Basic Understanding of Ethereum and Its Currency Ether
What is Ethereum?
Ethereum is a public open resource blockchain based distributed computing platform launched in 2015. Ethereum was created as a hard fork from bitcoin based on the proposal by Vitalik Buterin, a co-founder of Bitcoin Magazine. Ethereum allows developers to build and operate Smart Contracts and decentralized applications. Ethereum provides a decentralized virtual machine, the Ethereum Virtual Machine (EVM), which can use an international public node network to execute scripts.
Ether is an open-source digital currency developed by the Ethereum platform. It is the fuel used to power the Ethereum blockchain network. Ether acts as a reward to mining nodes or the only form of payment for the network participants to execute their requested operations on the Ethereum network.
In 2016, the DAO project's smart contract software was attacked by malicious actors and more than $ 50 million were stolen. Thus, Ethereum was divided into two separate blockchains, Ethereum (ETH) and Ethereum Classic (ETC), which is the continuation of the original chain. Currently, the value of the Ethereum is slightly above the US $200. Many Ethereum supporters expect Ethereum value to more than double, to $1488.
|Bitcoin||$6 345||$3 410 520||+0.4%|
|Ethereum||$435.65||$1 418 630 000||+1.3%|
|Dash||$229.19||$153 088 000||-0.9%|
|Litecoin||$80.53||$283 573 000||+2.2%|
|Monero||$127.35||$41 956 900||+3.75%|
How Does Ethereum Work?
Different from Bitcoin, which is just a currency, Ethereum is the ledger technology that various companies use to build new programs. Although both Bitcoin and Ethereum operate on blockchain technology, Ethereum is much more functional and powerful. Based on blockchain technology, Ethereum aims to replace internet third parties and build a globally decentralized digital computer for executing peer-to-peer contracts. Running each contract requires transaction fees paid in Ether, and the fees depend on the amount of computational power required. Many people believe that Ethereum may surpass Bitcoin as the dominant coin in the market. Ethereum is made up of multiple languages including C, Python, Ruby, Go, and Java.
In the system, users need to use public and private keys, or addresses, to verify the identification of Ethereum transactions in cryptocurrency wallets. A public key is used as an address sending to others so that they know where to send your money. A private key is a protected secret number that allows a user to access his/her Cryptocurrency and transmit Ether.
Why Do People Trade Ethereum?
As a popular cryptocurrency in the Crypto market, Ether is a good option for investment or trading among investors and traders. As more and more global exchanges and their assets are added to their products, Ethereum's trading volume has achieved strong growth.
The high volatility of Ethereum attracts many day traders seeking to make profits from its fluctuations in the past few years. However, it is also seen as a long term investment instrument that will show huge gains in the future. The principle of trading Esther is the same as other financial instruments, buy low and sell high.
Cons - Risks of Ethereum
Because Ethereum is a decentralized platform, and its currency Ether is not government-issued, it is not operated by a single entity and nobody controls it. Because of this, many countries seek to regulate, restrict, or prohibit the use of Ethereum or its payment.
Because Ether transactions are digital, they easily become targets of hackers. If a hacker steals the private key of the bitcoin holder from a bitcoin wallet, he can transfer the stolen bitcoin to another account. Also, potential long-term security flaws of Ethereum Smart Contracts, such as poor coding that contains bugs, increase the risk of hacking and scam.
Ether price is highly volatile in the cryptocurrency market, and its quarterly high trading price is US $335 in June 2019.