What is Ethereum? Exploring Foundation of Decentralized Applications
Ethereum is a distributed blockchain platform for smart contracts and space-divided applications. Ethereum comes at 2nd most important and valuable cryptocurrency after Bitcoin, within 2 years of its release. The Ethereum network gained a lot of interest around the world when China claimed that it is the best blockchain network ever created. Ether (ETH) is a native cryptocurrency used in all transactions in the Ethereum blockchain.
Other founders include Gavin Wood, Charles Hoskinson, Anthony Di Iorio, and Joseph Lubin. Its network consists of open, internationally distributed computing infrastructure, which makes programs called smart contracts. This network is powered by ether (ETH). A smart contract is actually a code that binds two parties to an agreement and can accomplish itself, without a mediator.
Why Ethereum Was Created?
Vitalik Buterin built Ethereum as for him, Bitcoin’s scripting language was very limited in functionality. Buterin published Ethereum's first white paper later in 2013, defining a distributed computing platform for smart contracts and building classified applications (dApps). In 2014, Buterin and other early participants established the Ethereum Foundation, a non-profit organization dedicated to Ethereum research, core protocol development, and ecosystem growth. The primary function of the foundation was to manage the Ethereum crowdsale, which raised 31,529 BTC (~ $ 18 million at the time) in exchange for about 60 million ether and used available funds to fund the initial development of the network.
Buterin compared bitcoin to a pocket calculator that "does one thing right," while saying that Ethereum is like a smartphone with many apps to use. That is the core of Ethereum. Like bitcoin, it is built on blockchain technology - actually a distributed computer network that records all cryptocurrency activities. But people can build apps on top of Ethereum, which is not possible in Bitcoin.
Use Cases of Ethereum
Decentralised Finance (DeFi)- Decentralised finance applications, or "DeFi," are among the most promising real-world applications for Ethereum. This involves the creation of stablecoins, loans backed by smart contracts, and decentralised exchanges.In payments- Commerce is the foundation of the global economy and Ethereum has the potential to significantly change that by allowing so-called "smart contracts" to be established on Ethereum.
Data storage - Ethereum's blockchain technology can be used to rapidly and securely transfer data encrypted across millions of computers.
NFTs - NFTs have a single owner and are secured by the Ethereum Blockchain. A new NFT cannot be made by copying and pasting an old one, and no two NFTs can be identical. They are compatible with anything developed on the Ethereum platform.
Conclusion
Ethereum is a technology that completely changes the way transactions are made. Thanks to smart Contracts, it is possible to change all existing contracts in order to improve performance security, limit costs, and distribute the land. Apps are almost limitless and we are still in their initial phase.
When talking about usage and development, Ethereum is more mature with a higher transaction value than Bitcoin. We can safely believe that Ethereum will continue to grow and remain one of the biggest players in the market because more than 50% of the top 200 projects in terms of market money are spent on Ethereum. In the next few years, Ethereum could be bigger than Bitcoin and accepted for use by big organizations like Google and Facebook. This is due to its wide range of applications.
