An open-source blockchain platform, Ethereum offers smart contract functionalities for its users. Ether (ETH) is the digital currency of this blockchain platform. It is currently the world’s second-largest cryptocurrency, trailing only Bitcoin in market capitalization.
On 30 June 2015, the Ethereum blockchain went live along with the Ethereum Classic. It was two years from the ideation phase, conceived by programmer Vitalik Buterin. ETH — the platform’s native token was released a year earlier, in August 2014.
What is the Ethereum blockchain?
Ethereum is primarily a software platform that uses blockchain technologies. Users can transfer value worldwide, avoiding any third-party interference. However, developers can do much more with the platform.
By design, the platform enables developers to create and host applications. These apps (dapps or decentralized applications) can execute automatically using smart contracts.
Ethereum’s creators
Although it was Buterin’s vision, he wasn’t alone in developing Ethereum. Gavin Wood, Charles Di Iorio, Charles Hoskinson, Joseph Lubin, and Mihai Alisie are some of the other founders who made the vision a reality.
After writing the initial codes, Gavin Wood authored the technical specifications for the Ethereum Virtual Machine (EVM). The EVM is what runs the smart contracts and handles all the ledger activities.
Smart Contracts
The way Ethereum blockchain works is by using smart contracts. These contracts are programs stored on the network that can execute themselves. The code-based programs come with some pre-set conditions. Then, they can automatically complete a transaction or activity in response to meeting the requirements.
The price of Ether
To raise some much-needed development funds, Buterin and his team launched Ether (ETH) in August 2014. Initially, they sold around 50 million coins, raising more than $16 million. The selling price was $0.31 per coin.
Between 2014 and 2017, the price of Ether remained below $1 per coin. The top and bottom of the range were between $0.70 — $0.21. However, in May 2017, the price skyrocketed to over $100.
As the bull market continued to rage, Ethereum’s price reached $414 before the end of 2017. The price gained tremendous momentum again in 2018, peaking at $1,418 before taking a vast drop.
After years of ups and downs, Ether’s price went on its second bull run in 2021. Between February and May of that year, the price smashed through its previous all-time high, setting a new record at $4,379 per coin.
Difference between Bitcoin and Ethereum
Bitcoin and Ethereum may be the two biggest cryptocurrencies, but they are not the same. They differ significantly in terms of functionalities, speed, and supply methods. Some fundamental differences are:
- Bitcoin only offers trading in cryptocurrencies. Ethereum, in comparison, offers multiple methods — Ether coin, Ethereum Virtual Machine (EVM), and smart contracts.
- For security, Bitcoin uses a “proof of work” system, while Ethereum uses a “proof of stake” system.
- Ethereum’s 10 seconds dwarfs Bitcoin’s 10 minutes requirements regarding the average block time.
- Bitcoin offers rewards for the miners for solving each block. In contrast, ETH allows miners to charge a transaction fee.
Most importantly, Bitcoin has a supply cap of 21 million written in its code. On the other hand, Ethereum has no supply cap and comes with a 4.5% annual inflation rate.
Ethereum’s advantages
Mainstream analysts and publications like Bloomberg designated Ethereum as the most attractive platform in the blockchain and cryptocurrency world. The reason lies in its multiple offering, which enables individuals and companies to go beyond transactions.
With smart contacts, Ethereum can help businesses and individuals make deals. A perfect example is the rise of NFTs, the Ethereum-based system ensuring copyrights for digital artworks, and more. The network can also host data for third-party applications securely.
Where to buy Ethereum (ETH)?
The digital currency, Ether, is very popular and is widely available to purchase online. Most Cryptocurrency exchanges, including Coinbase, Bitstamp, Bitfinex, and more, allow users to buy and exchange Ethereum. Users can also buy them on traditional fintech platforms like PayPal.
Is it legal to buy and use Ether?
The laws around Ethereum vary from country to country. It is legal to buy and use Ether in the US, the UK, and most countries in Europe. However, prospective owners should research local laws and regulations for taxation purposes.
Which businesses accept ETH?
The acceptance of Ether in real-life situations is increasing all the time. The online sports betting and casino industries were at the forefront of accepting the coin. It is also possible to buy holidays, electronics, fashion items, web tools, and beyond using this token.
Thanks to NFTs, people can also use ETH to own and collect art pieces and objects. Investors can store value in this currency or trade them in exchanges to make a profit.