Computers and Technology

What Is the Ethereum Blockchain? Its Features and Applications.

Today Ethereum is the second most valuable cryptocurrency globally after Bitcoin, with a $72 billion market cap and $1.5 billion single-day trading volume. The digital currency that kicked off the cryptocurrency revolution is becoming an established part of our everyday lives. It has created its economy and has proved to be a good source of investment.

ethereum 1 year price

No one can say if Bitcoin will remain the top cryptocurrency or people will switch to other cryptocurrencies. Will it continue its rise in value or collapse? Only time can answer these questions. But for now, Ethereum remains optimistic about its blockchain and the future. People are investing in it and yielding profitable results.  Ethereum has a bright future, and it is advisable to invest in digital currency.

If you have an interest in investing in Ethereum, we recommend you bookmark this article. We will continue to update it with new information and tools.

So, let’s start. What is an Ethereum Blockchain? Here, we will give you deep insights into Ethereum, its features, including its pros and cons.

What is Ethereum?

what is ethereum

As the name suggests, it is a public ledger of all transactions in chronological order. You can track specific tokens or general activity on the Ethereum platform. The most important feature of the ethereum blockchain is that it stores data in smart contracts. It ensures the trustless exchange of information between entities.

Why do we call it an open-source network?

As a public ledger of transactions, Ethereum encourages transparency and accountability. It generates trust between the involved parties. This way no one can alter any data once we add it to the blockchain. 

Top Features of Ethereum

  1. Ether- It is a digital currency or asset used in Ethereum for transactions and paying fees to miners. On the one hand, ether is a cryptocurrency, but on the other hand, it’s also a blockchain software which many businesses use for many different applications.
  2. Smart Contracts- It enables people or companies to exchange money, property, shares, or anything of value transparently and securely while avoiding the services of middlemen like lawyers, banks, or other financial intermediaries. 
  3. Ethereum Virtual Machine (EVM)- It is the primary software that runs on the blockchain to make sure that smart contracts are executed as expected without any problem. The EVM is Turing complete. This means it can run every program created by a standard computer designed for this purpose.
  4. Decentralized applications (Dapps)- An application that runs on the ethereum blockchain platform, decentralized applications are open-source and operate autonomously.

Dapps

Real-Life Applications of Ethereum

  1. Decentralized Finance- Financial markets are being revolutionized with the development of decentralized finance or “DeFi” services. Examples are lending protocols, prediction markets, derivatives, and security tokens offered through blockchain technology.
  2. Decentralized autonomous organizations (DAOs)- companies that run without the control of a centralized authority led by an elected leader or CEO. DAOs exist on the blockchain in the form of distributed apps.
  3. Non-Fungible Tokens (NFTs)- These are unique tokens according to their specific properties, making them more valuable than fungible assets is very famous among gamers who love this concept. 
  4. Health Applications- Blockchain technology has effectively shared information across various healthcare providers.
  5. Digital Identity- One of the significant concerns with digital security is the availability of fake identities, which are being used for online frauds or other crimes. Blockchain will create a digital identity that users can verify before starting any transaction, making it reliable and non-repudiable.
  6. Education- Blockchain is progressing in the education sector, offering a digital ledger for the storage and sharing of records, certificates, and degrees.
  7. Industry 4.0- Efficient collaborative networks can lead to improved automation activities, which will very soon transform the industrial landscape as we know it today.
  8. Property Rights- In several countries, title deeds are recorded manually, resulting in loss of paperwork and verifying identity challenges. Blockchain can prove ownership as it is a digital ledger that no one can alter.

Pros of Etherum

  1. Large, Existing Network- The Ethereum blockchain is the second most popular in terms of the total value of its native cryptocurrency (Ether). As a result, it has access to the biggest platform for decentralized applications. 
  2. Constant Innovation- Ethereum has hosted thousands of ICOs and other token sales, successfully raising more than $24 billion. As a result, many projects will be based on the platform or used for transactions until they succeed. 
  3. Wide range of functions- Ethereum has proven to support smart contracts and other decentralized applications without any problems. The blockchain even allows developers to build their tokens on its network.
  4. Avoids Intermediaries- By cutting out middlemen like advertising companies, payment processors, and centralized servers, blockchain technology provides users with the ability to make transactions directly without any interference by third parties.
  5. Allows the creation of new tokens- Ethereum’s software provides a way for developers to create their tokens based on its blockchain, which you can use for ICOs.
  6. Revolutionary- Ethereum has the potential to completely revolutionize the way that people use the Internet by providing online access, security, and privacy to avoid censorship. 
  7. Gives users direct power- Ethereum’s community allows developers and consumers to be involved directly in the development of blockchain services without centralizing control.
  8. No requirement to download additional software- As long as a user has access to an Internet connection, they can use Ethereum immediately because it is software that acts like other web browsers.

Cons of Ethereum

  1. Rising transaction costs- The cost of sending ethers (ethereum currency) has been on the rise lately, which has worried several businesses and platform users. 
  2. Steep learning curve for developers- For a layperson to understand ethereum well, they will need to take a lot of time studying the code and understanding what’s going on behind it. It is tough to achieve even for a couple of months. 
  3. Potential for crypto inflation- If people decide to misuse the decentralized applications running on the ethereum blockchain, they could be creating new tokens increasing the total supply in circulation, and making it easier for hackers to steal coins and other issues if not fixed immediately.
  4. The future is unknown- Even if ethereum is widely adopted, there are several questions about its future. Will it scale up transaction numbers and keep the costs low? Will people stop producing new tokens to maintain a particular value of ether?
  5. Still in Development- Ethereum is still in the developing stage. Experts are yet to solve or identify several bugs. 
  6. Turing Complete language – The Turing Complete language implemented by ethereum functions similarly to a computer. That means we can trace every computation, and nothing is private, making things like privacy coins impossible. Breaking of this language can comprise the entire chain. 

Closing Thoughts 

Ethereum blockchain is a decentralized platform that runs smart contracts. These are applications that run exactly as programmed without any possibility of downtime, censorship, fraud, or third-party interference. 

These apps run on a custom-built blockchain. It is an enormously powerful global infrastructure that can move value around and represent property ownership. It enables Ethereum developers to create markets, store registries of debts or promises, move funds following instructions given long in the past (like a will or a futures contract), and many other things that have not been invented yet, all without a middleman or counterparty risk. 

So, if you’re considering investing in Ethereum, just be aware that it is still very much a work in progress. It has a long way to go before it can reach its full potential.

Also Read:

Impact of Blockchain on mobile app development

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