Scope Of Ethereum In [year]: Ethereum is designed to be scalable, programmable, secure, and decentralized. It is the blockchain of choice for developers and enterprises creating technology based upon it to change how many industries operate and how we go about our daily lives.
When Bitcoin was launched in 2009, it caught the interest of many people. One of which was Vitalik Buterin, a programmer who later co-founded Ethereum, with its crowdfunding in 2014. This article takes a detailed look at Ethereum, its use cases, how to buy, and why you should opt for OriginStamp.
What Is Ethereum?
Ethereum is a decentralized, open-source blockchain platform that enables the creation of smart contracts and decentralized applications (DApps). It was launched in 2015 by Vitalik Buterin and has since grown to become the second-largest cryptocurrency by market capitalization, behind only Bitcoin.
One of the key differences between Ethereum and Bitcoin is that while Bitcoin’s primary purpose is to serve as a digital store of value and medium of exchange, Ethereum was designed to be a platform for building decentralized applications. This allows for various use cases beyond digital currency, such as supply chain management, voting systems, etc.
Who created Ethereum?
Scope Of Ethereum In [year]: In 2013, a 19-year-old computer programmer named Vitalik Buterin released a whitepaper proposing a highly flexible blockchain that could support virtually any kind of transaction. In 2014, Vitalik, along with a team of cofounders including Gavin Wood, crowdfunded the development of the Ethereum protocol with the sale of $18 million in pre-launch tokens. In 2015, the first public version of the Ethereum blockchain launched in July, and smart contract functionality began to roll out on the Ethereum blockchain.
Why does the price of Ethereum fluctuate?
Like Bitcoin, Ethereum’s price is based on a global marketplace of supply and demand. Its price can be volatile in the short term as demand overwhelms supply and vice versa.
How does Ethereum work?
Scope Of Ethereum In [year]: Ethereum-based apps are built using its key innovation: “smart contracts.” Smart contracts, like regular paper contracts, establish the terms of an arrangement between parties. But unlike an old-fashioned contract, smart contracts automatically execute when the terms are met without the need for either participating party to know who is on the other side of the deal — and without the need for any kind of intermediary.
Ethereum is not controlled by any third party or entity. Instead, they are controlled by codes. Several pieces come together to ensure that Ethereum is functioning accordingly.
Scope Of Ethereum In [year]: The whole point of Ethereum having a system not controlled by a third party but by codes is induced by smart contracts. Smart contracts are automatically executed when certain stated conditions are met without the help of any external body. Smart contracts are involved in any cryptocurrency. They are not restricted to and can be used outside Ethereum, but they are popularly known for their Ethereum usage. Bitcoin also supports basic smart contracts, but its applications are limited when compared to Ethereum’s. Some developers and researchers have criticized smart contracts that would open up possibilities for security vulnerabilities.
Scope Of Ethereum In [year]: This is where the history of all the smart contracts executed is stored. Hundreds of nodes from all over the world store a copy of the entire blockchain. Thousands of computers process a smart contract whenever it is executed to ensure that all the stated rules were adhered to. The nodes do not only store transaction details. Also stored in a node are accounts, smart contract code, and smart contract state. All the nodes follow the same rule set for verifying a transaction, and they are all connected.
Ethereum Virtual Machine (EVM)
The Ethereum virtual machine executes smart contracts. It helps translate the smart contract written in a language computer that can’t read to a language (bytecode) that they can read. The EVM can execute at least 140 different codes with specific tasks.
As already stated, Ether is Ethereum’s native cryptocurrency. Ether is stored in accounts, and there are two types of accounts. Externally owned accounts are used to hold and send Ether by users, and Contract accounts are the accounts that hold smart contracts.
When a block of a transaction is created, miners, in an attempt to get the correct value of the block, generate values until they get it. A hash value is then sent across the network for the nodes to verify when the miner finds it. If it is validated, the miner receives the Ether it unlocked when it discovered the hash. There is, however, a plan to switch to a new algorithm called proof-of-stake, which is tipped to consume less computing power and electricity than proof-of-work.
How to make use of Ethereum?
