This post contains affiliate links. As an Amazon Associate I earn from qualifying purchases.
Is Ethereum a cryptocurrency? Why are so many people interested? Is it on the Blockchain? You see it everywhere, but why is it so prominent?
What could possibly be giving Bitcoin a run for the money? ETHER doesn’t cost nearly as much. Wait! Are we talking about ether or Ethereum?
What Is Ethereum?
Ethereum was cofounded in 2013 by Vitalik Buterin, Anthony Di Iorio, Charles Hoskinson, Mihai Alisie, and Amir Chetrit. Later Joseph Lubin, Gavin Wood, and Jeffrey Wilke were added to the founding team.
Keeping in mind that Bitcoin and Blockchain were once considered synonymous – Bitcoin could not exist without a blockchain – in early 2013 Vitalik Buterin tried to program using the Bitcoin core. He wanted to build decentralized applications (dapps), but he soon realized Bitcoin’s seven transactions per second were insufficient.
Vitalik released a whitepaper for Ethereum and soon thereafter he and a group of fellow programmers designed the Ethereum blockchain.
On July 30, 2015, the first block of the Ethereum network was mined.
Ethereum is a programmable blockchain. Hailed as a world computer, it set a whole new paradigm (world view) for application development.
You don’t need anyone’s special permission to use Ethereum. It is not run or owned by any company or organization. Rather, it is maintained and continuously improved by users, contributors, and investors all over the world.
Since late 2017, the Ethereum blockchain has been operating at nearly 100% capacity. Here are some of the biggest users of Ethereum as of 2018:
- Gemini Dollar
The Ethereum blockchain pops up in some unexpected places. I found that although Wallet 1 has USDC and Wallet 2 holds it, I can’t transfer USDC to Wallet 2 unless Wallet 1 has ETH in it, thus enabling usage of the Ethereum blockchain.
Let’s just say I find that to be an eye-rolling inconvenience. I had JUST transferred my ETH to Wallet 2. Now I need to put it back into Wallet 1, then transfer my USDC, then transfer the ETH back to Wallet 2 again.
So, we now know that Ethereum, itself, is not a cryptocurrency. However, being its own blockchain, it does have its own cryptocurrency – ETHER (ETH).
Ethereum 2.0 Serenity
Ethereum 2.0, codename Serenity, is just about ready. So far, the first phase, Phase 0, has been implemented. The rest is on the way.
Differences you can expect:
- Mining goes from Proof Of Work (POW) to Proof Of Stake (POS).
- Sharding will be introduced.
- Eventually, Phase 0 will be replaced with eWASM, which will be the first gateway to the new blockchain.
According to Vitalik, Ethereum 1.0 is a couple of people’s scrappy attempt to build the world computer: Ethereum 2.0 will actually be the world computer.
Ethereum developers have said, Transitioning the Ethereum network from PoW to PoS has been on the roadmap and in the Yellow Paper since the launch of the protocol. Although effective in coming to a decentralized consensus, PoW consumes an incredible amount of energy, has no economic finality, and has no effective strategy in resisting cartels. Excessive energy consumption, issues with equal access to mining hardware, mining pool centralization, and an emerging market of ASICs each provide a distinct motivation to make the transition as soon as possible.
WAIT! There Are Already Two Ethereums!
Confused yet? If so, join the club. Etherium is already technically divided between regular and classic. Sounds like a cola, doesn’t it? However, the cryptostory isn’t based on flavor, technically.
Once upon a time, there was a happy Ethereum. Its currency was Ether. Everyone happily used Ethereum and Ether to make applications and buy things. Good times.
Along came some thieving hackers! These people stole roughly $50,000,000 in ETH. This disruption ultimately led to a fork, something I’ll cover in-depth some other time.
Basically, people’s loyalties were divided along which potential path was most in tune with the original concept. For the most part, people chose the new path as in keeping with the original concept. The others went with the same old road, which became known as Classic Ethereum.
The full story can be found here.
Ethereum Classic (ETC)
- Not supported by Vitalik Buterin
- Holders and promoters reject forking and potential evolving
- Current price per coin: $4.41
- Maintains PoW mining, which is costly
- Supported fully by Vitalik
- Evolving into 2.0
- Current price per coin: $129.35
- Moving to PoS mining, which is much cheaper
ETHER is the cryptocurrency to which most people are referring when they say “Ethereum”.
Ether is Ethereum’s widely-used cryptocurrency. It has been called the fuel of the Ethereum blockchain. Indeed, buying and selling anything on the blockchain can be done with and requires ETH.
Currently valued at $129.35 per coin, it is second in popularity only to Bitcoin, which values at $7165.90.
Places To Buy Ether
Well, that is my beginner’s article on Ethereum! Someday, a more in-depth article may follow. But we’re all beginners (?) and Ethereum is a long story. Suffice it to say, ETH is a savvy investment.
Thanks for reading! Share your thoughts on Ethereum and all things related in the comments below!