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An Enthusiasts Guide to Ethereum

An Enthusiasts Guide to Ethereum

Ethereum isn't your average cryptocurrency. Ethereum has risen to the top of the crypto world, with its name often mentioned in the same breath as Bitcoin. The world’s second-most-valuable cryptocurrency is also its most interesting, but in order to understand it, we must first understand its origins. While both Ethereum and Bitcoin are cryptocurrencies on distributed public blockchain networks that can be traded among users, they are quite different. In 2009, an individual or group called Satoshi Nakamoto invented Bitcoin with the single goal of creating a decentralized universal currency. Four years later, a 19-year-old Vitalik Buterin dreamed up a new platform based off of this innovation in an effort to transform the internet entirely. He came up with the idea of a platform that would go beyond the financial use cases allowed by Bitcoin. In 2015, the Ethereum platform went live.

It helps to understand the internet before we can understand Ethereum. For time-saving purposes, we will not go into specific details, but the idea is that the internet was meant to be decentralized from the beginning. The emergence of blockchain technology has created a movement towards achieving this goal and now Ethereum joins as a major player in this movement. While Bitcoin aims to disrupt online banking, Ethereum has the goal of using its blockchain technology to replace internet third parties. Think of Ethereum as a world computer that wants to decentralize and democratize the existing client-server model. Servers and clouds are replaced by nodes run by volunteers from across the globe, thus, creating a world computer. Vitalik Buterin, co-founder of Ethereum, had the vision that Ethereum would enable people anywhere around the globe to offer services on top of its blockchain infrastructure. Ethereum allows developers to program their own smart contracts, strings of computer code capable of automatically executing when certain predetermined conditions are met. Smart contracts can function as multi-signature accounts, manage agreements between users, provide utility to contracts, and store information about an application. Using the smart contract, there’s no need for users to trust each other, they just have to trust the data feed.

Although a trustless monetary system is the goal, someone still needs to secure the financial records, ensuring that no one cheats. Mining is one innovation that makes decentralized record-keeping possible and miners play an important role in making sure Ethereum works. While one purpose of mining is to generate Ethers in a way that doesn't require a central issuer, it has another just as important role. Miners come to consensus about the transaction history while preventing fraud, an interesting problem that hadn't been solved in decentralized currencies before proof-of-work blockchains. Although Ethereum is looking into other methods of coming to consensus about the validity of transactions, mining currently holds the platform together. Because Ethereum mining is so important to the platform, you may want to know how to compete in the race to mine Ether yourself. In order to get started, you will need special GPU-based computer hardware because Ethereum mining requires a lot of time and processing power – learn more about mining at www.midcrypto.com.

Ethereum aims to function both as a kind of decentralized internet and a decentralized app store, supporting decentralized applications, known as DApps. Ethereum is undoubtedly the king of smart contracts and DApps. Ethereum’s flexible, extensible blockchain system makes it relatively easy for developers to build and launch their own DApps, DAOs, and crypto-assets. At present, it hosts more than 90% of the world’s DApps and smart contracts, a number which is only expected to grow. The Ethereum community already has more than 250,000 developers and nearly 95% of blockchain projects have launched on top of the Ethereum network. The vast majority of cryptocurrencies and tokens apart from payment-focused blockchain networks like Bitcoin, Ripple, Bitcoin Cash, and Litecoin are also built on top of the Ethereum protocol, the ERC20 token standard. Around three-quarters of the total cryptocurrency market value is tied up in assets built on top of Ethereum’s platform. Some of today’s top Ethereum-based cryptocurrency tokens are Binance Coin (BNB), OmiseGo (OMG), 0x (ZRX), Maker (MKR), Basic Attention Token (BAT), Augur (REP), Waltonchain (WTC), Golem (GNT), Status (SNT), Loopring (LRC), and FunFair (FUN).

Ethereum is a remarkable cryptocurrency and has made it possible for thousands of projects to exist. The primary goal of Ethereum isn’t to create a cryptocurrency that makes speculators a ton of money. Its purpose is to change the world. The Ethereum community attracts ideological supporters in the same way Bitcoin and other cryptocurrencies do, but it’s use cases give it life far beyond that of other coins. Imagine all the different transactions that occur in everyday life. More and more real technology is connected to the internet and it all needs to be run safely and with clear instruction. Now, imagine a world where smart contracts and dApps automatically guide technologies, while at the same time, keeping a permanent record of it all online forever. We are on the cusp of a new technological revolution similar to the dot-com boom of the 90s. Smart contracts are the future, and Ethereum is currently leading the way. Ethereum, alongside blockchain, is a technology that truly has the potential to revolutionize the way we manage data and interact with the world.

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