Scope Of Ethereum In [year]: Blockchain is decentralized because its public ledger is not stored in a single place. The public ledger is stored on thousands of volunteers’ computers around the globe, each of which is called a node. The verification of the data stored on the blockchain involves more than half of the nodes before being certified as correct. Cryptography is used to keep transactions on the blockchain network secure and to verify them also.
Computers are used to solve complex mathematical equations that help to confirm transactions on the network and input new blocks to the chain. Ether, just like any other cryptocurrency, can be used in financial transactions as a digital currency. Ether also serves as a medium through which users can carry out any task on Ethereum.
Ethereum aims to provide a system that gives users more control over their data, and it also allows for applications to be built and run on the blockchain. To run these applications and have this level of control on the Ethereum platform, requires Ether. The more the number of people making use of the platform, the higher the fees.
How to store Ether?
To store Ether, a user requires an Ethereum wallet. Most of these wallets are digital and can be accessed via a laptop or smartphone. The Ethereum wallet stores the private key of the user.
If a user loses their private key, they have lost their Ether, and there is nothing such as a help desk or customer care to contact to recover their private key.
There are various types of wallets.
These are electronic devices such as USB sticks that can be used to sign and send ether transactions without being online. They are detached from the internet, and they provide a higher level of security. It is not easy to hack, and it is most suitable to store a large amount of Ether. On the downside, hardware wallets can get lost just like any other key.
Desktop and Mobile wallets
Desktop wallets are wallets that run on a laptop or a PC, while Mobile wallets run on a smartphone. These wallets can be either custodial or non-custodial. Custodial wallets depend on third parties to keep a user’s private key safe. This, however, has its risks as these third parties can be hacked. Non-custodial wallets do not depend on third parties to safeguard their private keys. They are kept safe by the user.
This option involves printing or writing down the private key on a slip of paper and keeping it safe somewhere. It is the most old-fashioned method of storage. The only thing about this is that you must remember where it is kept.
These are the least safe method of storage which involves storing private keys online.
A wallet connected to the internet is called hot storage, while a wallet that is not connected to the internet is called cold storage. It is advisable to combine both cold and hot storage wallets to get maximum security.
How to buy Ether?
There are different ways to buy Ether.
Online Exchange platforms
This is usually the easiest method of buying cryptocurrencies. It involves a platform that buys and sells Ether for a fee. You can buy Ether from these platforms with fiat currency (dollar, Euro, pounds) with a bank transfer or a debit or credit card. The platforms conform to the Know-Your-Customer (KYC) laws, which means a user’s identity must be confirmed before the user can make transactions on the platform. An example of such a platform is Coinbase.
These platforms connect sellers and buyers via an intermediary, and they can also trade a cryptocurrency for another one.
This method involves the buyer contacting the seller directly and negotiating prices. There is no middleman involved in this process, and there are no fees paid. There are some cities such as Toronto and New York that have Ethereum meetups frequently. There are also sites such as LocalCryptos that help connect users who want to trade Ether peer-to-peer methods.
A brief history of Ethereum
A 19-year-old computer programmer (and Bitcoin Magazine cofounder) named Vitalik Buterin releases a whitepaper proposing a highly flexible blockchain that could support virtually any kind of transaction.
The Toronto-based teenager, along with a team of cofounders including Gavin Wood, crowdfunds the development of the Ethereum protocol with the sale of $18 million in pre-launch tokens.
The first public version of the Ethereum blockchain launches in July. Smart contract functionality begins to roll out on the Ethereum blockchain.
Hackers steal around $50 million from a smart-contract-powered venture fund called the DAO by exploiting a software bug. In a divisive vote, Ethereum’s community chooses to revise the protocol in a way that would restore the lost funds. This results in the Ethereum blockchain branching off into two separate blockchains, each with its own active community: Ethereum and Ethereum Classic.
The ERC-20 standard is created, making it easier for developers to build compatible applications. ERC-20 defines a way to create an asset on top of the Ethereum blockchain. The first widely popular Ethereum-based app arrives in the form of a game called CryptoKitties, in which users collect and trade digital cats. It becomes a genuine craze; at its peak, rare digital cats sell for upwards of $200,000.
