Ethereum, the second-largest cryptocurrency network after the Bitcoin network, has more programmability, allowing smart contract developers to build decentralized applications (dapps) on its chain. Ethereum has a grand vision — to be the “world computer”. Almost anything that can be written as code and run through a smart contract on Ethereum can be created.
Ethereum, the second-largest cryptocurrency network after the Bitcoin network, has more programmability, allowing Bridge Smart Contract Development Services to build decentralized applications (dapps) on its chain. Ethereum has a grand vision — to be the “world computer”. Almost anything that can be written as code and run through a smart contract on Ethereum can be created.
Vitalik Buterin is the creator of Ethereum. After writing the Ethereum white paper in 2013, he was joined by other co-founders: Anthony Di Loria, Charles Hoskinson, Miha Alisie ), Amir Chetrit, Joseph Lubin and Gavin Wood. Ethereum launched its ICO (Initial Coin Offering), raising a total of about $5.2 million for platform development by selling over 1 million ether and 12,000 bitcoins to pay for those tokens. At current exchange rates, the tokens are worth nearly $400 million.
How is Ethereum different from Bitcoin?
If you hear about Ethereum for the first time, one of the first questions that come to mind is: How is it different from Bitcoin? They are both cryptocurrencies that operate in the Web3 economy, but are still fundamentally different in some ways. Ethereum uses the same technology as Bitcoin, which is a blockchain, a shared public ledger used to decentralize the network so that it is not controlled by a single entity. Bitcoin is primarily focused on payments and is used as a store of value (known as digital gold), but Ethereum is disrupting the way our regular applications work. From social media networks to more complex financial protocols, Ethereum allows these applications to be hosted on its network, removing single control through decentralized validator nodes on its network. These decentralized applications are what we now call dapps.
The EEA (Enterprise Ethereum Alliance) describes the following different positions:
“Ethereum differs from Bitcoin in that the network can perform computation as part of the mining process. This fundamental computing power transforms the store of value and medium of exchange into a decentralized global computing engine and publicly verifiable data store .”
How does it work?
Ethereum operates through a global network of computers that work together as supercomputers. The network assembles and runs smart contracts. These applications are theoretically independent from any third-party interference or censorship because the blockchain is tamper-resistant. Smart contracts run exactly as programmed, greatly reducing the risk of fraud. They are executed automatically, Cross chain bridge development like an ATM or vending machine that digitally enforces the terms of a contract. Once certain conditions are proven to have been met, such as payment transfer, the item will be shipped or offered to the buyer.
How to use Ethereum?
So far, we’ve discussed what Ethereum is and its incredible power as a decentralized network. But what can you do with it? Remember that Ethereum is an open source platform that uses blockchain technology to create and run dapps. These dapps are designed to bypass the middleman in traditional applications. Using dapps built on Ethereum, users can directly sign agreements and transact with each other, buying, selling, and trading goods and services without a middleman. For example, typical DeFi (decentralized finance) lending applications allow users to bypass banks to seek loans or borrow money. Smart contract applications can skip lawyers drafting sales contracts, and even ICOs, STOs and IDOs now launched on Ethereum can help startups and established companies raise funds through crowdfunding rather than through crowdfunding sites or traditional IPO or equity financing. These are just some of the applications of Ethereum.
Learn how Ethereum powers the DeFi ecosystem.
DeFi has quickly become the most powerful use case for blockchain networks, not just Ethereum. After DEXs, the DeFi industry exploded in 2020 — decentralized exchanges started a new revolution in how assets can be exchanged using non-custodial methods. Uniswap is probably the best name I can think of. Within two years of its launch, it quickly grew into a unicorn whose codebase was forked many times by other exchanges such as 1inch, SushiSwap and even non-Ethereum-based DEXs such as PancakeSwap.
DeFiPrime website, presenting 209 reliable DeFi dapps generated in various fields. From asset management tools like Dharma, Enjin, Instadapp, Metamask, to alternative savings apps like Linen app, Voluto, and Pooltogether, Ethereum dapps are disrupting mainstream finance with DeFi. Other areas of Ethereum dapps are also worth looking into. For example, DeFi derivatives platforms like Synthetix control $1 billion worth of synthetic assets that mimic the prices of real-world assets and commodities such as real estate, precious metals, fiat currencies, and more. Other DeFi derivative platforms include mStable, Hegic, DeFiPulse Index, etc. Other areas include yield aggregator platforms (like Eager Finance, Frontier, Plasma.Finance, etc.), DeFi infrastructure and development tools (like Chainlink, The Graph, Bancor Protocol, Ren, etc.).
Ethereum-based DAOs, DeFi insurance, asset tokenization, KYC and identity, decentralized lending, markets, prediction markets, stablecoins, analytics, and more, are areas where Ethereum is currently impacting, and innovators are building amazing s application.
Criticism of Ethereum
Ethereum has been growing, but not without problems. The largest smart contract blockchain network has experienced highs and lows since its creation. One of the strongest criticisms of Ethereum is its inability to scale. Ethereum can only facilitate a maximum of 15 transactions per second (tps), which is a far cry from Visa’s up to 20,000 tps. Once the Ethereum network reaches maximum capacity, gas fees (transaction fees paid by network users like dapp developers or regular users in ETH — Ethereum’s native token, just like BTC is the Bitcoin network’s native token) will soared to unreasonable levels. Critics of ethereum argue that ethereum cannot achieve its “world computer” goals, Build a cross chain bridge when in fact it cannot compete with payment networks like Visa, more talk about powering heavy platforms like Google, Facebook, YouTube and other mainstream platforms .
Ethereum’s future
Despite the above shortcomings, Ethereum does have unlimited prospects. It is already planning to transition from proof-of-work consensus to proof-of-stake known as Eth. 2.0. After a successful transition, Ethereum is said to be able to handle up to 100,000 tps, drastically reducing network fees.
One such example is Polygon, formerly known as the Matic Network. The polygon layer on Ethereum makes it a settlement layer with transaction costs as low as $0.00005, while Ethereum sometimes costs as much as $100. Other Layer 2 solutions, such as rollups and Arbitrum, are also actively exploring options on how to help Ethereum scale and solidify its world computer goals.
