What exactly is the Ethereum (ETH)? This is a very important question for investments in digital money, crypto or otherwise.
Perhaps you’ve been asking this question because you’ve heard the name of the second most popular digital currency in the world, or like many interested investors, you’re wondering how Ethereum increased its price from $ 44 to $ 1000 in a year.
Ethereum is an organization that started to make premiums at the beginning of 2017. At the end of last year, the value increased by more than 2000 percent. For some, this is the only thing that matters.
These are the people who see Ethereum as just one of their digital currencies. But Ethereum promises more than that.
In this article you’ll find out what makes Ethereum unique, what its founder, ICO (coin public offering), and what can make a digital currency a valuable investment.
Considering that nearly 2,000 crypto currencies are on the market, it will be important to know what makes Ethereum stand out in addition to being just a digital currency.
What is Ethereum?
Simply put, Ethereum is a decentralized platform that allows developers to develop decentralized applications (DApps).
A DApp developed on the Ethereum network does not require an agent to run. It does this blockchain and reduces resources by reducing resources.
At this point, let’s add that people can also develop something in the Bitcoin block chain. But the Ethereum block chain has a significant advantage over Bitcoin.
Ethereum platform has a feature called smart contracts.
A smart contract is a group of parameters within the code. These parameters must be met for an operation to take place. Smart contract ensures that a transaction is safe for both parties. Because money will only move when parameters are met.
Basically, if a person does not fulfill the requirements on his side of the agreement, the money will remain in the smart contract and be returned to the original sender.
Let’s give a simple example for a better understanding. For example, you want to send money to a friend traveling internationally, but you want to do so if the amount of money in your friend’s bank account falls below a certain amount. If a smart contract showing these parameters is placed in the code, the money you want to send will only be sent to your friend if these conditions are met.
This feature makes smart contracts an invaluable tool for dozens of industries, from finance to health care. Financial companies, such as Bank of America, can use such technologies to ensure that mortgage payments and other loans are repaid. The real estate sector can use this technology for title deed transfers and allow a house deed to change hands only if the demands of both parties are met.
Smart contracts can be used in a wide range of fields, and some of them are already in the digital money market.
The Ethereum platform allows the applications developed on it to be protected from the drawbacks of fraud, censorship and third party involvement.
The Ethereum platform has a local currency that acts as a “gas için for transactions on the network. This native currency is called “ether ve and that is what investors actually buy. You don’t have to worry too much about names, because Ethereum and Ether are used interchangeably by most media outlets.
What is Ether?
Ether is the digital currency unique to the Ethereum network. Although it is very effective in this task, it is not intended to act as a digital currency.
When we write this article, Ether takes two minutes. This is very fast compared to Bitcoin’s 10-minute processing time.
Ether was created for use as fuel for DAppler developed in the Ethereum network.
This can be complicated for people who are not familiar with the ways in which digital assets function within specified frameworks. Basically, you might think: Every transaction that takes place on the network requires Ether to take place.
Ether is in a way the fuel of this system. Ether charges are also calculated based on the amount of Etherin requested by a transaction.
Therefore Ether, like Bitcoin, is not limited. While there may be only 21 million Bitcoins, there is no such limit for Ether.
Ether is therefore not seen as a digital gold or value storage tool like Bitcoin.
To sum up, Ether is both a currency and a fuel for the Dapps.
Ethereum’s Mining Process and PoS
At the time of writing, Ethereum still uses the process verification method called Proof of Work (PoW).
Ethereum founder Vitalik Buterin has already said he wants to switch from the PoW to the Proof of Stake (PoS).
PoS consumes much less energy and takes miners out of the equation. Instead of miners, operations on the network will be approved by a group of verifiers. Each validator must hold a certain amount of Ether for participation in the network. (Buterine suggested that the total could be about 1000 Ether). The Verifier should then devote a share of the Ether to this. The more Ether a person allocates for this business, the more money he earns without verifying the transaction.
Verifiers earn money for transaction approvals and may be penalized for their bad and harmful behavior. If a verifier does something dishonest or counterfeits a transaction, he may lose all of his Ether. For example, the network continues through distributed compromise.
