a status field that would indicate the success of transaction with “1” and failure with “0”.
- EIP 649 – which is the Difficulty Bomb, a mechanism that would increase the energy required to mine a new block until it becomes impossible, leading to the inability to create new blocks.
- Metropolis Constantinople (2019) – The second part of the Metropolis update, Constantinople, was planned to go live at block 7,080,000, estimated in Mid-January 2019. However, on January 15, an independent security auditing firm published a report indicating that one of the five main system upgrades could allow attackers the opportunity to steal funds. The launch was therefore delayed and only went live on block 7,280,000 in February 2019. To date, the Ethereum network is still in the Constantinople phase.
- EIP 145 Bitwise Shifting Instructions – this was added to the Ethereum Virtual Machine (EVM), and the instructions allow for pieces of binary information to move to the left and right, leading to smart contract execution becoming ten cheaper.
- EIP 1052 – Smart Contract Verification – which allowed for smart contracts to verify one another by pulling the hash of another contract.
- EIP 1014 – CREATE2 – which improved the enabling of state channels.
- EIP 1283 – SSTORE – Which reduced the gas transaction fees for SSTORE operations.
- EIP 1234 – Block rewards and difficulty bomb delay – which reduced rewards for miners to 2 ETH per block, also known as Thirdening. The implementation of the difficulty bomb was also delayed for twelve months.
- Ethereum 2.0 (2020) – Ethereum 2.0's Phase 0 or The Beacon Chain was formally launched in December 2020, and it is a multi-pronged and multi-year initiative to upgrade Ethereum. This created a Proof of Stake (PoS) blockchain with the ability to act as the central coordination and consensus hub of Ethereum 2.0.
- Phase 1 (2022) – Phase 1 is also known as “The Merge,” which will create shard chains that will be connected to the Beacon Chain, expected to release in Quarter 1 or 2 2022.
- Phase 2 (2022) – Phase 2, known as “Shard Chains,” is set to implement state execution in shard chains, which will spread the load of the Ethereum network across 64 new chains, expected to release in 2022.
In terms of potential, Ethereum is a decentralized platform that aims to democratize the internet and act as a decentralized app store for a wide range of applications. Ethereum has already shown a lot of developments from its launch in 2015, and it has grown into the second-largest cryptocurrency and project in the past six years, with many developments planned.
Ethereum has the potential to change many industries through DApps and smart contracts, creating a trustless and permissionless infrastructure.
In comparison with other technologies, it is important to understand that participants in Ethereum's ecosystem keep a copy of the state of the Ethereum Virtual Machine (EVM).
When users aim to produce a new block, they broadcast the request to the EVM, allowing other participants to validate and execute the transaction. Only if there is successful execution can the state change in the EVM occur.
Developers can create DApps on Ethereum by writing code or smart contracts, and they deploy it to the Ethereum Blockchain. Even though there are projects that are built on Ethereum's blockchain that allow smart contracts and DApps to be developed, Ethereum is by far the largest and most advanced.
Ethereum can be compared with the following:
- Cardano – which also enables similar features like Ethereum, but it has a different approach in its architectural design. Cardano focuses on a research-driven design where academic peer-reviewed approaches are used.
- Algorand – which adopts a pure Proof of Stake protocol that focuses on becoming the optimal chain for use cases where financial products are concerned. Algorand uses smart contracts to achieve highly efficient layer 1 in addition to interoperability solutions with high speeds, scalability, and decentralization.
- Polkadot aims to achieve scalability and speed by adopting interoperable parachains that connect to the main relay chain, much like Ethereum's shards.
- Chainlink is built on Ethereum and aims to become a mainstream decentralized oracle network. TI actively integrates with other blockchain networks to bring real-world data to the blockchain.
What is Ethereum’s price?
Since it was launched in 2015, Ethereum's price has seen different price averages that can be viewed as follows.
|2017||2018||2019||2020||2021 To date|
|ETH Price High||$401.49||$1,396.42||$336.75||$603.90||$4,168.70|
|Eth Price Low||$157.36||$84.44||$122.60||$110.61||$1,787.51|
Is Ethereum Open Source?
Yes, Ethereum is Open-Source.
Ethereum is an open-source, public, blockchain-based, and distributed computing platform as well as an operating system that features smart contract functionality.
Ethereum allows for anyone to build, publish, and run permanent and immutable decentralized apps (DApps), with which users can interact.
The fact that Ethereum is open-sourced is extremely good for investors because it means that Ethereum can grow, expand, and appreciate short and long-term, providing investors with long-term wealth and return on investment as Ethereum's technology develops and Ether gains value.
What is the best Ethereum wallet?
An Ethereum wallet is a software application that lets users interact with their Ethereum account and ETH funds.
Some key terms must be understood, these are:
- An Ethereum account is an entity that can send transactions, and that has a balance.
- An Ethereum Account has an Ethereum address, much like an inbox will have an email address. This Ethereum address is used to send funds to an account.
- An Ethereum wallet is a product that allows users to manage their Ethereum Account. It allows the user to view their account balance, send transactions, and more.
The different types of Ethereum wallets that can be used include:
- Hot Wallets or Online Storage – that allow users to keep their funds online but is not very secure.
- Cold Wallets or Offline Storage – that allows users to keep their funds offline on an application that is not connected to the internet, which is very secure.
- Physical hardware wallets that allow users to keep their crypto offline. These devices are like USB devices or very secure flash drives.
- Web Wallets allow users to interact with their accounts through a web browser.
- Desktop applications allow users to manage their funds through macOS, Windows, or Linux.
- Paper wallets are merely a piece of paper that has a code written on them. To access digital assets, the users must enter the key manually or scan the QR code to access the account.
There are two different types of accounts in Ethereum, namely externally owned accounts (EOAs) and contract accounts.
- EOAs are the most common type of Ethereum Account that has an Ethereum address that is managed by a private key. Users can register as many EOAs as they wish, and these accounts can also be used to create and activate smart contracts.
- Contract Accounts – Every smart contract on the Ethereum network has an account with a unique Ethereum address. Unlike EOAs, a contract account does not have a private key. Instead, the code that defines the specific contract includes pre-defined triggers that are responsible for managing the account.
