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What is This Cryptocurrency? Ethereum

closeup photo of three round coins in person s palm

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Ethereum is a highly sought after cryptocurrency due to its origins. While Bitcoin was the first coin to exist in the cryptocurrency world, Ethereum was the second big cryptocurrency to exist. While Bitcoin may be the originator of cryptocurrencies by the anonymous Satoshi, Ethereum was created by Vitalik Buterin. Ethereum was created to solve a problem that Bitcoin could not solve. The ability to create a network or system that allows individuals, companies, or groups to establish a protocol to create new tokens on top of the Ethereum network. This scalability would allow for individuals to create new projects without having to create a new cryptocurrency. Why create a new cryptocurrency when all you have to do is add on top of an existing one?

While the question of scalability and inter-operatibility is a huge one and continues to create difficulties for some cryptocurrencies, Ethereum set out to help answer these problems and questions. After having several different tokens built on the network, Ethereum continues to go strong adding new projects. The only difficulty has been at times when the speed of the network can suffer due to the amount of use that is occurring.

Another Ethereum characteristic that allows it to be a game changer when it comes to cryptocurrency is the ability to create smart contracts. Smart contracts are special clauses that when written efficiently can allow for a future transaction to occur without having to specifically manually set the transaction. For example, if you want to buy a house and you want to buy the house at $250,000 rather than the current value of $400,00, you could specify a smart contract that would allow you to instantly hypothetically buy the house when the house value was decreased to $250,000. This is a hypothetical scenario, of course, and the ability to create smart contracts can be much more complex. This can lead to a revolution in asset management as well as the accounting of resources.

While Bitcoin’s price increase caught the attention of many, Ethereum has also had a great amount of return on investment when looking at the technical analysis. The top price of Ethereum was north of 1K which allowed individuals who invested early to make a great return. Ethereum’s ability to hold value also makes it an interesting cryptocurrency aside from the already aforementioned reasons.

Ethereum Price Graph

Ethereum also had a fork causing a new coin to be created called the Ethereum Classic coin. This coin was forked because network operators wanted the Ethereum Classic coin to be true to the vision of the initial Ethereum instead of the vision that was being created. Whenever operators decide that they want to fork a coin, there must be a determination by a majority of operators to decide on changing the protocol and create a new coin. The same instance occurred to Bitcoin as well as Bitcoin Cash. Litecoin also had the same event occur as seen in the coin Doge Coin.

 

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