The nonprofit Ethereum Enterprise Alliance launches to develop practical applications for smart contract technology. Members include JP Morgan, Samsung, Microsoft, and Mastercard. MakerDAO — the first Decentralized finance protocol on the Ethereum blockchain — launches. Maker also introduces the first ETH-based stablecoin, DAI. ETH breaks $100 USD for the first time.
DeFi, which aims to transform the financial services industry by making transactions faster, cheaper, and more secure, gains momentum with the arrival of the lending protocol Compound and decentralized exchange Uniswap.
The USDC stablecoin is launched. Backed by the CENTRE Consortium, a partnership between Coinbase and Circle, it reaches $1 billion in issued coins in the first year. ETH breaks $1,000 USD for the first time in January, before falling back under $100.
Prices calmed for about two years, and ETH fluctuated between $150 and $730.
The Ethereum 2.0 upgrade begins in December. The complete transition from Ethereum 1.0 to Ethereum 2.0 is scheduled to take around two years to complete. As part of Ethereum 2.0’s first phase, Proof of Stake is introduced. ETH 1.0 continues to use Proof of Work as its consensus mechanism.
ETH hits a new all-time high above $1,700 in February
Ethereum’s value decreased in 2022 to US$ 1,781, but most experts predict that the price will rebound in the future.
Having analyzed Ethereum prices, cryptocurrency experts expect that the ETH rate might reach a maximum of $2,257.36 in July 2023. It might, however, drop to $1,908.17. For July 2023, the forecasted average of Ethereum is nearly $1,972.34.
How does Ethereum have value?
Scope Of Ethereum In [year]: There are a few ways of thinking about the answer to this question. On one level, Ethereum’s value is set by markets like any other asset. People buy it with Bitcoin, dollars, euros, yen, and other currencies 24 hours a day. Depending on demand, the price can fluctuate from day to day. Ethereum’s value tends to be volatile compared to currencies such as the US dollar or equities like Fortune 500 stocks because it is still an emerging technology.
But why the market prices it the way it does is a much more complicated question. To many investors, Ethereum’s value is based on its flexibility as a platform for issuing stablecoins and running DeFi applications — resulting in a growing user base and growing transaction fees.
What’s next for Ethereum and the Scope Of Ethereum In [year]?
As of early 2021, Ethereum is host to the vast majority of blockchain applications and has a market cap of just under $200 billion, with over $55 billion locked into tokens on the blockchain. Popular stablecoins such as USDC and USDT mostly live on Ethereum today due to their network effects.
But a variety of new smart contract blockchains are beginning to compete in the space. So while Ethereum is the dominant market leader today, there is growing pressure for it to successfully execute the transition to Ethereum 2.0.
Key Factors of Ethereum
- Ethereum is a blockchain-based platform best known for its cryptocurrency, ether (ETH).
- The blockchain technology that powers Ethereum enables secure digital ledgers to be publicly created and maintained.
- Bitcoin and Ethereum have many similarities but different long-term visions and limitations.
- Ethereum changed from proof of work to proof of stake in September 2022.
- Ethereum is the foundation for many emerging technological advances based on blockchain.
Check Also: Top 10 Detailed Myths About Cryptocurrencies
Frequently Asked Questions (FAQs)
What is the market cap of Ethereum?
The current market cap of Ethereum is ₹15.75T. A high market cap implies that the asset is highly valued by the market.
What is the all-time high of Ethereum?
The all-time high of Ethereum is ₹399,009.70. This all-time high is the highest price paid for Ethereum since it was launched.
What other assets are similar to Ethereum?
Assets that have a similar market cap to Ethereum include Bitcoin, Ethereum 2, Tether, and many others.
How many Ethereum are there?
The current circulating supply of Ethereum is 122 million.
What is the typical holding time of Ethereum?
The median time that Coinbase customers hold Ethereum before selling it or sending it to another account or address is 124 days.
What is the relative popularity of Ethereum?
Ethereum ranks 2 among tradable assets on Coinbase. Popularity is currently based on relative market cap.
Can I buy Ethereum on Coinbase?
Yes, Ethereum is currently available on Coinbase’s centralized exchange.