The functions of an Ethereum wallet are simple. They work in the same way that an internet banking app operates without the intervention of a bank. The Ethereum wallet lets users interact with their Ethereum account, read the balance, send transactions, and connect to applications.
In terms of importance, Ethereum wallets are needed when users want to buy, sell, trade, and store Ethereum. They keep funds safe and connect the user to different applications. They are needed for transactions and when dealing with functions on the Ethereum network.
Some of the best Ethereum wallets are:
- Trezor One
- Ledger Nano S
1. Trezor One
Trezor One is one of the oldest hardware wallets that use a PIN code that never leaves the wallet. Whenever users connect their wallet to their computer, the user must enter a PIN, with Trezor generating a new random pin every time.
After the pin has been entered, the user must enter their unique passphrase that only they will know. Trezor supports a wide range of cryptocurrencies, including Ethereum, Bitcoin, Litecoin, Dash, Ethereum Classic, and many others.
Metamask is a popular digital wallet that can be downloaded as a Chrome extension. Metamask allows developers the opportunity to interact with Ethereum test networks through the wallet.
Metamask offers an abstraction to users, lowering the entry barrier for many who are interested in Ethereum. In addition, Metamask also allows users access to Ethereum DApps through their browser.
The private keys of the user have password encryption with Metamask, and they are stored on the computer with the option of exporting them at any given time.
3. Ledger Nano S
This is one of the most popular hardware wallets that allow users to store private keys on an external physical device. Ledger Nano S allows users to enter a PIN when they start using the device, and this will be the PIN that users use every time. However, users are also given a recovery sheet that must be kept safe if they forget their PIN.
Ledger Nano S supports more than 1,000 coins, and it is lightweight, making it easy to carry around. The wallet also allows users to run third-party apps on the wallet.
Exodus is the perfect solution for beginners who have never had an Ethereum wallet. It has a wide range of features, and it is compatible with Linux, macOS, and Windows.
There is also a mobile app that users can use wherever they go. Exodus also supports the trade between altcoins and bitcoin in the wallet because of a shapeshift exchange.
Another highlight is that the wallet synchronizes with the user's Trezor portfolio, which means that users have all the advantages of a hardware wallet like Trezor and a software wallet like Exodus.
The mist was created by the developers behind Ethereum, making it the official Ethereum wallet in the market. However, users need to be familiar with blockchain if they want to use Mist because it is complex.
The wallet is open-source, and it can therefore be used free of charge. To use Mist, users must install the full node of Ethereum, which will take up more than 900 GB of space on the user's device.
Once the download is complete, the user will now have the entire Ethereum blockchain on their computer. One advantage of Mist, amongst many, is that it is integrated with ShapeShift, allowing users to easily buy ETH with fiat currency or Bitcoin from within the wallet.
What is Ethereum’s Burn rate?
Coin burning in cryptocurrencies means that some of the coins of native crypto or another currency are sent to a public address from which those coins cannot be spent because the private keys of the address cannot be obtained.
The function that coin burns serve are:
- To make new tokens or coins through Proof of burn
- To reward the token or coin holders
- To destroy unsold tokens or coins after an Initial Coin Offering (ICO) or a token sale.
The importance of and the reason why coin burns are necessary are as follows:
- Long-term adherence – coin burns encourage long-term commitment and the time of the project. This enables greater price stability for coins, especially considering investors who do not want to sell or spend their Ethereum.
- It protects against spam – the coin burn mechanism naturally safeguards against Distributed Denial of Service Attack (DDOS), preventing spam transactions from clogging the network.
In August, after the London Upgrade, the Ethereum network started burning thousands of coins. While this is a welcome addition to the inflation of Ether, many expect that Ethereum may become a deflationary asset.
According to network data, more than 4,418 ETH, which is equivalent to more than $12.1 million, was burned after Ethereum implemented the Ethereum Improvement Proposal 1559 as part of a London hard fork.
This burn rate is significantly lower than other cryptos, which burn coins often. Binance burns coins a few times a year, with its 7th coin burn having destroyed 830,000 BNB ($16 million), with VeChain and TRON using the same model.
EOS is another coin with frequent burns, with a burn that took place in 2019 where 34 million EOS was destroyed, worth more than $150 million. There are cryptocurrencies such as VeChain and Ripple that burn tokens during every transaction.
What can you do with Ethereum?
- Trade ETH with other Cryptocurrency assets on an Exchange
- Participate in an Initial Coin Offering (ICO)
- Trade Ether for Goods and Services
- Exchange ETH for “Real” Money (Fiat currency)
- Pay Gas fees on the Ethereum Network
1. Trade ETH
Ethereum is one of the most popular crypto assets in the market. This has become a popular activity because there are more than 12,000 different alternative tokens or “altcoins” in the market that fluctuate in value, according to demand and supply.
Once users have an Ether wallet, they can simply register with a cryptocurrency exchange that offers Ether to start trading. Users can trade Ether for Bitcoin or several other coins such as Litecoin, Ripple, Dash, and many more.
2. Participate in ICOs
An Initial Coin Offering is the process where a new project sells newly-minted cryptocurrency tokens, which is often in exchange for either Bitcoin or Ethereum. This is like crowdfunding or an Initial Public Offering (IPO), where start-ups sell shares to initial shareholders.
This allows Ethereum holders to trade their ETH for a portion of the company's crypto-assets at a discounted price against what the assets would be valued at once the tokens are made public.
3. Trade Ether for goods and services
Because Ethereum is a liquid asset like Bitcoin, ETH can be traded with anyone with an associated wallet address. The Ethereum blockchain is well-known for facilitating peer-to-peer transactions, and it is inherently faster than the Bitcoin Blockchain.
Ethereum also has the added benefit that it supports smart contracts that do not need the intervention of a third party. This allows users to use online peer-to-peer marketplaces to buy goods, services, and even fiat currencies.
4. Exchange ETH for Fiat
Users can exchange their ETH for Fiat across several major exchanges that facilitate these transactions. However, the exchanges that offer crypto-to-fiat conversions are centralized and will require that users verify their identity so that the exchange can connect to the user's bank account to transfer fiat once the ETH is received.
