What Is Ethereum? What Makes It Different From Bitcoin?

What Is Ethereum?

Created in July of 2014, Ethereum is a blockchain, or a continuously growing list of records called blocks, on which transactions are recorded.

Blockchain is a method by which records are stored securely and cryptographically and is generally viewed as a more secure method of recording transactions that could be manipulated or changed.

Ethereum code is made up of four main components: the blockchain (a list of blocks where all transactions in Ethereum take place), the Dapp (decentralized application) engine, and Ether (ETH).

The Dapp engine is similar to the Node.js code that powers a lot of web apps, except it is embedded into the blockchain code.

  • Ethereum Symbol: ETH
  • Rank# 2

The Ethereum Network

The ETH network allows any user to create, deploy, and run smart contracts. These smart contracts are elaborate computer programs that can run without any need for a central authority or a bank account.

These contracts run when specific conditions are met. Smart contracts can be created to facilitate escrow services, asset management, crowdfunding, and insurance contracts.

Smart contracts are also the major features of The DAO, the first decentralized autonomous organization and one of the most well-known projects on Ethereum.

The DAO, the first DAO, was launched on June 15, 2016, and was very popular, but also ran into problems. It has generated more than $150 million worth of Ether (ETH) in the last six months. 

Ethereum vs. Bitcoin

Bitcoin is a digital currency with its own blockchain and programming language. Unlike Bitcoin, which focuses on moving money around quickly, Ethereum focuses on providing its users the ability to create apps that execute code of their own.

There is more than $200 million in value in Bitcoin being paid out in transaction fees and the token markets at the moment, compared with $18 million in Ether.

With the rollout of Ethereum-based apps on the platform, we’re now seeing the beginnings of truly decentralized apps, or dapps.

The point of the platform is to free the developers, designers, and investors from the traditional centralized structure of “Blockchain 2.

The Ethereum Blockchain

An Ethereum transaction is verified by a peer-to-peer network, called the Ethereum blockchain. The network consists of computers running code written in the programming language Solidity.

When someone runs an ETH transaction, they send a certain amount of ETH to an address on the blockchain. The sender of the transaction also specifies a series of amounts they want to send. It’s up to the recipient to confirm the transaction.

They can do this either through using a private key associated with the sender’s wallet address or by simply stating on the blockchain that they received ETH. Eth is the “fuel” of the Ethereum network, and ether, the cryptocurrency, is usually used by Ethereum users for computation. ETH has a limited supply of 21 million. Currently, about 15.

Ethereum’s Programming Language Solidity

What Is The Difference Between Bitcoin And Ethereum?

While Bitcoin is designed to be a currency, that’s not necessarily the case with Ethereum. Specifically, Bitcoin’s “currency” has no intrinsic value.

Instead, it has value in that it can be used to buy goods or services with Bitcoin. On the other hand, Ethereum’s currency, Ether, does have an intrinsic value. That’s because it can be used as the “fuel” for decentralized applications on the Ethereum blockchain network.

These applications are called “Dapps” and some of them are simply programs that anyone can write for the Ethereum network. The program on the Ethereum blockchain network is referred to as a Smart Contract.

What is Ethereum Mining?

In the traditional blockchain ledger, transactions are locked in an encrypted, distributed ledger called the “blockchain”. When a miner solves a particular hash function, he can add a block to the blockchain and be rewarded with Ether, the native currency of the Ethereum blockchain.

In this way, mining gives owners of digital currency the ability to “stake” or put an interest-bearing stake in the success of the network.

The Proof-of-Work System and Ethereum In the traditional blockchain system, validators to the system validate the authenticity of transactions on the blockchain by solving complex cryptographic hashing functions. Each block of transactions is followed by a new block containing a hash of the previous block.

Ethereum Mining Tips

It requires a powerful and fast computer to mine in the first place. At the time of writing, the fastest mining rig is the Antminer S9, which can process 8 PH/s of hashing power.

The Antminer is not intended to be a practical mining rig. It is large, loud, and power-hungry. For the price, the Antminer S9 is good enough to mine Ether and Ether classic, but with Ethereum becoming increasingly popular it is an expensive luxury for most people.

That said, let’s take a look at how to mine Ethereum using the Antminer S9. What to Do: Configure Your Antminer and Get Ready This is pretty easy.

You’ll have to buy the miner, but it is relatively affordable compared to other mining rigs out there. The basic cost is around USD 200, with support, extra power, and upgrades for around USD 400.

Conclusion

Some of the things in the list are for the long-term which I also like, and there are some things on the list that you should definitely start using, like encryption, secure messaging, taking advantage of automatic backups, or learning the basics of cryptography, or recognizing cryptocurrency is not a currency but a virtual token with its own internal value, and their purpose is to interact with our natural world in a decentralized and immutable way and avoid middlemen or transactions costs.

Keep in mind that cryptocurrency is not a currency, but a token for exchange, and some cryptocurrencies, like Bitcoin, are intended as trading vehicles, not stores of value. In addition, Bitcoin is not the only cryptocurrency out there.

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