Ethereum – The Second Viable CryptoCurrency
At the time of writing this article, Ethereum value is 750$ per coin. Ethereum is a relatively new cryptocurrency, a bit over 2 years ago, on July 30, 2015 it went live and started trading for around 1$-3$ a coin for the first 7 month. For the next year it traded around 10$ a coin, and earlier this year it made a more significant jump and recently its traded around 300$, and in the recent month it jumped again to the 700$ – 800$ a coin.
Vitalik Buterin invented the Ethereum in late 2013 and was up and running in less than 2 years. If you owned 100$ worth of Ethereum in late 2015, you would have today 30,000$ worth of Ethereum.
Ethereum and Bitcoin are distant cousins and while they do share the fact they are both based on blockchain technology, they differ in a few prominent issues. While Bitcoin has the option of making a money transfer, Ethereum has the option of making a “smart contract transaction”. In Bitcoin you will see “David sent John 1 Bitcoin”, and in Ethereum you might see other types of transaction like “if David earned 1 Ethereum send 0.5 to John”.
Ethereum is a limiteless coin unlike Bitcoin. And it currently has 96.5 Million coins. There is no cap on the supply of new coins. But, there is a limitation on the coin creation through the mining process each year depending on the consensus rues.
The same rules apply for Bitcoin and Ethereum wallets and some of the Ethereum wallets support both coins. So if you have interest in holding both coins, find a wallet that supports both.
Ethereum is different than Bitcoin in more than a few things, ill try to mention the main one’s here:
- Decentralized Platform – The design of Ethereum is to be more than a payment system. It is “a decentralized platform that runs smart contracts: applications that run exactly as programmed without any possibility of downtime, censorship, fraud or third party interference.” (Ethereum Foundation, 5 2016)
- Smart Contracts – Ethereum support many different types of transactions.
- Turing complete Language – Ethereum is written in 7 different languages (Bitcoin is written in C++).
- Faster Transactions – Currently an Ethereum transaction confirmation takes place after 14 seconds, far less than the 10 to 60 minutes of Bitcoin (and even longer transfer time in busy moments on the Bitcoin network).
- proof-of-stake model – Ethereum is still operating in the same “proof of work” system as Bitcoin (Have to solve math equations to validate transactions and generate new coins in the process). It is discussed on switching the Ethereum to Proof of Stake Model, in this Model there will be no miners, only validators, in order to validate a block you will need to “bet” your Ethereum on the block, and if its found to be fraud, you lose your stake, your Ethereum, it’s a different system designed to spend less energy on validations.
Microsoft Azure adopted Ethereum and started offering it as a service in November 2015. Microsoft announced that the reason they chose Ethereum over Bitcoin was: “while a platform like Bitcoin has many great uses specifically as a Cryptocurrency, Ethereum provides the flexibility and extensibility many of our customers were looking for” (Gray, 2015). By offering Ethereum as a service on Azure, Microsoft have “endorsed” Ethereum and by that partly secured its future.
By now almost all available wallets support Ethereum, if you wish to learn more about which wallet you should use to store your cryptocurrency, read our Bitcoin wallet article.
Where to purchase Ethereum?
Most of the exchanges in the world allow users to buy Ethereum, and any of the exchange platforms offered in our exchange platform article.