What is Ethereum? – All You Need to Know This Cryptocurrency

Ethereum (ETH) is one of the top 10 virtual currencies in the world (according to Coinmarketcap ).

In fact, the ethereum coin has maintained its rank at #2 for a very long time.

Currently, ETH and Ripple (XRP) are competing for the 2nd place on the ranking of the top coins in thousands of cryptocurrencies in Coinmarketcap.com.

What is Ethereum Coin?

Ethereum (ETH) is a contract electronic money , a computing platform nature scattered, public, open source based running on  technology Blockchain , through the use of smart contract (Contract intelligent) facilitate online contractual agreements. 

The platform includes a fully Turing virtual machine – the Ethereum Virtual Machine (EVM), which can execute scripts using a network of Ethereum computers.

Ethereum can be moved between accounts and used as a reward for miners for solving ETH algorithms. 

“Gas” is an internal transaction pricing mechanism, used to reduce spam transactions and distribute resources on the ethreum network (ETH network). According to Wikipedia.

Who is the creator of Ethereum?

Ethereum was proposed in late 2013 by  Vitalik Buterin , a cryptocurrency researcher and programmer, an extremely young genius. This is the co-founder of Ethereum, then Vitalik Buterin was a 24-year-old guy.

In December 2013, Vitalik started sharing a white paper outlining the ideas behind Ethereum, a few people saw this first sketch and were immediately hooked, setting the stage for later Ethereum development.

Currently, Vitalik is still the core developer of etherum.

Ethereum development was initially funded through crowd funding during July and August 2014.

ETH was launched on June 30, 2015, and has gradually gained popularity. Starting from the end of January 2016, the coin experienced a spike in price.

In March 2016, less than a year since its inception, the growth culminated as the coin reached a market capitalization of over $1 billion.

Unlike the father of Bitcoin – Satoshi Nakamoto , Vitalik Buterin is a famous face in the community pre-coding and blockchain community. A real character, not anonymous.

So why did Vitalik Buterin have the idea to create etherium cryptocurrency? Because of a passion for technology or a startup idea? The answer has been answered by us in detail in the article:  A Brief History of Ethereum. From Vitalik Buterin’s concept to release .

4 stages of development of Ethereum

According to the plan, Ethereum will be divided into 4 main stages of development including: Frontier, Homestead, Metropolis and Serenity.

Each stage of development may include sub-releases, known as “ hard forks ” (changing functionality in a way that is not backwards compatible).

The hard forks are codenamed: “Ice Age”, “DAO”, “Tangerine Whistle”, “Spurious Dragon”, “Byzantium” and “Constantinople”. All stages are listed below with hard fork dates:

Stage 1: Frontier

The initial test phase of ethereum, lasted from July 30, 2015 to March 2016.

Hard fork: Ice Age – introduces an exponential increase in difficulty, promoting the transition to a Proof-of-Stake algorithm .

Stage 2: Homestead

The 2nd phase of ethereum launched in March 2016.

  • Hard Fork 1: DAO  – Attack of DAO is pretty famous and shook the tech world as well as financial investors worldwide. This is a hard fork reverting the entire DAO contract that has been hacked by hackers, causing Ethereum to split into two competing systems, Ethereum and Ethereum Classic .
  • Hard Fork 2: Tangerine Whistle  – Change the “gas” calculation for heavy computations and remove cached states from a denial of service attack.
  • Hard Fork 3: Spurious Dragon  – Improved resistance to replay attacks … and some other improvements, you can refer here .

Phase 3:  Metropolis

Currently we are at the Metropolis stage, there are planned to have 2 hard forks, Byzantium and Constantinople. Byzantium went into effect in October 2017 and Constantinople is expected to undergo a hard fork in mid-2018.

  • Hard Fork 1: Metropolis Byzantium  – Improves privacy, scalability, and security properties of ethereum.
  • Hard Fork 2: Constantinople  – The 2nd hard fork of the Metropolis phase, the algorithm transition from proof-of-work to proof-of-stake and a few other changes.

Stage 4: Serenity

Is the final stage of ethereum and still has no expected release date.

Features of Ethereum

Learning about Ethereum, we will see that it is different from Bitcoin and other cryptocurrencies in that it is made up of 4 main elements and also the most important parts of Ethereum: Ether, smart contracts, Ethereum virtual machine and account.

Ether:

Is the currency of Ethereum. It is used for trading at exchanges that allow the use of cryptocurrencies. In addition, this coin can also be used to pay for other services on the Ethereum network

Smart contract:

A smart contract is the creation of terms and conditions between two parties to a transaction without the need for an intermediary, drafted by technical means.

Blockchain system:

When the information about the address, ether number, transaction between users is finished, it will be transferred to the Blockchain system to be the database for the next transactions.