The PoS model will remove miners from the equation and contribute to Ethereum’s functioning within a global economy. As it is known, miners occupy a big place in the Bitcoin network and play an important role as a decision maker in such a controversial SegWit2x decision.
PoS will also transform the Ethereum into a sustainable digital currency. In the current situation, mining the digital coins with the PoW method causes energy consumption equivalent to Iceland’s electricity consumption, which raises questions about the sustainability of the PoW model.
Ethereum has targets that are being tried and implemented for the transition to PoS by the end of 2018, but it is unclear whether this temporal target can be achieved.
PoS will cross the Ethereum network with a hard fork called Casper…
Who Founded Ethereum?
Ethereum was developed by Vitalik Buterin, a 19-year-old web developer and Bitcoin enthusiast from Toronto, Canada.
Buterin has been an active member of the Bitcoin community since 2011. His father introduced him to Bitcoin when he was 17 years old. Vitalik then worked for this pioneering digital currency before establishing Bitcoin Magazine in 2012.
As a developer, Buterin faced the challenges of coding on the Bitcoin network, and in 2013 he came up with the Ethereum proposal to address these issues.
Buterin, Dr. Ethereum shortly after the proposal. He went into a business partnership with Gavin Wood and went into the process of turning this idea into a reality. Wood became co-founder of Ethereum and remained on the team until 2016. He then made several blockchain-based initiatives, including ConsenSys.
In 2014, ICO (coin public offering) and Ethereum’s tokens, Ether, were distributed and Ether, worth more than $ 60 million, was distributed. The team earned 31,000 Bitcoins from this distribution.
After ICO, the Ethereum team focused on the marketing and development of its products.
But 2016 was going to be one of the most rocking processes for the Ethereum.
Ethereum and DAO
In 2016, the team of 7 Ethereum led by Vitalik Buterin decided to hard-code the Ethereum code.
This decision was made after a cyber attack that took over a significant portion of Ethereum investor funds. At that time the Ethereum network was the backbone of the ambitious project called Decentralized Autonomous Organization (DAO).
The objective of the DAO was simple: to build a decentralized venture capital platform that eliminates the need for brokerage firms and venture capital companies and empowers the individual to invest through smart contracts…
Then DAO was hacked. On June 17th, hackers seized a significant amount of investor funds.
Long story short, the Ethereum team decided that it would be best to follow the hard fork path in order to restore the investor funds to the group led by Vitalik.
Although it was a necessary solution, the Ethereum community opposed it. The Ethereum was forked into 2 separate tokens and the modified token became the popular Ethereum today.
The other fork was called Ethereum Classic (ETC). Having succeeded in having a loyal followers group after the Fork decision, ETC was supported by those who argued that Ethereum’s original mission should not be to change the decentralized platform code under any circumstances.
The Ethereum fork, which has been changed today, constitutes the Ethereum, which has received support and attention from the media and the masses.
In March 2017, the Enterprise Ethereum Alliance (EEA) was founded to develop and improve the Ethereum block chain. This association continues to grow continuously and more and more companies are applying for membership.
The association has more than 150 members at the time of writing, including:
Thomson Reuters Corporation
The Indian government
Toyota Research Institute (TRI)
National Bank of Canada
In addition to corporate support, Etherum has managed to create a large investor base and Ethereum has become the project that most closely approaches Bitcoin’s huge market volume.
In the context of development, many blockchain-based companies use the Ethereum network.
Some of the digital money projects on the market that use the Ethereum network are Gnosis, Populous, Storj, Bancor and Golem.
In the coming year, Etherum will undergo many changes, which are expected to have a number of positive effects on the system’s function and to further accelerate Ethereum’s institutional adoption.
How to Buy Ethereum?
Ethereum, which is one of the most popular digital currencies after Bitcoin in the market, can be bought and sold in many crypto currencies such as Binance, Gemini, Bittrex, Poloniex and Cex.io, which operate worldwide.
btcturk operating in Turkey, Bitlo, DPARA and Pariba the Etherea is possible to buy and sell through in my crypto currency exchanges.
Ethereum official software wallets can be created and stored, or stored securely through supported hardware wallets.