5. Pay transaction fees
This is something that applies to developers as the Ethereum network runs on gas fees. Gas can be defined as a measurement for computational power that is required to execute specific operations on the blockchain of Ethereum.
Each operation, regardless of whether it is a transaction or a smart contract, will require some gas. Gas is used to calculate the number of fees that must be paid to the network so that the operation can be executed.
Miners of ETH receive compensation in Ether, which can be equivalent to the amount of gas that they spent to execute an operation.
In terms of efficiency when compared to other cryptocurrencies, Ethereum is the cryptocurrency with the most utility of all other cryptocurrencies because it can be:
- Bought and sold
- Used as payment for goods and services within and outside the Ethereum ecosystem
- It can be used to pay for transaction fees on the Ethereum network
Most other cryptocurrencies serve one or two purposes, but overall they are used on their native blockchains, apart from Ethereum and Bitcoin, which are highly usable across several different use cases.
What is the criticism against Ethereum?
As with any other cryptocurrency, Ethereum is not free from criticisms. Some of the most recent criticism against Ethereum from market experts, analysts, and many other participants in the crypto space are:
- That the price of Ethereum is not independent of the price of Bitcoin as the original cryptocurrency, Ethereum, and all other cryptocurrencies will always mirror the price action of bitcoin even if they operate independently with proprietary technology, use applications, and blockchains. Ethereum, amongst other cryptocurrencies, will always remain highly speculative and subject to bullish and bearish periods. In 2017, Bitcoin's value changed from between $900 to $20,000, and in 2021 it rose to between $63,000 to settle on $30,000 in July, and these prices were reflected in Ethereum and other currencies.
- Ethereum, along with other cryptocurrencies that use a Proof of Work consensus, will be harshly criticized because mining uses a significant amount of computational power and energy, which is detrimental to the environment. Even though Ethereum is busy transitioning to a PoS blockchain, this change will only take effect in 2023.
- Another criticism is that Ethereum charges ridiculous gas fees to developers and users of the blockchain and platform. While this bodes well for miners who earn rewards, it is pushing developers to seek similar, cheaper blockchains that were built on Ethereum, such as Aave, Algorand, Cardona, and many others.
- Years after it occurred, Ethereum is still being criticized for the DAO hack in which $50 million was lost.
What is the biggest competitor of Ethereum?
Binance Smart Chain (BSC) is the biggest competitor of Ethereum.
Ethereum's metrics are as follows:
- Market Cap – $352 billion
- Daily Transaction Volume – $18 billion+
- Addressed created in total – Over 169 million since 2015, with 1.3 million only in September
- Daily new addresses – 149,000+
- Price Stability – Ethereum is currently in a stable period, but there is another anticipated push forward. Apart from this, ETH's price is stable above the critical support of $2,750, and it tested the $2,950 resistance, having achieved the main hurdle of $3,000+
- Demand – The demand for Ethereum is extremely high because of its unique technology associated with Smart Contracts and DApps for use across industries and in the development and adoption of Decentralized Finance.
- Technology – Ethereum is still the primary blockchain smart contract platform with widespread adoption as more developers use the platform to create, publish and run DApps. Ethereum still has more than 238 DeFi platforms that run on its platform with over 3,000 different DApps. The total value of DApps that is locked on Ethereum is over $123 billion.
Binance Smart Chain's metrics are as follows:
- Market Cap – $63 billion
- Daily Transactions – 2.61 million+
- Addressed created in total: 58.2 million
- Daily new addresses: 2.61 million
- Price Stability – The price of BNB has experienced a major bearish trend across the past few weeks, having dropped by more than 8% since its highest level in September. The price is still below the upper side of its channel, and while rebounds are positive, bullish breakouts have not yet occurred.
- Demand – The demand for BNB and BSC is very high because developers can build products such as Decentralized Finance (DeFi) apps and other Decentralized Autonomous Organizations (DAO) on the platform.
- Technology – BSC has a scalable network, but it does not have the functionality or the flexibility of Ethereum. Binance Chain does not support smart contracts and is mostly used to run the Binance exchange and over 100 DApps, with a total locked-in value of $18 billion.
Is Ethereum better than Bitcoin?
No, Ethereum is not better than Bitcoin.
Both Bitcoin and Ethereum can be traded via online exchanges and stored in digital wallets. Both tokens are mining-based, and they are both decentralized, which means that they are not issued or regulated by a central bank or a single authority.
Both Bitcoin and Ethereum use the distributed ledger technology (DLT) known as the blockchain.
However, there are important distinctions between the two largest and most popular cryptocurrencies.
Bitcoin was launched in 2009 and initially introduced a novel idea that was conceptualized by the mysterious Satoshi Nakamoto. Bitcoin offered the promise of an online currency that is free of central authority, unlike currencies issued by governments. There would not be any physical Bitcoins, only balances that are associated with a cryptographically secured public ledger.
While Bitcoin may not have been the first attempt at this type of online currency, it was the most successful in initial efforts, becoming known as a predecessor to all cryptocurrencies developed in the past 12 years.
The concept associated with a virtual and decentralized currency took some time to get used to, and through the years, it gained acceptance among government bodies, regulators, traders, and investors.
While it is still not formally recognized as a medium for payment or a store of value, cryptocurrency has managed to create a niche through Bitcoin, coexisting with the financial system regardless of the debates, criticism, and scrutiny it faces consistently.
On the other end, there is Ethereum, with blockchain technology being used to create applications that do more than just enable and adopt digital currency. Ethereum was launched in 2015, and it is the largest, most well-established, open-ended software platform that is also decentralized.
The potential applications of Ethereum in real-world scenarios are wide-ranging and are being powered by Ether or ETH. Ether is the fuel used to run commands on the Ethereum platform, and developers use it to build and run applications on the platform.
Ethereum's unique ecosystem allows for smart contracts, and decentralized apps (DApps) to be built, published, and run. Ethereum has its programming language that runs on the blockchain, allowing developers the freedom to build and run DApps.
