Ethereum is popularly known as the second-largest cryptocurrency in the world following Bitcoin. However, it is much more than that.
Ethereum is a blockchain network that allows other users and developers to use its network to host their applications. Ethereum’s programming language is known as Solidity.
What is Ethereum?
As a blockchain network, Ethereum is an open-source blockchain-based platform that is based on decentralized public ledger technology for the verification and recording of transactions. The users on the Ethereum network can create, publish, monetize and use the application on its platform. The payment mechanism is based on the ETH cryptocurrency.
The users of the network call the decentralized applications as ‘dApps’. The users have to pay ‘Gas’ to use the dApps. The ‘Gas’ is computed by taking into account the power required.
Ethereum, like any other blockchain, claims to be a network that cannot be hacked. Ether or ETH is the cryptocurrency that is used to complete transactions on the Ethereum blockchain network by its users.
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How does Ethereum work?
As mentioned, Ethereum is a blockchain network that can be used by other developers and users to host dApps. The users pay “Gas” for using the Ethereum blockchain network which is calculated by taking into account the computational power used.
As per the recent Ethereum Gas Report, the median fee for the gas used in early 2021 stood at $10.
The Ethereum blockchain network can record every transaction safely across its network of computers which is almost impossible to recreate or duplicate.
The decentralized network is the backbone of the Ethereum blockchain. It allows the users to transact with each other on its platform with anonymity. While the transactions that took place of buying and selling including the volume are publicly available in the ledger but the identity of the parties is encrypted.
Ethereum vs. Bitcoin: Which is better?
Unlike Bitcoin whose blockchain was created to support only one cryptocurrency i.e. the Bitcoin, the Ethereum blockchain was created with Ether as the in-house currency to support the other applications built on its platform.
Ethereum has bigger ambitions when it comes to coverage and possible use cases as it wants to cover all types of applications that can store information safely.
Keeping the tracks of the two cryptocurrencies that are distinctly apart, Ethereum and Bitcoin have emerged as the two most popular cryptos for investors across the globe.
What is ETH Trading?
ETH trading refers to the buying, selling, and exchanging the Ethereum cryptocurrency on any of the popular exchanges. Popular exchanges in India are CoinDCX, WazirX, Unocoin, Coinswitch Kuber, etc. Some of the popular global exchanges that can be used for ETH trading are Coinbase, Kraken, Binance, and Bitstamp.
Since the price of ETH is very volatile and can go up or down by 2% to 25% in a single day, many traders buy and sell ETH daily on these exchanges. Since Ethereum is the second-largest cryptocurrency in the world, there is considerable investor interest in Ethereum – both in the investor as well as in the developer community.
As per October 2021 data, there was around 118 million ether that existed in the world. Unlike Bitcoin, there is not a limit of 21 million that exists in mining Ether.
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Should you invest in Ethereum?
Any investment in Ethereum or any other crypto should be done with caution. Do not simply go by the past price growth. Look at what you are investing in and the risks involved.
Unlike the case with stock trading where you are buying a part of the business for your investment, cryptos are largely backed by nothing at all.
The price of crypto is only backed by the investor’s optimism that it will move up further and you will be able to sell your investment at a higher price to another investor.
Launched in July 2015, the price of ETH or Ethereum has grown from 0.66 in September 2015 to $4,500+ in November 2021.
With other coins like Ripple, Cardano, Polkadot, and Binance Coin, Ethereum is one of the most popular altcoins leading the pack.
