What is Ethereum? It's the second largest Cryptocurrency by market capitalization and, besides Bitcoin, the most well-known digital currency in the world! Learn more about it by reading the content below.
What is Ethereum? See Our Dummies Handbook
What is Ethereum? It's the second largest Cryptocurrency by market capitalization and, besides Bitcoin, the most well-known digital currency in the world! Learn more about it by reading the content below.
What is Ethereum? See Our Dummies Handbook
What is Ethereum?
In fact, Ethereum (ETH) is – after Bitcoin – the most well-known cryptocurrency in the digital market, but most people don't even know what Ethereum actually is! It was created and conceived by Vitalik Buterin in 2013 and promises to be gigantic in the coming years.
Some people have the habit of "comparing" Bitcoin with Ethereum, but the truth is that both cryptocurrencies have different characteristics! And not only that, but they were created for different purposes! We know that Bitcoin is a decentralized network and its function is: Store of Value.
In the case of Ethereum, the proposal is to be a Blockchain for building decentralized applications! It is through this network that companies can build DApps (decentralized applications). Who doesn't know projects like Chainlink or Uniswap? Both are built with Ethereum Blockchain technology.
Chainlink (LINK) is an oracle that communicates data from the real world to the digital world, and Uniswap (UNI) is a decentralized exchange where users can "lend" their cryptocurrencies to the protocol to generate liquidity and be rewarded!
Therefore, when you hear the word "Ethereum," keep in mind that, in addition to cryptocurrency, we are talking about a decentralized platform that allows users—essentially technology companies—to create applications.
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Who are Ethereum's Competitors?
As mentioned above, in addition to its function as a "Cryptocurrency," ETH is a creation platform that uses the Solidity programming language so that programmers can create their applications. Ethereum doesn't have a direct competitor in its technology. The closest competitor is Solana – although it is also a Layer 1 cryptocurrency, it doesn't use modular technology like Ethereum (which needs second layers, such as the Base Network and Arbitrum Network, to be scalable)!
However, there are some other cryptocurrencies that aim to be more "scalable" than Ethereum, which is one of the protocol's major difficulties. Because Ethereum prioritizes decentralization and a low number of blocks mined per minute, when network demand is very high, the fees for transferring ETH or interacting with dApps end up being extremely high: even the highest on the market – although this has improved considerably today.
As a result, new cryptocurrencies are emerging with the promise of "beating" Ethereum in this regard, such as Solana (SOL), Cardano (ADA), and the Binance Network (BNB).
What is the future of Ethereum?
Without a doubt, when we talk about cryptocurrencies with a 'bright future ahead', one of the only cryptocurrencies that comes to mind – besides Bitcoin – is Ethereum. The demand for this ecosystem continues to grow.
This is without mentioning all the development being done within the Blockchain, where topics like DeFi and Stablecoins continue to grow year after year and, as we know, the vast majority of these DAOs (decentralized autonomous organizations) are built within this network.
Regarding the price, we can only speculate on how much this cryptocurrency will one day be worth. Currently, it costs US$2,179, but it reached US$4,644 at its all-time high in 2021. It's a fact that if the demand for the ecosystem continues to grow at this same rate, this all-time high could be surpassed by 2030.
There are Blockchain experts who say that Ethereum could exceed US$25,000 in the long term and, frankly, demand will have to remain very high for that to happen! Vitalik's ultimate goal for the coming years is for everyone to be able to run a "node" of the network on their smartphone, making the network much more decentralized.
Remember that this is just our opinion! Never forget to invest responsibly and with a long-term focus!
Lucas Lippe
The idea of freedom is fascinating and Bitcoin gives us that in many ways. Explaining ideas of a decentralized web on the Bitcoin Lovers website.
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