ETH can be used for a wide range of purposes, including being traded and exchanged, using it to pay gas fees on the Ethereum network, paying for goods and services, funding ICOs, and more.
In terms of differences between Bitcoin and Ethereum, it is necessary to consider that both networks are powered by DLT, but both Bitcoin and Ethereum differ technically in many ways.
Transaction son Ethereum may only contain an executable code, while data that is affixed to Bitcoin transactions are typically only used for keeping notes. The transaction speed is different between Ethereum, and Bitcoin and Bitcoin purely uses a PoW consensus method while Ethereum will eventually transition to a PoS mechanism.
Bitcoin was created as an alternative to national currencies, and it, therefore, aims to be a medium of exchange in addition to a store of value. Ethereum was intended as a platform where immutable, programmatic contracts and applications can be facilitated via ETH.
For this reason, Ether can theoretically not compete with Bitcoin, especially considering that Bitcoin's market capitalization is over $800 billion and Ethereum over $350 billion.
Can Ethereum and Bitcoin Coexist?
Yes, Ethereum and Bitcoin can coexist.
Both Ethereum and Bitcoin's most active members and communities may never stop fighting over technology and money, amongst other things. However, these blockchain-powered networks can coexist through Decentralized Finance (DeFi).
Ethereum and Bitcoin cannot be compared to one another, or it would be like comparing apples to oranges, according to crypto experts.
Both Ethereum and Bitcoin have seen increased adoption in 2021, and this is not set to decrease in the next decade, despite both networks facing occasional challenges.
According to crypto payments provider, BitPay, Bitcoin remains the most popular cryptocurrency that is used for purchases, representing 72%, but Ethereum has grown to 10%.
While Bitcoin will continue to grow as a treasury asset which will undoubtedly secure its position as the most widely used crypto, however, Ether is expected to grow in the medium term as use-cases will continue to increase, driven by the NFT market. In addition to this, Decentralized Finance (DeFi) is set to change the game.
DeFi uses smart contracts to automatically execute code that resides on a blockchain, especially Ethereum. This means that while individual metrics improve, new money will enter the DeFi market from funds as well as trading firms and centralized yield platforms. With these providing the bulk of liquidity.
There are new applications that are being built on Ethereum, making traditional financial markets increasingly sophisticated in understanding the potential that crypto has as an asset class, with a wide range of bridges being built to Ethereum from other blockchain platforms, such as Corda.
DeFi may become a bridge as it is rapidly evolving, and it can effectively bring Bitcoin to the Ethereum network. This will provide blockchain traders with the bridge they need to Ethereum while they also maintain exposure to BTC.
Bitcoin is technically the original DeFi application. However, the DeFi sector, as propagated by the Ethereum network, does not have a lot of use for BTC right now, especially since BTC cannot be directly used on the Ethereum platform or other Ethereum-based blockchains unless it is converted into an ERC-20 token, or wrapped, such is the case with Wrapped Bitcoin (WBTC).
How does Ethereum make revenue?
Ethereum makes revenue from transaction fees, platform usage, and third-party usage.
Ethereum's transaction fees have never been higher, and this is because of a combination of network use along with historically high Ethereum prices.
The transaction fees are consistently changing, depending on the network congestion. The more transactions there are, the higher the price can go if users are willing to pay a certain premium.
In August, Ethereum implemented the London Upgrade that made transactions more predictable for users by overhauling the transaction fee mechanism.
Every block on the Ethereum blockchain has a base fee, which is the minimum price per unit of gas for inclusion in this block. This is calculated by the network according to the demand for block space.
The base fee of the transaction fee is burnt, and users are required to set a tip, or priority fee, in all their transactions. The tip will compensate miners when they execute and propagate user transactions in the blocks, and this is expected to be set automatically by most wallets.
The calculation for the total transaction fee is as follows:
Gas units (limit) x (Base fee + Tip)
For instance, John must pay Terry 1 ETH. In the transaction, the gas limit is 21,000 units, and the base fee is 100 gwei, with John including a tip of 10 gwei.
This is then calculated as 21,000 x (100 + 10) = 2,310,00 gwei, or 0.00231 ETH.
When John sends the money, 1.00231 ETH will be deducted from his account, and Terry will be credited 1.0000 ETH, with the miner receiving the tip of 0.00021 ETH and the base fee of 0.0021 ETH being burnt.
The transaction fees earlier in 2021 broker the current monthly record of over $722 million.
According to Ethereum's financial results for the first quarter, which ended in March, showed that total transaction fees, or network revenue, increased 200 times to $1.7 billion, with transaction volumes that increased 20 times to $713 billion, and median transaction fees that increased 126 times to $7.63.
Ethereum made revenue through active participation on its blockchain, in addition to making revenue through the following:
- Metamask – which is the popular Ethereum wallet that can be used on desktop and mobile, reached over 4 million monthly active users (MAUs).
- VISA announced that it settles payments in the stablecoin USDC on the Ethereum blockchain, making VISA one of the largest payment networks to use stablecoin as a settlement currency.
- Meitu, which is a Chinese mobile software company, purchased 16,000 ETH for its balance sheet.
How long does it take to mine Ethereum?
It can take more than a year to mine 1 ETH, depending on the mining rig of the user.
If a user creates a mining rig that has a 100MH/s hash rate, it could take 403 days to mine 1 ETH. If the user has a mining rig with 2000MH/s or 2GH/s, it will take 20 days to mine 1 ETH.
Users with a right that has a mining hash rate of 750.00 MH/s can mine 0.01441370 Ethereum a day.
The following cryptocurrencies have different mining times, including:
- Bitcoin – with a hash rate of 110.00 TH/s, 0.00072799 Bitcoin can be mined per day.
- Dash – depending on the mining inputs, 0.01893066 Dash can be mined per day with a hash rate of 65,000.00 MH/s.
- Litecoin – With a mining hash rate of 9,500.00 MH/s, 0.22498243 Litecoin can be mined per day.
- Peercoin – with a mining hash rate of 110.00 TH/s, 55.11112645 Peercoin can be mined per day.
- Namecoin – with a mining hash rate of 110.00 TH/s, it would take 535.1 days to mine 1 Namecoin.
