The Evolution of Ethereum: A Guide to One of the Most Popular Cryptocurrencies
Ethereum is one of the most interesting cryptocurrencies and a hugely popular one at that. Since it was launched in 2015, the Ethereum blockchain has gone on to become one of the most widely used cryptocurrency networks. Unlike other cryptos, it doesn’t just offer digital assets, it also provides a decentralized, open-source platform for others to create their own secure tokens.
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Over the years, Ethereum has developed and changed a lot, with a team behind it that is always looking for ways to improve the network. This has meant that the price of the coin has kept up with other major coins, and it’s now second behind only Bitcoin. You can view the ETH to USD calculator to see the up-to-date price.
What is Ethereum?
Cryptocurrencies like Bitcoin and Ethereum were founded on blockchain technology, which allows them to be decentralized and gives users a way to send and receive funds without the use of a bank. Rather than just offering a way to transfer money online, Ethereum was created to make full use of blockchain.
While you can still use Ethereum to pay for things, the real beauty of the network. That it can be used to create decentralized applications (dApps) and smart contracts. This increases the usability and versatility of Ethereum, making it far more than just a digital token. The functionality of the Ethereum network has helped to increase the popularity of the coin and, therefore, its price.
Investing in Ethereum has become hugely popular. Just like Bitcoin, the price has increased significantly over the past few years. While the crypto market remains volatile and crashes happen frequently, the serious gains some investors have made make it an attractive prospect. However, before you invest, you should always do your research.
How Smart Contracts Work
Smart contracts are programs stored on the blockchain that are designed to run when predetermined conditions are met. A simple example would be creating a contract that automatically moves your Ethereum to another address once it reaches a certain price.
Essentially, the smart contract means that a contract can be executed automatically, with no need for any intermediaries or third parties. When it comes to creating financial contracts, a high level of trust is needed. For online transactions, there’s often less trust because you don’t know if the person you’re interacting with is reputable. The smart contract eliminates this need for trust, ensuring that the money is sent without any issues.
dApps often feature smart contracts, making them more accessible to the average person. For example, a freelancer could enter into a smart contract with their employer. Once the work is complete, the contract executes, and the money is paid out automatically, with no need for escrow services.
The Future of Ethereum
The development team behind Ethereum regularly announces upgrades that help improve its scalability, efficiency, and functionality. In recent years, the network has moved from the classic proof of work to proof of stake model. This means that transactions are no longer validated by a conventional mining process as with Bitcoin. Instead, validators operate nodes by staking a certain amount of Ether and gain rewards for doing so. Incorrectly validating transactions destroys their staked Ether, which incentivizes accurate reporting and ensures transaction data is always correct.
Changing to proof of stake dropped the energy usage of the Ethereum network by an incredible 99%. In a world where concerns about climate change are growing, it’s important that cryptocurrency is sustainable. Meanwhile, it’s also helped to improve the overall security of the blockchain, making it safer to use.
It’s hard to say what the future will hold for Ethereum, particularly in relation to its price. However, the network still needs more work in relation to its scalability. As network congestion and fees have never been higher.
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