Consensus system:

An unintentional, sudden encryption program to protect user information and their transaction numbers more carefully and securely.

Miners:

Simply put, miners are the people who are tasked with decoding the personal data of both buyers and sellers. At the same time confirm the transaction between the two parties.

Ethereum Virtual Machine:

This is the “place” to operate the information processing of the computer network provided. Organizations and individuals specializing in information processing will gather in this “house” and then divide and decode Blockchain data.

Programming language:

The Ethereum platform allows importing and processing codes of most popular programming languages ​​such as Haskell, Python, C++, Java, WebAssembly, PHP…

The amazing growth of Ethereum

Bitcoin experienced a growth boom in late 2013 – early 2014 when its price reached an all-time high. Initiate growth for hundreds, if not thousands, of other alternative cryptocurrencies (altcoins) to follow.

A number of altcoins have enjoyed some success, but none have enjoyed great growth like Ethereum.

The platform even caught the attention of Microsoft , when it launched “Ethereum-Blockchain-as-a-Service” (EBaas) on the Microsoft Azure platform in November 2015.

Now, the reader may be wondering: Why is all of that possible?

Why is Ethereum so attractive?

Well, in short: Ethereum (ETH) is decentralized like Bitcoin but with more potential than Bitcoin .

Bitcoin’s peer-to-peer (p2p) network method is decentralized and decentralized, where each participant is a client and also a server, allowing for enhanced security and resilience of the network.

In the traditional system, where the entire network is handled by a single server entity, that centralization becomes a weak point, the network can be exploited by attackers.

On the other hand, a decentralized network is:

  • Good resistance to hacker att
  • acks
  • Not paralyzed, even if some of its parts are paralyzed
  • Not operated by a specific group of people (having a person/group of people managing the entire network can cause problems intentionally and unintentionally, due to the human factor).

In addition to all those characteristics, one of the most important features of blockchain, and extending further to Bitcoin, is data integrity.

The record of each transaction ever made in the Bitcoin network can be accessed by anyone, can be easily tracked with the identity of the sender and receiver (but not their actual identities), and is not may change.

So no one can cheat each other, for example, by spending money they don’t really have.

Here’s how Bitcoin works, in case you haven’t known the outside world for a few years.

These advantages are important to the payment protocol, but some developers are quick to realize that the benefits don’t stop there.

Basically, in any field that needs to keep a record of data, you can do it more securely and efficiently with blockchain:

  • Domain;
  • Ownership records;
  • Business contract…
Ethereum timeline

Problem

So far, developers have tried to create new applications based on Blockchain in two different ways, both to no avail.

The first option is to build an application on Bitcoin. However, Bitcoin is not built on a Turing Blockchain – complete, i.e. it cannot solve problems that some well-known programming languages ​​can easily solve, like C++, for example. .

That involved technical problems and required the developer to come up with all sorts of “platforms” to make it work.

The other option is to develop, launch and promote an alternative Blockchain of your own, thereby losing the opportunity to utilize the immense power of the entire Bitcoin network.

Instead, you will have to run your own Blockchain, at a high cost.

Solution

Ethereum has addressed this distinction for the first time by integrating a purpose-built programming language with its own blockchain.

With them, anyone can think of any application, easily encrypt and give ETH to the network to implement the application.

Quite simply, Ethereum is a worldwide distributed computer with unlimited theoretical power.

A developer solves a solution and deploys it in the network. Then, the network itself does it, verifies its own outputs and distributes the value among the participants.

Applications run in a completely transparent manner, without any central authority interference, achieved with the help of smart contracts .

The last great thing is that the power of the network is limited only by the number and power of the computers connected to it, that is: there is no barrier to entry.

World Calculator

The potential uses of such a system are truly unlimited.

One of the more obvious options is to create a new cryptocurrency in just a few lines of code, and immediately launch it on the Ethereum Blockchain.

For that matter, any possible asset, such as a car, or a house, can be launched, and traded on a blockchain in the form of a token;

More sophisticated solutions include direct trading (eliminating middlemen fees in the process), some existing marketplaces, such as Facebook Advertising and Google Ads.

That can be achieved by creating smart contracts that link to all business processes including companies, and running them on the blockchain.

Another potential use for Ethereum is as cryptographic solutions for complex scientific tasks, such as astronomical calculations or protein folding for pharmaceutical companies.

Such applications will enjoy the theoretically unlimited computing power of the network, which cannot be achieved with even the most advanced supercomputers.

Even when there was a complete computer revolution, never thought of successfully implementing some project, for example Augur .

It is the “Distributed Forecast Market” , which is theoretically capable of providing predictions with more accuracy than the best experts in any given field (achieved through the use of principle of “wisdom of the crowd”).

