Ethereum Price

What Is Ethereum?

Many people use the terms “Ethereum” and “Ether” interchangeably, but the two words don’t actually refer to the same thing. While Ether (ETH) is a cryptocurrency like Bitcoin, Dogecoin or Litecoin, Ethereum is the blockchain system on which Ether runs. Ethereum's network offers multiple use cases, such as fund transfers, peer-to-peer lending and the ability to invest in real estate. Ether is crucial to the Ethereum network, as it helps to facilitate all of its transactions.

The Ethereum network can be used to store data safely. Developers can take advantage of the crypto’s open-source platform to build decentralized applications (DApps), earning Ethereum the nickname “world computer.” Investors haven’t been left out either — ETH has experienced a dramatic price surge in recent years, making it a favorite among cryptocurrency enthusiasts and those looking to get in on the crypto scene.

Who Is the Founder of Ethereum?

Vitalik Buterin is the founder of Ethereum. The Russian-Canadian programmer developed the second-largest cryptocurrency in 2015, when he was only 19. His interest in decentralized payment systems started in 2011, when he co-founded Bitcoin Magazine, an online space for sharing cryptocurrency articles with the world.

The idea of the Ethereum ecosystem was inspired by Bitcoin technology. Buterin wanted to come up with something much better than Bitcoin — a digital currency that could serve as more than a payment method. He released a white paper in 2014, telling the world about an “open-ended platform for hosting decentralized applications.” Thousands of developers supported his idea, and that same year he started creating the Ethereum ecosystem after winning the Thiel Fellowship grant worth $100,000.

Ethereum was officially launched on July 30, 2015. The first trade took place on Aug. 7, 2015, at a price of $2.77 per ETH. Ether’s price hit an all-time high of $4,891.70 on Nov. 16, 2021.

What Is ETH Used For?

Power and Sustain the Ethereum Network

Ether (or ETH), the coin held and exchanged on Ethereum’s network, is the lifeblood of Ethereum, without which the latter cannot function. To run or use applications on Ethereum’s platform, a form of payment is required. While there are many cryptocurrencies on the blockchain network, such as BAT and BNT, ETH serves as Ethereum’s main medium of transaction.

Mining

Every time you perform an activity on Ethereum’s network, a miner verifies that what you’re doing is legitimate. Miners are paid a small amount of ETH whenever they complete a set of verifications. ETH mining can be likened to a data recording process, one which is necessary for keeping Ethereum secure and decentralized.

As a Form of Payment

Many merchants across the world, such as Amazon, Travala and Overstock, accept ETH as payment for their goods and services … and the list is expected to grow.

How Does Ethereum Work?

Ethereum has a blockchain structure similar to that of Bitcoin. Unlike Bitcoin, however, it’s open-ended. Ethereum is a programmable platform that supports cryptocurrencies and applications. Developers can create software and implement it autocratically through smart contracts. Traditional contracts predefine conditions of engagement, and the role of smart contracts is to ensure these requirements are written in code format and fulfilled. Transactions automatically execute when the specified terms are met, eliminating delays and reducing costs associated with manual execution.

Example Let’s say a user creates a smart contract to send $500 worth of ETH to a family member on the 15th of every month. They code these instructions into Ethereum’s blockchain, and Ether will be released to the receiving account each month as specified — as long as the terms of the contract are fulfilled.

What Is Ethereum Used For?

1. Decentralized Finance

Ethereum is an avenue to steer clear from any external form of control (e.g., governmental oversight) over money transactions and movement of other assets.

2. Creation of DApps

Ethereum enables developers to create unrestricted apps, such as games and social media/investment platforms.

3. Non-fungible Tokens (NFTs)

Artists can directly sell their NFT works using smart contracts and Ethereum-powered tokens.

Why Is ETH Valuable?

Anyone looking to invest in ETH might be interested to know where it derives its value. Like Bitcoin, ETH’s value is pegged to its position as a currency. Unlike Bitcoin, however, Ether has a wider value proposition. Gas fees, NFTs, loan processing and the ability to be staked for interest play a major role in buffing up the value of ETH.

Furthermore, the promise for Ethereum 2.0 has conjured interest from institutional traders who have invested in the coin, giving it a strong speculative value. Ethereum 2.0 is a major improvement on the blockchain’s network, and while it isn’t the first upgrade that’s been made (or expected to be made), it’s nevertheless significant because it’s expected to catapult Ethereum to a total value locked (TVL) balloon.

What Makes Ethereum Unique?

Ethereum draws its fundamental concept from Bitcoin. Both are digital currencies designed to eliminate external control on transactions, and both use a public ledger to decentralize their network. What, then, differentiates Ethereum from Bitcoin and other crypto projects? The answer lies in the blockchain technology it uses.

Blockchain Technology

The basic idea of Bitcoin blockchain technology is a collection of user-funded accounts or cryptocurrency wallets. Building on its predecessor, the Ethereum network features a sophisticated blockchain structure that stores computer codes. Buterin expanded Bitcoin’s vision of an independent payment system to create a network of global computers that give its users access to DApps.

The issue of government censorship and information control is more severe than any of us may imagine. Popular apps, social media platforms, and even email service providers reserve the right to keep, delete or modify data as they wish. The worst part? They’re becoming more sneaky about it, hiding information between fine lines in the terms and conditions (T&Cs.)

As long as Ethereum is running, information that it stores can be shared with anyone within its network, without intervention from any central authority — including applications running on the network. Ethereum’s blockchain is powered by ETH and enables programmers to develop new ETH token variations for powering DApps via smart contracts.

Most ETH-based virtual coins run on the ERC20 primary token. This technology adds value across industries by providing fresh ideas for solving long-standing problems of security, efficiency and user control. Harnessing the power of DApps, Ethereum is useful in industries such as finance, gaming and supply chain management.