There’s a new cryptocurrency in town and it’s poised to make a splash in our increasingly digitized future. It’s called Ethereum, and chances are, you’ve never heard of it.
Keep in mind, this was the case with Bitcoin just over 5 years ago when you could snag one for a fraction of a penny. At the time of this article, you will have to cough up $735 USD for just 1 BTC. That’s a lot of greenbacks for a piece of code that is not backed by any governments, and is only accepted by a very small number of retailers. Not to mention that a Bitcoin has zero utility beyond being a unit of exchange. The reason that a Bitcoin is worth so much is simple. We believe that a Bitcoin is valuable and thus it is.
So what is Ethereum you ask, and what makes it different from the hundreds of other cryptocurrencies currently on the market? Well, Ethereum is much more than just a crypotocurrency. Ethereum is a decentralized software platform that enables smart contracts and distributed applications to be built and run without any downtime, fraud, control or interference from a third party. Ethereum is not just a platform but also a programming language running on a blockchain, helping developers to build and publish distributed applications. (Source Investopedia). This takes the most important component of Bitcoin – the blockchain, and exploits it for a wide range of uses.
Where Ethereum really differentiates itself is its utility. Because Etherium coins, known as “Ether” are required to power Ethereum applications, the currency itself actually has inherent usefulness. At the moment, Bitcoin does nothing more than record transactions in the blockchain. Ethereum can do this and much more, and this is where things really get interesting.
Ethereum applications are limited only by the imaginations of its programmers. Current applications in the works abound, but have the potential to disrupt many industries including finance, corporate governance, law, and even gambling. Because these applications are decentralized, they are not stored on any specific server and thus cannot be controlled or manipulated by any single entity. This revolutionary idea gives the power back to the people instead of being in the hands of the powerful few.
For example, imagine a completely decentralized stock market that recorded all transactions automatically and forever with little or no fees in the Ethereum blockchain. This system would be impossible to manipulate, would require no CEO or board of directors to run it, and would be 100% autonomous and fair for all parties. This is just one of the many ground-breaking applications that could become a reality through use of the Ethereum framework.
The other key advantage of Ethereum is that it is based on the Turing Complete scripting language. This programming language is easy to understand and code, unlike Bitcoin which features a very complex protocol that is a challenge to work with for even the most expert software engineers.
While it’s still early days for Ethereum, it has made significant progress since first launching in 2015. 1 Ether currently sells– for about $12 USD, and its total market cap is about 10% the size of Bitcoin. This makes it the second most popular cryptocurrency in the world after its main rival. However, it still has a long way to go. Bitcoin has a first mover advantage and is actually known by a large segment of the population. Luckily, Ethereum has a number of advantages over Bitcoin and its future appears brighter. With a focus on utility, usability, and scalability, Ethereum is poised to explode as more applications are launched and its benefits become clearer.
The future of Bitcoin is already here, and it’s called Ethereum.
Written by Peter Wywrot
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