In terms of the hardware and equipment to mine Ethereum, users need a specifically designed machine to mine Ethereum. There are two types of Ethereum mining rigs, CPU and GPU.
- CPU mining rigs use CPU processors that use complex algorithms to solve blocks, and they are typically used among beginner miners because they are cheap and easy to use. However, the processing speed is extremely slow, and it could take months, and even years, to see results.
- GPU mining rigs use graphics cards in the same way that CPU rigs use processors. However, graphics cards do not perform algorithms. They merely complete the mining process in enclosed networks. GPU mining rigs are superior to CPU rigs, but they are expensive.
What can Ethereum smart contracts do?
A smart contract can simply be defined as a program that runs on the Ethereum platform and ecosystem. Smart contracts consist of a collection of codes, which are its functions, and data, which is its state, that all reside at a specific address on the Ethereum blockchain.
Smart contracts can be seen as a type of Ethereum account that simply means they have a balance, and transactions can be sent over the network. However, smart contracts are not controlled by the user. They are deployed to the network and subsequently run as they were programmed.
Smart contracts can define certain rules, like any typical contract, and these rules are automatically enforced through the code. Smart contracts cannot be deleted, and the interactions with them are irreversible.
In terms of necessity, smart contracts are important because they help to solve the issue associated with mistrust between different parties as well as business partners. Smart contracts have several advantages for many industries, and they can reduce unnecessary costs as well as time expenditure while simultaneously enhancing transparency.
The uses for smart contracts and examples of real-world application is as follows:
- Insurance – insurance claims can take months to be processed and paid because there is a lack of automated administration, which is problematic for insurance companies and customers. Smart contracts can simplify this process by automatically triggering claims if there are certain events.
- Supply Chain Management – Smart contracts can record ownership rights as items move through the supply chain. They can help to confirm the responsible party for the product at any time.
- Protection of Copyright content – Smart contracts can ensure that royalties are paid to the intended recipients by recording the ownership rights on a decentralized blockchain ecosystem, with the blockchain keeping track of all the ownership rights.
- Digital Identity – Through smart contracts, individuals can own and control their digital identity containing reputation, data, and digital assets.
- Financial Data Recording – many financial organizations, can use smart contracts for the recording of accurate and transparent financial data.
- Mortgage contracts can be automated through smart contracts when parties are automatically connected, offering a frictionless and reduced error-prone process.
Can Ethereum reach 100k?
Yes, Ethereum can reach $100,000 by 2025/2026.
The factors that will boost Ethereum to $100,000 involve:
- Digital Bonds
- Tokenized Real Estate and Securities
- Decentralized Finance (DeFi)
- Nonfungible Tokens (NFTs)
- Institutional Accumulation
- Ethereum 2.0
- Technical indicators and data-science models predict that Ethereum will reach $100,000 by 2025/2026
According to the fundamental potential that Ethereum has as a programmable blockchain, it can easily reach $100,000 because of real-world uses that push the value of Ethereum up.
Other reasons that support this include:
- Applications can be built on Ethereum and benefit from blockchain technology such as decentralization, security, and transparency. Ethereum is considered Internet 2.0.
- Governments can use Ethereum, and there are already some governments, such as Brazil, that are considering writing their laws on Ethereum.
- There are already Central banks that use Ethereum, such as the European Investment Bank (EIB), which issued its first-ever digital bond which was issued through Ethereum, invoking $121 million two-year bonds.
- Tokenized real estate, which is a high-ticket investment, can be done through Ethereum.
Can Ethereum be used as currency?
Yes, Ethereum can be used as currency. Ethereum is already being used to pay for goods and services.
Some several stores and retailers accept Ethereum payments, including:
- Digitec Galaxus, a large Swiss online retailer.
- Direct Voltage, an online store that sells state-of-the-art equipment such as robotic kits, lasers, 3D printers, and other goods.
- Zorket, which is an international marketplace that offers retail fashion products such as clothing, bags, shoes, and various accessories.
- CheapAir.com, a flight ticket aggregator that accepts Ethereum payments to book flights, hotels, and rental vehicles.
- Time Magazine, which is an iconic publication.
- GamerAll, which is a marketplace for gaming characters, weapons, and skins for a wide range of popular games such as DOTA 2, Rust, Team Fortress, and many others.
- Newegg, a prominent online computer hardware store in Canada and the United States.
- Pet Pro Supply Co., a popular pet supplies retailer.
- PizzaForCoins, which is a website featuring a large database of pizza shops in the United States.
- Snel.com, which is a popular VPS hosting Service.
Can Ethereum be tracked?
Yes, Ethereum transactions are traceable, but it is extremely hard to trace them.
The Ethereum blockchain is transparent, and transaction data is accessible to the public. Anyone can use Etherscan to track the movement of funds if they know the wallet address or the wallet address.
However, information from blockchain explores is not enough to link a wallet to the real-world user. But by carrying out careful chain analysis, an individual can trace the origin of where the ETH was initially purchased.
Can Ethereum be hacked?
The Ethereum blockchain cannot be hacked, but smart contracts can be hacked.
It is extremely hard to hack the Ethereum blockchain because Ethereum uses a Proof-of-Work mechanism, and the only way to hack this is through a 51% attack, which means that a group or individual must control 51% of the hash rate if they want to steal money from it.
However, the nature of Ethereum is decentralized, and there are thousands of nodes from different entities that support the network. Therefore the Ethereum blockchain itself has never been hacked.
There have been two events in which theft occurred. These are indicated as follows.
- The DAO attack (2016) was when an unknown assailant syphoned funds from Ethereum's first Decentralized Autonomous Organisation (DAO) after it went live following a $150 million crowd sale. The attack did not break Ethereum's code, but it explored a loophole in the smart contract for DAO, leading to the theft of $55 which was stolen.
- In 2017, an unknown hacker exploited a critical flaw in the Parity multi-signature wallet on the Ethereum network, leading to more than $31 million worth of ETH being stolen.
Can Ethereum make you rich?
Yes, Ethereum can earn investors long-term wealth.
