Ethereum. Features and Benefits
A Brief History of Ethereum
In 2011, a young developer, Vitalik Buterin, became seriously interested in blockchain technology, and a couple of years later decided to launch his "improved version of Bitcoin", which is now known to us as Ethereum. After receiving $18 million in investments for his project from world-famous investors (including PayPal founder Peter Thiel), the platform was already working well in a stable mode in March 2016.
Ethereum was originally conceived as a platform for cryptocurrency crowdfunding and the creation of blockchain applications. In June 2016, an ICO DAO was held on the basis of Ethereum, where $100 million was collected. However, in June 2016, due to a vulnerability in the system, about a third of the funds that existed at that time were stolen. On July 20, it was decided to conduct a hard fork to undo the hack and return funds to investors, which resulted in a disagreement between network participants and a division of the network into Ethereum Classic (the old version in which the hack occurred) and Ethereum (the current one, in which the hack did not occur).
Ethereum — the blockchain of a new era
Ethereum is an open software platform (or a kind of adapted framework) for developing applications, built on decentralized blockchain technology and based on "smart contracts". The internal cryptocurrency of the network is ETH (Ether).
At one time, Ethereum was informally described as the "next generation Bitcoin" platform. But in fact, Ethereum and Bitcoin are very different. The main purpose of Ethereum is to provide a decentralized platform for application developers, in which information about program codes is recorded, and the ETH cryptocurrency is an asset when performing an action fixed in a "Smart Contract". A "Smart Contract" is a kind of "program" or algorithm in which certain conditions are pre-set by the developer, upon fulfillment of which an asset is paid in the form of ether. The system can be considered ideal in terms of contractual relations, since after the launch, interventions and changes to the contract are excluded.
Features of the Ethereum cryptocurrency
The main feature of Ethereum is the versatility of this payment system and the ability to create your own cryptocurrency by attracting funds through crowdfunding Ethereum is the second cryptocurrency after Bitcoin
Fractional parts have their own names: wei — 1/1018 (0.0000000000000000001), the smallest particle of ETH, named after Wei Dai, who formulated the concepts of all modern cryptocurrencies gwei — 1/109 (0.000000001), a unit of measurement of the cost of the commission (gas) for transactions in the blockchain
In addition to its function as a negotiable means of payment, ETH can be used to pay for smart contract transactions and tokens.
When creating a new wallet, only one Ethereum address is created, unlike the Bitcoin network, where one wallet owns many addresses. This solution simplifies tracking the movement of funds
The average transaction processing speed for Ethereum is about 3 minutes. In terms of block generation, Ethereum is one of the fastest cryptocurrencies.
Fees on the Ethereum network are small, averaging around 0.0009 ETH.
GPopularity of ETH cryptocurrency
In the second half of 2014, 31,591 BTC (equivalent to $18,439,086 at the time) were raised through crowdfunding and exchanged for 60,102,216 ETH.
Since Ethereum's creation in 2015, the cryptocurrency has seen slow growth in its first year. The platform has gradually begun to attract the attention of many banks as a testing platform for studying smart contracts and bonds.
The main peak of growth occurred in 2017, when the currency reached $407, which amounted to 5000%.
By January 2018, the total capitalization exceeded $100 billion, but by August 2018 it had fallen to $30 billion.
Today, ETH remains the second cryptocurrency by capitalization. Stablecoin tokens (USDT, TUSD, USDC, PAX), which mainly operate on the Ethereum blockchain, are also in high demand.
Wallet for storing ETH
To start working with ETH, you need to create your own wallet. The choice of a specific wallet option depends entirely on your personal preferences in terms of security and convenience:
Installing the desktop program on your computer. In this case, for correct operation, you need to download and constantly synchronize the entire Ethereum blockchain network to the current state. It is recommended to use MIST or Ethereum Wallet wallets, which can be downloaded from the official Ethereum.org website.
MyEtherWallet Web Wallet. This is the most popular Ethereum web wallet, it allows you to log in on any device using your username and password. MyEtherWallet stores your Ethereum private keys on your personal computer, which provides greater security than other wallets of this type.
Using multi-currency wallets: Coinomi, Exodus, Jaxx or Metamask. The main advantage of these wallets is that they are convenient to use for other cryptocurrencies as well.
Using hardware crypto wallets such as Ledger or Trezor. The main advantage of such wallets is security, as cryptocurrencies are stored on a device that operates offline.
Ethereum Blockchain Speed
Blocks in the Ethereum blockchain are created approximately every 13 seconds. It takes 4 confirmations of the Ethereum blockchain for an exchange to take place.
With a high commission, the transaction will be able to get into the next block.
With an average commission, the approximate transaction processing time is 3 minutes.
When paying below the average fee, the speed of getting there will depend only on the network load and the increase or decrease of the load. Some explorers (for example, etherscan.io) provide information about the expected transaction processing time, but it is important to understand that this value is not exact and may change depending on the situation.
