Ethereum is currently the second most popular and second most expensive cryptocurrency to date. With unique tech, qualities and features it looks to be the cryptocurrency that can be used as the number one cryptocurrency.
Blockchain Technology
Before we get into what Ethereum is we must first look at the technology ETH and other cryptocurrencies are based on. Essentially blockchain technology is a shared digital ledger that’s impossible to alter. Blockchain is a decentralised, immutable database that makes it easier to track resources and transaction data in a corporate network.
An asset may be physical (such as a home, car, money, or territory) or intangible (intellectual property, patents, copyrights, branding). Virtually everything of value may be tracked and exchanged on a blockchain network, lowering risks and lowering expenses for those involved.
The Importance Of Blockchain?
Information is essential to business. It is best delivered quickly and also precisely. Blockchain is the best technology for distributing that data since it offers real-time, shareable, and entirely transparent data that is kept on an immutable ledger and accessible exclusively to members of a permissioned blockchain network if you wish.
Among that blockchain technologies can be used to trace orders, transactions, and accounts and even track manufacturing.
What Is Ethereum?
Now that we have a brief understanding of blockchain we can start to talk about cryptocurrencies. Like Bitcoin, Ethereum offers an open-source decentralised network. Essentially both work on a blockchain technology basis. To fully understand Ethereum we must also state the difference between Ether and Ethereum.
Ether is the coin that powers Ethereum, a decentralised computer network which runs apps. We will use these terms precisely throughout the article and it’s important to differentiate them even though they are technically Ethereum technology.
The EVM in short for Ethereum Virtual Machine handles developing and executing smart contracts in a decentralised context (sometimes termed decentralised apps) (DApps).
What are DApps?
Essentially Dapps are apps that run on a decentralised network as opposed to the most popular form which runs on a centralised network with a central point.
Back to Ethereum.
EVM DApps eliminate the central point since it runs on decentralised technology. Ethereum grabs the code and all the assets/management of the application and distributes it across the whole EVM network
The cost of building a network system the size of EVM is expensive, which is why the Ether coin was created. To power the EVM, Ethereum’s Ether currency may be turned into gas. This is when things get a little complicated. In the same way that kilowatt hours are a metric of spending rather than a real unit of electricity, gas is a means to describe how much labour the EVM is doing.
Anyone utilising the EVM must pay an Ether fee to make changes to the Ethereum blockchain in exactly the same manner where a kWh is charged on your energy bill.
That means that even when you buy ethereum uk you will lose out a little on gas fees once you move them to your desired wallet.
Similarly to the price of a kWh, the price of gas may be regulated so that EVM running expenses do not become excessively expensive or so low that the networks are overrun with trash transactions.
So Who Receives These Gas Fees?
Miners who execute modifications to the blockchain are rewarded with Ether in the same manner that Bitcoin fees are rewarded. There’s a catch, however, In the case of some kind of transaction, said buyer can decide how much Ethereum they are willing to place in the deal. The larger the commitment, the higher the incentives and the quicker the process will be performed.
DApp developers and users alike must pay attention to the Ether2Gas ratio while making changes to a DApp. Forget about slashing your Ether (and hence gas) budget, because the transactions may never be completed, if it doesn’t get processed at all, you’ll still be out the funds you put up in the first place.
In a nutshell, Ethereum is a blockchain-based decentralised virtual computer. Since individuals or programmers may only make DApp improvements with the help of other Ethereum users, Ether is used to cover the operational costs of decentralised apps.
What Can Ethereum Be Useful For?
The Ethereum Project defines smart contracts as “apps that execute precisely as planned without any risk of delay, censoring, fraudulent or 3rd interference.”. This does not mean that Ethereum can only be used for transaction-based applications such as identity verification or e-commerce.
The EVM network, although great for smart contracts, has a number of other uses. The EVM network is used for crypto games, social networks, job markets, document notarization and so much more.
You can also trade Ether just like any other cryptocurrency and even exchange it for a fiat currency. For the most part, Ether will be used to operate on several DApps found on the Ethereum network.
Bring On The NFTs
Non-fungible tokens are also known as NFTs. These are one of the latest technologies to enter the Ethereum network, as of early 2021 a fresh purpose for cryptocurrencies and blockchains entered the blockchain space.
What are NFTs?
Non-fungible tokens are the ownership of digital goods. These can be anything such as the first tweet on Twitter, digital art, music, memes etc… currently many are paying absurd prices on digital collections similar to how one would collect art but in the digital space.
At the current moment, NFTs are still in their infancy with several cool opportunities and technologies yet to evolve around the NFT space, especially in terms of music.
Ethereum has become the original mecca for NFTs and it’s mostly due to its ERC-721 NFT token standard. This is practically a set of terms and conditions in order to establish smart contracts in the Ethereum space.
The ERC-721 also has the ability to attach data to said NFT, in other words the person minting the NFT may attach data to that specific NFT. This also allows users to track the owner and transactional history of the NFT on the Ethereum network.
The Problem?
Just like owning an original rare painting, they’re maybe thousands if not millions of copies around the globe which you have no control over, especially in terms of sales. That being said the NFT thankfully will have a digital signature to prove authenticity, unlike the fakes.
