Ethereum is an open-source software platform based on blockchain technology. The platform allows developers to create and deploy decentralized applications (dApps) such as Status or Metamask. This project has great popularity among investors. ETH wallet like Sapien Wallet helps investors to store their Ether tokens.
What is Ethereum (ETH) and who created it?
Ethereum was first conceptualized in late 2013 by Vitalik Buterin, who proposed a WhitePaper titled “Ethereum: Next Generation Smart Contract & Decentralized Application Platform.”
In this WhitePaper, Buterin introduced an entirely new concept of blockchain technology, describing Ethereum as a distributed global computer for running and storing computational programs.
Following the WhitePaper release, other developers and blockchain enthusiasts joined Buterin to make Ethereum a reality. Then, in early 2014, Dr. Gavin Wood, Joseph Lubin, and Jeffrey Wilk began working on Ethereum. They are recognized as Ethereum`s founders.
The team held a public sale of tokens of the project’s own cryptocurrency “Ether” (ETH) in 2014. They raised over $18 million, making it the largest token sale in history at the time. After selling tokens almost a year later, the Ethereum network finally went live on July 30, 2015. Ethereum is still in intensive development.
Why Ethereum is popular?
Ethereum blockchain enables everyone to take full advantage of distributed ledger technology for specific tasks. After the emergence of the Ethereum system, it is no longer necessary to create a personal crypto network. For a relatively small fee, you can take advantage of an off-the-shelf solution.
Tens of thousands of computer applications written in different programming languages could now run and interact with each other on a single site, greatly expanding the scope of blockchain technology applications. According to Vitalik Buterin, Ethereum is the new Internet, with all its possibilities and unlimited prospects. Smart contracts, the idea of which was suggested at the end of the last millennium by Professor Nick Szabo, are the “secret ingredient” of Ethereum. Smart contracts perform an if-then operation.
Thus, every qualified programmer can create his or her own application based on the Ethereum ecosystem, working according to a strictly established algorithm. The system guarantees protection from crashes and intruders, no censorship, and non-interference from external regulators. If one of the nodes serving this smart contract fails, the application will switch to another node and continue to run stably. The information received during the execution of the smart contract will remain unchanged, thanks to the system of distributed storage on thousands of nodes.
The functionality of the Ethereum network allows:
- Run smart contracts of increased complexity to manage supply chains.
- Create any type of application (games, utility programs, etc.).
- Digitize physical assets (oil, gold, industrial goods).
- Manage customer identification and document authentication services.
- Organize decentralized trading platforms.
- Theoretically, it is possible to launch e-voting on the Ethereum blockchain.
In addition, there are many ICOs based on the Ethereum platform, for which a single standard of issued tokens called ERC 20 was developed. The acronym stands for “Ethereum Request for Comments”. The ERC 20 standard ensures that all projects meet fixed security standards and guarantees their stability within the network.
Ethereum ecosystem triggered a boom in the ICO market. Every user can issue his or her tokens according to predefined parameters. It is necessary to follow the rules of the ERC-20 standard to ensure the normal interaction of personal virtual assets with the rest of the system.
Launching a personal blockchain project based on Ethereum is fairly easy and relatively inexpensive. The organizers of new startups took advantage of this. And now there are thousands of applications running on Ethereum with original tokens. Teams of young crypto projects sell their tokens to investors in the same way that regular businesses sell their shares.
The network’s secondary product is ETH, a currency that serves as a consumable to secure smart contracts. The developers believe that ETH is a digital fuel that supports the functionality of the virtual machine. When a new program is activated or a transaction is executed, the network processes the data compiled into “byte code,” which the virtual machine decrypts and executes. Thanks to EVM, applications that are written in different computer languages can effectively communicate.
How does ETH work & where can I get ETH wallet?
ETH token has good liquidity, it can be easily exchanged for other cryptocurrencies or fiat. ETH is available both on major exchanges, which require mandatory customer registration, and at small exchanges offering instant conversion without unnecessary questions. The question of how to create an ETH wallet is very popular. It is better to store this cryptocurrency in non-custodian wallets. Advantages of non-custodian ETH wallet:
- High level of security for users’ interests protection.
- The maximum speed of information processing.
- Maximum openness.
Sapien wallet accepts a lot of different cryptocurrencies. It does not contain any hidden information. In the long term, it is better to store coins in a non-castodian Ethereum wallet. There are many special wallets for storing this currency like Sapien wallet.
What stands behind Ethereum?
The question of what is Ethereum backed by, just like Bitcoin or other coins of decentralized networks is being asked for many years by newcomers.
Any money has to be backed by an appropriate amount of commodity. The dollar has no such security. This “money”, cash and non-cash, are the unsecured currency of the world. But since almost all nations and their residents keep their assets and savings in U.S. dollars, its use in mutual settlements has become the accepted norm.
The Ethereum platform makes it possible to do without intermediaries in transactions, protects against outside interference and censorship, ensures immutability and security. Ethereum coins are created according to a strictly defined algorithm embedded in the system’s software code, and all transactions are protected by a cryptographic signature.
The system automatically examines the terms and circumstances of the transaction and analyzes its security. Transactions are also executed without human involvement, smart contracts on the Ethereum platform are considered executed after being confirmed by the other party. The results of the execution are recorded in a public registry.
The capabilities of the Ethereum network are of interest to big businesses, and a global EEA (Enterprise Ethereum Alliance) community has already been created. Its structure includes more than 15 technical, industrial, and legal advisory groups. The EEA has more than 200 companies from more than 40 countries as members, including:
- JP Morgan.
All members are actively exploring opportunities to build a global blockchain economy.
What are the advantages of Ethereum?
- Open Source and Decentralization
Ethereum runs decentralized on thousands of computers distributed around the world. No one owns or controls Ethereum, its code and technology are freely available and open source.
- Resistance to censorship
No government or company controls Ethereum because it is decentralized. This decentralization makes it nearly impossible to prohibit you from receiving payments or using Ethereum services.
- Peer-to-peer network
Ethereum operates in a peer-to-peer (P2P) network in which you can transfer money or make agreements directly with someone else without using a third party or intermediary.
- Smart contracts
Ethereum blockchain has programmable code with smart contract functions, which means that the code will execute if certain conditions are met. This allows developers to create and deploy new decentralized applications.
- Default compatibility
Ethereum-based products and applications are compatible by default, so companies and developers can build on each other’s success.