Invest and earn money with Ethereum

There are two popular forms of making money with Ethereum: trading and mining ETH.

Buy and sell Ethereum (Ethereum Trading)

It is a form of transaction or “roughly” called business. Called a business, there must be a product and the product here is Ethereum (ETH).

The people involved in trading are called traders. Traders will participate in buying ETH when the price is low and selling when the price is high. The main difference is profit .

To trade & exchange Ethereum, you must go through the exchange and must have an ETH storage wallet. Please refer to some reputable Ethereum exchanges below:

Mining Ethereum

Ether mining is the earning of ETH by confirming transactions on the network. To put it more specifically, mining is involved in validating transactions, from which all activities in the Ethereum Blockchain will be confirmed.

When miners successfully solve ETH algorithms, they will receive a reward of ETH. Traders must calculate that the cost of mining etherum must be less than the reward received.

Profit = Reward (ETH) – The cost of mining ETH.

Instructions to convert Ethereum

How much is 1 ETH equal to? You can convert Ethereum to VND – btc/vnd, USD – btc/usd or other Coins or currencies at the website:  https://en.coinmill.com/ETH_calculator.html

You just need to enter the ETH number and click on “Convert”. Then you use the key combination Ctr + F and search for the currency you want to see.

Example : I want to know how much USD is 1 ETH, I press Ctr + F and enter the word USD.

Some currency symbols:

  • $ – US Dollar (USD)
  • £ – British Pound (GBP)
  • – Chinese Yuan (CNY)
  • € – Euro (EUR)
  • dd – Vietnam Dong (VND)

Compare Ethereum (ETH) and Bitcoin (BTC)

Ethereum can do everything that Bitcoin has done before. In addition, it has many new improvements and could be a huge success in the future.

Advantages of Ethereum over bitcoin:

  • Extremely fast block generation (about 14 seconds)
  • The transaction is very fast and the amount of Ether is unlimited.
  • Ethereum transaction fees are paid in Gas (convertible to ether), calculated based on algorithmic complexity, bandwidth usage and storage needs. Bitcoin’s transaction fees are equally competitive to get into Bitcoin’s block.
  • Early Bitcoin miners hold a large amount of Bitcoin in issue and with Ethereum 13% of the ETH is sold to the people who originally funded the project.
  • Ethereum is resistant to the use of ASICs and resistant to centralized mining using the Ghost protocol.

Cons : Ethereum is more vulnerable to attack than Bitcoin because Ethereum allows to run Turing-complete code.

The Future of Ethereum

Considering everything that has been mentioned so far, the reason Ethereum can be as successful as it is is pretty obvious.

And though at this point, the pace and scope of its future growth will depend on many factors.

Naturally, Ethereum is very promising with unlimited opportunities. However, we still have to wait and see what its future holds, with the network’s popularity increasing; This depends on the developers with their talent and creativity, how to come up with solutions.

Ethereum Expert Review

To help you better understand Ethereum, we decided to ask some experts in the field the following question: “ELI5: What is Ethereum?”

“Ethereum is the second Blockchain to surpass a billion dollar market cap and deploy secure mining power. Like Bitcoin, it is decentralized, but unlike Bitcoin, it is not used as a currency, as the supply of Ether digital tokens is not fixed. That’s because Ether is designed to create smart contracts, not a currency.

In a world where companies are all about Blockchain, Ethereum has become a distributed Blockchain that they feel more comfortable using, even though Bitcoin is more secure and has a longer history.

When corporations realize that private Blockchains don’t have much value, they will be able to choose between Ethereum and Bitcoin (for those of different economic backgrounds) to secure smart contracts.”

_Simon Dixon, CEO of BnkToTheFuture.com and Director of Bitcoin Capital Fund_

“Ethereum is related to Blockchains just like java is to databases: you store your data in a database and build your application in java. 

One of the key differences is that blockchains and the Ethereum platform run not on one but on many distributed servers.

They offer some unique features, such as the fact that transactions in a Blockchain cannot rollback, whereas all databases provide transaction processing and recovery mechanisms. data state recovery”.

_ Benedikt _

Major corporations behind Ethereum

According to updated data on July 18, 2017, among the big names behind Ethereum is the Enterprise Ethereum Alliance (EEA) founded by Microsoft, along with BNY Mellon, JP Morgan, CME Group… and many more. Other famous startups such as Nuco, BlockApps, Tendermint, Brainbot, Technologies…

Applications of Ethereum in life

Ethereum’s Blockchain technology focuses on creating applications based on Smart contracts to settle all transactions easily, quickly, economically, securely and publicly.

Applications developed on the Ethereum platform include:

  • Uport:  Provides users with secure and convenient control of their identity and personal information.
  • BlockApps:  Provides all the essential tools to create private, public or semi-public Blockchain applications…