December 7, 2022

What is Ethereum? Find History How it Works And Their Components

The world of cryptocurrencies is growing rapidly. With the advent of Satoshi Nakamoto’s Bitcoin in 2009, other inventors have begun to create more types of cryptocurrencies. According to CoinMarketCap data, there are currently 7,812 cryptocurrencies.

One of the cryptocurrencies that competes closely with Bitcoin is Ethereum. According to the Forbes website, experts predict that Ethereum prices will reach US $ 5,000 per Ethereum by the end of 2021 and could exceed US $ 50,000 by 2030.

Ethereum Explain

Ethereum is a decentralized software platform that allows you to build and run smart contracts and decentralized applications (DApps) without downtime, fraud, control, or third-party intervention. This definition is contained in this Digital Economics and Business.

Citing the basics of cryptocurrency investment and trading, Ethereum itself is building a blockchain network focused on Ethereum coins. Coin developers can create their own coins on the Ethereum network.

History of Ethereum

Citing the book Ethereum for Dummies, in 2013 Bitcoin Magazine co-founder Vitalik Buterin released an official report proposing a new, more functional blockchain implementation. This proposal is a pioneer of the Ethereum blockchain.

After attracting a large number of people and receiving technical and financial support, the Ethereum Foundation was established. This is the Swiss non-profit organization that developed Ethereum.

In addition to being a type of cryptocurrency, Ethereum has smart contracts to ensure integrity across all nodes. Code that runs on one node runs the same way on all nodes. This system allows Ethereum to deploy a variety of applications.

With reference to the Mastering Ethereum book, the Ethereum platform allows developers to build powerful decentralized applications with built-in economic capabilities. Ethereum can provide auditability, transparency and neutrality. Ethereum also reduces censorship and certain risks.

Ethereum conducted an initial coin offering or ICO from June 2014 to August 31, 2014, based on the book “Blockchain and Cryptocurrencies from the Legal Perspective of Indonesia and the World”. The funding target at the time was US $ 16 million, a designated time frame.

The Ethereum platform created a cryptocurrency called Ethereum (ETH) and began trading on August 7, 2015. The price at that time was US $ 2.83, or Rp41,035 per chip. Bloomberg reports that Ethereum began demand in 2017 when the first coin offerings or ICOs became popular.

The price at that time reached US $ 1200. Ethereum’s popularity soared in 2020, when decentralized finance (DeFi) projects flourished. Many startups are interested in Ethereum. Its role is as a financial pillar, managing loans and collateral without the involvement of banks or brokers.

According to CoinMarketCap data, the latest Ethereum price is US $ 4,429.03.

How Ethereum works

Ethereum uses the concept of decentralized transactions (decentralized applications / DApps). Quoting an interview with Ethereum co-founder Vitalik Buterin on the Hir.harvard.edu page, Ethereum acts as a platform where anyone can upload code called smart contacts.

Anyone can issue smart contacts and send transactions. You can run the entire code on the blockchain. For example, if someone creates an app and someone else creates an app, the two apps can interact. The Ethereum environment is interconnected, so the more people you participate in, the wider your network.

In short, the way Ethereum processes smart contracts is similar to a computer program that runs automatically according to contract orders. It is programmed so you don’t need a supervisor. The smart contract function is cheaper to execute and more secure.

Like other cryptocurrencies, Ethereum uses blockchain technology. Blockchain technology is used to validate all transactions. These activities are recorded in a transparent and secure public ledger or an instantly recognizable public ledger.

In order to be traded, the Ethereum currency called Ethereum needs to go through a mining process. This is the act of adding transactions to the blockchain so that everyone can agree on the same set of transactions.

Ether can be used as a digital currency or investment in financial transactions.

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