In this article
Soon after the advent of blockchain technology, it has undergone strides of innovation and these innovations lay down the foundation of phenomenal cryptocurrency Ethereum.
As Ethereum is also a Blockchain-driven platform that’s why it is also completely decentralized. As an Ethereum is a completely open-source platform it paves the way for developers to contribute to the source code of it.
I sincerely hope this blog a beginner guide on Ethereum will enlighten and after reading this blog you’ll find yourself better educated with the key fundamentals of Ethereum.
Ethereum is the second largest innovation in the crypto landscape after the inception of bitcoin.
The main difference that distinguishes Ethereum from the Bitcoin is that bitcoin is generally envisaged as digital money, but Ethereum is a decentralized platform that provides a ground to the programmer for creating digital money that can be used in a monetary system as a medium of exchange for goods and services.
Even though both the Ethereum and bitcoin unleash the power of distributive ledger technology to sustain decentralization, transparency, and security of the platform, but there are many technical differences between them.
Let’s have a look at what makes Ethereum distinguishes from the bitcoin.
Difference between the Ethereum and Bitcoin
Both bitcoin and Ethereum are envisaged as the same entity, but both of them were designed with a different purpose.
Bitcoin is a peer-to-peer electronic cash transfer system designed specifically for payment or as a lucrative investment vehicle. Whereas Ethereum is a versatile platform that was designed to fuel the growth of smart contracts and decentralized web applications.
But what would be the growth prospect of Ethereum? Let’s take a look at it.
Overview of Ethereum
If you want to develop decentralized applications harnessing the potential of blockchain technology, you need an open-source public blockchain-driven distributive computing platform. This is where the power of Ethereum comes into the picture.
Before the advent of Ethereum, blockchain-driven applications have very few real-life implications. Bitcoin and all the other cryptocurrencies can be only used as the default medium of payment in contrast to the traditional fiat money.
In order to make it possible for the developers to write highly effective computer programs on the blockchain. Vitalik Buterin comes up with an idea of Ethereum. In order to cater it to the need of masses beyond just currency issuance, he used the same blockchain protocols that were used in bitcoin.
Simply speaking, smart contracts are the programmable contract between the two peers. A contract that self-executes once the specified condition is successfully met. Additionally, smart contracts take care of the enforcement, management, performance, and payment.
You need to acquire a token for executing smart contracts and for trading. Needless to say, Ethereum is worthless without cryptocurrency.
Ethereum operates on its native token that can be used for two primary purposes:
- In order to perform any operations on Etheruem-oriented applications Ether payment is mandatory and for securing the platform from the malicious programs and activities.
- Ethereum platform uses the same reward mechanism that is used in Bitcoin as it incentivized its miners with its token Ether who contribute to the Ethereum network
To run the computation successfully Ethereum consumes a token known as the ‘gas’ after the execution of a contract.
Gas in Ethereum
You need to pay for every operation that you performed on Ethereum blockchain. If the gas price is expressed in ether then the specific threshold of the gas price will be charged by the miner to process the transaction.
If we take into consideration recent technological breakthroughs in the blockchain landscape, we can conclude Ethereum has very promising growth potential in the nearest future.