Ethereum: a complete system and not just a digital currency!
With the huge spread of digital currencies and the demand of investors for them, and with the wide fame that bitcoin has gained as a digital currency, the recently popularized Ethereum is not just a digital currency itself, but even bigger!
Ethereum is a complete system and software platform that works as a decentralized internet and a Decentralized Application Store; that is, it is not controlled by one controlling entity, although the majority of online businesses and companies are built on a centralized system, but this system is operated from thousands of devices around the world.
Such an independent electronic system certainly needs a digital currency to meet the computational needs required to run any application or program, and this is represented by the role of the digital currency Ether (ETH).
The Ethereum currency was launched in 2015 in Switzerland by its founder Vitalik Buterin and became available in the Arab region for the first time via the BitOasis platform in February 2017, so the Ethereum currency is just part of the applications of Ethereum smart contracts.
How does the Ethereum system work?
Ethereum consists of an Internet Browser, its own markup language, and a special payment system as well, and allows its users to create applications on a system called the (Blockchain), which is a distributed public ledger technology, and the most important thing made possible by the Ethereum network is the following:
- Decentralized applications: In principle, they are similar to smartphone applications and other cloud applications, but they are hosted on the Blockchain system and are not managed by a developer or a central entity, and cannot be removed immediately after being placed on the Blockchain.
- Smart contracts: They are a distinctive type of Ethereum account capable of owning the balance and sending currencies, and what distinguishes them is the inability of the user to control them, therefore they are also called self-applied tokens.
- Hosting digital currencies in ERC-20:The Ethereum network hosts thousands of other digital currencies or tokens, and these include some of the most famous and largest digital currencies in the world, such as (Chain Link), (Tether), (Shiba Inu), and others.
Ethereum and bitcoin: Are they the same?
As bitcoin is the first stable digital currency, Ethereum, on the other hand, is part of the Ethereum project, as for the most important differences between them are as follows:
- Both bitcoin and Ethereum adopt Blockchain technology, which allows checking and confirming the record of each currency.
- Bitcoin and Ethereum operate on separate protocols, which means that some transactions that may be allowed on one of the two systems it may not be allowed on the other.
- Ethereum is recognized via the Ethereum network, but it is not widely distributed, in contrast, Bitcoin cannot be used as a recognized currency in Ethereum.
- A maximum of 21 million bitcoins can be created, but the creation of Ethereum may be endless.
- Bitcoin mining can be done using industrial mining farms, while decentralized Ethereum mining of the currency can be done by individuals and users.
What is the price of Ethereum against the dollar?
- Ethereum was first traded on August 7, 2015, for 2.77 dollars, then its value fell on August 8, 2015, to 0.81 dollars, and the value remained below 1 dollar until January 2016.
- Four years in the trading world have significantly increased the value of Ethereum; in December 2020, the value of the currency reached 567.6 dollars, while the value of Ethereum on March 22, 2022, was about 2860.64 dollars
Should you invest in Ethereum?
There is no doubt that the cryptocurrency market is a very volatile market, so it is not always possible to say for sure that profit is made, but as Ethereum is a popular currency, the reason for its spread may be due to the following:
- Completely immune from any external interference or the presence of a third party, this ensures the complete autonomy of decentralized applications, protecting them against hacking attacks.
- Eliminate any possibility of fraud, corruption, or forgery, in order to rely on the principle of (Blockchain) used in the system on consensus, and any change within it must receive the full agreement.
- The entire platform is decentralized, which means there is no fixed point for failure, and this ensures that work on the system will never stop.
- The platform provides users with a virtual Ethereum device (EVM), which serves as an operating environment for smart contracts, providing users with protection while ensuring that programs do not interfere with each other.
On the other hand, with the wide fame achieved by Ethereum, however, the project is still relatively new, so the Ethereum system has developed its technological performance and has undergone several updates over the years of its development, most of which fall into the periodic update for development and security purposes, such as updating Homestead, DAO and Altair.
Also, experts advise keeping an investment of less than 5% of the total storage portfolio, investing in what can be lost, and not at the expense of significant financial obligations.