Ethereum's price was only $380 a year ago, and now it is trading at over $3,000. Investors who put money into Ethereum from launch in 2015 have seen increases of over 442,757% from a price of $0.7 recorded for August 8, 2015, to $3,100 on October 1.
Two of the richest Ethereum Investors in the world are:
- Simon Seojoon Kim
- Joseph Lubin
1. Simon Seojoon Kim
Simon Seojoon Kim, the Chief Executive Officer (CEO) of a Blockchain technology company known as “Hashed,” started investing in Ether when it was introduced in 2015.
By the end of March 2017, Kim had put $400,000 into Ether, and currently, it is difficult to pinpoint his investment, but it is no doubt that he is one of the richest Ethereum investors in the world because his $400,000 investment would be worth over $1 billion, and it is not to say that this was his only investment amount.
2. Joseph Lubin
Joseph Lubin has extensive experience in software engineering, robotics, machine vision, and neural nets. He is also one of the largest names to be associated with Ethereum.
Joseph Lubin is one of the important holders of Ethereum, with a valuation that is over $10 billion.
Is it worth it to buy Ethereum?
Yes, it is worth it to buy Ethereum.
When evaluating the investment potential for Ethereum, it is important to consider different factors such as:
- Risk Management
- Price Stability
1. Risk Management
Investment is risky regardless of the investment vessel. Is it safe to invest in Ethereum? Yes, it is safe to invest in ETH.
Ethereum has a very lucrative risk to reward ratio (RR) currently because of technological upgrades, adoption on an institutional level, technical price patterns, and other factors.
Investment in Ethereum is safe if it is done in the right way by:
- Formulating a strategy by deciding on a goal and indicating clear steps to reach that goal.
- Make plans to invest and carry them out, for example, having a profit goal of $50,000 with a price target of $6,500. To reach that goal, the investor needs 7.69 ETH depending on the current price. Next, the investor must decide how and where they will purchase ETH and how and where they will sell it.
There are two major risks involved with Ethereum, namely:
- The risk that the blockchain will be hacked – which is not likely, and it has never happened before.
- The risk that Ethereum's competitors like Cardano, Binance Smart Chain, and Polkadot will catch up will always be a risk. However, Ethereum is too far ahead of the competition when it comes to adoption, and it is not likely that competitors will catch up anytime soon.
2. Price Stability
Like all other cryptocurrencies, the price of ETH has seen significant fluctuations since its launch in 2015, starting at a price of below $1, where it remained for several months.
The price skyrocketed to $1,300 in January 2018, and from there, it plummeted again to reach $80 in December 2018. Since then, the price of ETH ebbed and flowed, but it steadily increased over time. At the start of April 2020, the price was $140, and it reached $3,349 in May, showing a hefty increase in a year.
In a more recent technical analysis, ETH is showing an upward trend while indicating price stability.
Ethereum has already shown a significant return on investment for early investors of the project, with initial investors (who bought ETH at launch for less than $1) seeing returns of over 400,000%.
Ethereum investment is profitable because its value is increasing as smart contact, DApp, and DeFi adoption increases, setting investors up for long-term profitability.
Is Ethereum a good investment?
Yes, Ethereum is a good investment.
Ethereum is not only one of the most popular crypto payment methods, but it is a great resource for many developers. Ethereum is considered the supercomputer version of digital assets, offering developers a digital infrastructure to develop decentralized applications.
Other reasons why Ethereum is a good investment refer to the following factors:
- Liquidity – Unlike conventional investments, Ethereum is a highly liquid asset. Ethereum can easily be traded for gold, cash, fiat currency, and other digital assets at an incredibly low fee.
- Ethereum is less affected by inflation – unlike fiat currencies that are regulated, Ethereum is not affected by inflation.
- Ethereum is known for short-term gains and long-term growth potential because of the scalability of the platform, providing room for improvements by developers.
- High demand in the cryptocurrency market is fuelled by the use cases for Ethereum and the overall demand for digital assets.
Ethereum short-term trading strategies such as scalping are a lucrative avenue for experienced day traders as well as active traders. However, overall, Ethereum is the perfect long-term investment from one year onwards.
Ethereum is considered ideal for long-term investment because of the leading position that it has in the programmable blockchain sector, institutional adoption and acceptance, future upgrades, and deflationary economics.
Is Ethereum Legit?
Yes, Ethereum is legit.
According to “isthiscoinascam,” Ethereum has a project safety score of 9.20/10 with a very strong rating. Other metrics that Ethereum scores on the following:
- Development – 10/10
- Sentiment – 7.2/10
- Community – 10/10
- Awareness – 7.57/10
- Credibility – 8/10
- Volume – 10/10
There are legitimate websites and project links provided to Ethereum as well as its team, and Ethereum is available across several socials including Coinmarketcap, Coingecko, YouTube, Twitter, Reddit, Facebook, Github, and several others.
However, even if Ethereum is legit, some individuals claim that Ethereum's code is a scam.
A developer from Sitecozy.com claimed that Ethereum is a scam based on Ethereum's development team implementing “Ice Age” in 2015, an algorithm that would artificially harden the difficulty of Ethereum miners, forcing miners to a new hard fork “Casper,” and by 2017, there was still no mention of Casper.
Predictions from this were that Casper was a scam and that because of increasing difficulty, Ethereum mining would freeze at some point. However, these claims never came true, and Ethereum mining continues in 2021 and will continue until Ethereum's blockchain transitions to a Proof of Stake consensus method.
Is Ethereum Supply limited?
No, Ethereum does not have a limited supply.
Unlike Bitcoin and several other altcoins, Ethereum's ETH does not have a limit or a cap. Instead, Ethereum's supply increases yearly. According to trusted sources, the Ethereum community cannot figure out what the total outstanding supply of ETH is.
Ethereum has a circulating supply of more than 117 million ETH, with no maximum supply compared to the following top cryptocurrencies with a max supply:
- Bitcoin (BTC) – 21,000,000 BTC
- Cardano (ADA) – 45,000,000,000 ADA
- Binance Coin (BNB) – 168,137,036 BNB
- XRP (XRP) – 100,000,000,000 XRP
No one knows what the total supply of Ethereum will be, but having an infinite number does not mean that there will be billions of Ether in the future. Ethereum is a coin with an unlimited supply that maintains its inflation rate very well. In addition, there are further plans to continue with slow and steady inflation.
Two main factors that ensure that Ethereum can control inflation relate to block time and block rewards. Ethereum relies on Ethereum Improvement Proposals (EIPs) to control inflation.
While many other cryptocurrencies that have unlimited supply can decrease in demand and popularity, Ethereum is likely to increase because of its unique blockchain and ecosystem involved with the creation of smart contracts, decentralized applications, and the developments in Decentralized Finance and NFTs.
Does Ethereum have a fixed supply?
No, Ethereum does not have a fixed supply.
- Fixed or maximum supply can be defined as the total number of coins that can ever be in circulation.
- Total Supply refers to the number of coins that have been mined, including the missing coins that are no longer in circulation or that have been lost.
- Circulating supply refers to the total number of coins that are in circulation.
Ethereum has a fixed issuance schedule, and for every block that is mined on the network, Ethereum issues two new coins into circulation. Regardless of the number of users, transactions, or the market price of ETH, the total supply is automatically programmed to increase gradually.
This fixed schedule means that if the demand for ETH outpaces its steady supply growth, it will not become inflationary, and therefore its value will not depreciate.
However, even though Ethereum does not have a fixed supply cap, it could have a fee-burning mechanism because of EIP 1559, which was implemented to make transaction fees more predictable for users.
There is currently a very strong relationship between a cryptocurrency's current value and its circulating supply. Many investors believe that purchasing a cryptocurrency with a fixed or limited supply is an effective way to profit from the future value.
This is because investing in crypto with a fixed supply will guarantee price urges as the supply diminishes because it pushes up the value. However, choosing crypto with a fixed supply does not guarantee profits.
While Ethereum does not currently have a fixed supply, the demand for ETH is exceptionally high because of the potential that the project has, especially in DeFi and NFT, amongst many others.
Is Ethereum the best Altcoin?
Yes, Ethereum is the best Altcoin and the second-largest cryptocurrency in the world.
Ethereum is the best Altcoin in terms of the following factors:
- Trackability – although some aspects of Ethereum can be traced because transactions are publicly available, it is difficult to pinpoint the original sender and receiver without a significant amount of effort.
- Hacking – The Ethereum blockchain has never been hacked, but smart contracts and wallets can be vulnerable to attack.
- Security – Ethereum is highly secure because of its decentralization and unique design.
- Transactions – Ethereum is not the fastest blockchain or network, but its transaction speed is still a few seconds, much faster than Bitcoin.
- Technology – Ethereum's unique technology is advanced, and it is the leading programmable blockchain that supports smart contracts, DApps, and it is a leader in DeFi and the NFT space.
- Price Change – From launch to date, Ethereum's price has increased by over 400,000%.
- Investing – Ethereum is a safe investment option and a lucrative investment over the long term with its increasing value, adoption, and popularity.
What is the difference between Ethereum Classic and Ethereum?
Ethereum is a fork of Ethereum Classic that reversed the effects of the DAO hack in 2016. Both Ethereum and Ethereum Classic are run by different teams.
Ethereum Classic (ETC) is the original Ethereum blockchain that is used to implement DApps and Smart Contracts. The Ethereum Classic blockchain is truly immutable and can never be altered.
Between Ethereum Classic and Ethereum, most crypto supporters favour Ethereum. Ethereum is the best platform between the two that allows for projects to be built that could revolutionize any industry in the world.
However, Ethereum Classic is forever stained because of the DAO attack. While Ethereum is growing and has a bright future, Ethereum Classic seems to be shrinking in market capitalization.
|Price change 20/21||+800%||+800%|
|Market Cap||$6 billion||$300 billion+|
|Past Hacks||DAO Attack||None on the blockchain|
|Popularity||Medium but diminishing||Very High|
What is the difference between Ethereum and Dogecoin?
Dogecoin is known as an investment option or a currency to buy goods and services. Dogecoin was created to make fun of Bitcoin, and it is based on an internet meme that features a Shiba Inu.
Ethereum, like Dogecoin and Bitcoin, is a digital currency that can be bought, sold, and spent as money, but that is where the similarities end.
Dogecoin is best used as a currency that pays or tips content creators, especially on platforms such as Reddit and Twitter. Ethereum is better as a massive network and platform where smart contracts can be run and where developers can build, publish, and deploy DApps.
Ethereum has a bright future in revolutionizing the way that industries work with the widespread adoption of DeFi, something that Dogecoin can never do. Dogecoin is not set to evolve past what it is currently used for.
|Price change 20/21||+9,900%||+800%|
|Market Cap||$27 billion+||$300 billion+|
|Past Hacks||Yes, wallets have been hacked||None on the blockchain|
|Popularity||Very High||Very High|
What is the difference between Ethereum and NEO?
Both NEO and Ethereum are blockchain projects that are designed to facilitate and host smart contracts, ICOs, and DApps in a decentralized manner. Both blockchains are fuelled by crypto assets, GAS in NEO and ETH in Ethereum.
Lastly, both projects are open-source, Turing complete, and they have large and supportive communities and development teams.
NEO and Ethereum differ in the following ways:
- Backers – NEO is backed by the Chinese government, and it was the first open-source, public blockchain project in China. Ethereum is supported by the EEA- Enterprise Ethereum Alliance.
- Consensus – NEO uses a delegated Byzantine Fault-Tolerant (dBFT), which is improved from Proof of Stake. Ethereum currently uses a Proof-of-work but is set to change to a Proof-of-Stake which will be more efficient.
- Divisibility – NEO's native crypto-fuel is not divisible and only exists in whole numbers. However, Ethereum is divisible, which is a significant advantage over NEO.
- Blockchain fuel – NEO produces NeoGAS or GAS, which is used to fuel the NEO blockchain. Ethereum or small units of Ether are used as “gas” on the network.
- Language – Smart Contracts and DApps on NEO can be written and compiled in C# and Java while Ethereum uses Solidity, with few people who know how to use it.
- Direction – NEO aims to make a smart economy by digitizing traditional assets through digital identity while running smart contracts and DApps on the ecosystem. Ethereum aims to become the only supercomputer in the world based on blockchain by hosting a wide range of applications of digital identity, computing, decentralized exchanges, and more.
- International audience – There is truly little about NEO for English-reading audiences, while Ethereum is already a globally recognized enterprise that caters for international audiences.
- Speed – NEO can handle up to 10,000 transactions per second, while Ethereum can only handle 15 per second. While NEO has the biggest advantage, Ethereum is consistently working on scalability upgrades.
- Quantum Computer-pro#49of – NEO is quantum computer-proof, while Ethereum and all other cryptocurrencies are not quantum computer-proof.
While NEO claims to be in direct competition with Ethereum, the project still has a very long way to go in terms of mainstream adoption, something that Ethereum already has, especially when considering its technology and use applications.
|Market Cap||$2.8 billion+||$300 billion+|
|Past Hacks||None||None on the blockchain|
What is the difference between Ethereum and NFTs?
Nonfungible tokens (NFTs) are digital assets such as video clips, digital art, game characters, and other assets that each have a unique value, with no two NFTs holding the same characteristics r value.
Ethereum is a fungible digital currency where one ETH has the same characteristics and value as another ETH.
Ethereum is best used as an open-sourced platform where smart contracts and DApps can be built and run, with NFTs considered a viable option for long-term investment.
Ethereum's market cap is over $300 billion, while the NFT market capitalization could rise to over $1 billion by the end of 2021. Ethereum can become increasingly popular through NFTs in addition to several other DApps along with Decentralized Finance.
What is the difference between Ethereum and Ripple?
XRP is primarily used as a utility token within the XRP ecosystem that cannot be mined or staked. There is 55 billion XRP that is locked up in a rolling 5-year escrow which releases a billion XRP per month, with unused and unsold coins returned to escrow, adding additional months at the end of the five years.
Ethereum is a utility token that is used to pay gas fees, the funding of ICOs, payment for different services, transaction fees for miners, and block rewards for miners. Unlike Ripple, Ethereum does not have a supply limit.
Ethereum is a platform used to build and run smart contracts and DApps. Ripple has a semi-permissioned blockchain because there are banks that form part of the Ripple Network to use its ledger. For this reason, transaction speeds with XRP are extremely fast, only taking four seconds for transactions to be verified.
In addition to this, XRP has very low transaction fees, making XRP the cheapest crypto where fees are concerned. Ethereum still faces issues with scalability, which means that between 15 and 20 transactions are done per second, much lower than Ripple.
However, Ethereum is working on scalability improvements. In addition, XRP coins cannot be mined while Ethereum can be mined because of the proof of work consensus method that Ethereum uses.
|Market Cap||+$46 billion||+$300 billion|
|Past Hacks||Coincheck hack, Ledger software hack, SEC lawsuit||None on the blockchain|
What is the difference between Ethereum and Litecoin?
Litecoin was created in 2011, and it is a result of a hard fork of the primary Bitcoin protocol. Litecoin was created to counter problems that Bitcoin has, including the slow transaction speed.
Ethereum is an open-sourced blockchain platform that has several systematic algorithm computations and where smart contracts and DApps can be built and run, providing for important uses in DeFi and several other global uses.
Some similarities between Litecoin and Ethereum are that both have a faster transaction speed than Bitcoin, both use Proof-of-Work to validate transactions, both can be traded on major crypto exchanges, and both support the use of smart contracts.
However, Litecoin and Ethereum differ in the following:
- Litecoin is seen as a mode of payment because it is seen as an alternative to Bitcoin. Ethereum is primarily viewed as the largest smart contract platform that is needed to develop DApps.
- Litecoin has lower transaction fees than Ethereum.
- Ethereum's block time is 15 seconds, while Litecoin is 2.5 minutes.
- Ethereum is best known for its long-term applications, while Litecoin's is short-term according to its capability to transfer value, store data, and develop features.
- Ethereum can be used for crowdsourcing funds for ICOs, while Litecoin cannot be used this way.
- Litecoin has a fixed supply, while Ethereum's supply is unlimited.
|Market Cap||$10 billion+||+$300 billion|
|Past Hacks||None||None on the blockchain|
What is the difference between Ethereum and Solana?
The similarities between Solana and Ethereum are that they are both open-source, decentralized, and public blockchain protocols that are both modular and highly programmable to serve a wide range of applications.
However, they differ in their performance and the overall scalability potential for both. Ethereum is the dominant leader in blockchain adoption, and there is the issue with decentralized finance and NFTs that are heavily entrenched with Ethereum integration.
While Ethereum has massive reach, it continues to lag in terms of speed because of limits to scaling ability. Ethereum suffers from network congestion and has slow processing time.
Solana, on the other hand, is designed to be a high-performing blockchain that can handle more computational power than Ethereum. Solana also has more room to scale infinitely without sacrificing security or decentralization.
Solana's innovative blockchain architecture can do this all without sharding or without needing to use Layer-2 solutions.
|Market Cap||$42 billion+||+$300 billion|
|Past Hacks||None, Mainnet Outage in September||None on the blockchain|
What is the difference between Ethereum and Cardano?
Both Ethereum and Cardano are cryptocurrency projects that have native tokens, ETH and ADA, with ADA considered a token, oriented specifically towards supporting and being used within the native ecosystem, which is exactly what ADA does.
Ethereum, on the other hand, is accepted as an actual currency. As a utility token, ADA is only useful within its network, which is a drawback that can keep it from gaining more popularity as a currency.
Another difference is how updates are implemented, with Ethereum deploying updates quickly. However, Cardano focuses on peer review, which means that it can often get stuck with formalizing smaller and less significant updates.
Both Ethereum and Cardano have blockchains that are compatible with smart contracts. However, there are different consensus mechanisms used by each blockchain.
Cardano uses a proof of stake, while Ethereum uses a proof of work. With plans in place to transition to a proof of stake consensus, which is eco-friendly, less susceptible to centralization, and allows higher scalability through sharding.
|Market Cap||$69 billion+||+$300 billion|
|Past Hacks||None||None on the blockchain|
|Popularity||Very High||Very High|