Ethereum is a decentralized software platform that also created a cryptocurrency called Ether (ETH). The latest Ethereum price is US$4,429.03 or around Rp. 63.3 million.
The crypto world is growing rapidly. The emergence of Satoshi Nakamoto’s Bitcoin in 2009 prompted other inventors to create more types of cryptocurrencies.
According to CoinMarketCap data, there are currently 7,812 cryptocurrencies. One of the cryptocurrencies that compete closely with Bitcoin is Ethereum. According to the Forbes website, experts predict the price of Ethereum could reach US$5,000 per ether before the end of 2021 and skyrocket to over US$50,000 by 2030.
What is Etherium?
Ethereum is a decentralized software platform that allows Smart Contracts and Distributed Applications (DApps) to be built and run without downtime, fraud, control, or interference from third parties. This definition is contained in the book Digital Economics and Business.
Citing Cryptocurrency Trading and Investment Fundamentals, Ethereum itself is building a blockchain network focused on Ethereum coins. Coin developers can create their coins on the Ethereum network.
The History of Ethereum
History of Ethereum Citing the book Ethereum for Dummies, In 2013, Vitalik Buterin, co-founder of Bitcoin Magazine, released an official report proposing a new, more functional blockchain implementation. The proposal was the forerunner of the Ethereum blockchain.
After attracting large crowds and gaining technical and financial support, the Ethereum Foundation was created. This is a Swiss non-profit organization that developed Ethereum. Apart from being a type of cryptocurrency, Ethereum features smart contracts to ensure integrity across all nodes. Any code executed on one node is executed the same way on all nodes. The system allows Ethereum to deploy various applications.
Referring to the book Mastering Ethereum, the Ethereum platform allows developers to build powerful decentralized applications with built-in economic functions. Ethereum is capable of providing adaptability, transparency, and neutrality. Ethereum also reduces censorship and certain risks. Based on the book Blockchain & Cryptocurrency in Legal Perspectives in Indonesia and the World, Ethereum conducted an initial coin offering or ICO from June 2014 to August 31, 2014. The target for raising funds at that time was the US $ 16 million and was achieved within the specified timeframe.
The Etherum platform gave birth to a cryptocurrency called Ether (ETH) and began trading on August 7, 2015. Its price at that time was US$2.83 or around Rp. 41,035 per chip. Bloomberg reports that Ethereum began to be in demand in 2017 when initial coin offerings or ICOs became popular.
The price at that time reached the US $ 1,200. Ethereum’s popularity soared in 2020 as decentralized finance (Defi) projects flourished. Many startups are interested in Ethereum. Its role is as a financial pillar, managing loans and collateral without involving 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 the interview of Vitalik Buterin, co-founder of Ethereum, on the Hir.harvard.edu page, Ethereum works as a platform where anyone can upload codes called smart contacts.
Anyone can issue smart contacts or send transactions. The entire code can run on the blockchain. For example, if someone builds an app and someone else also creates an app, then the two apps can interact. The Ethereum environment is interconnected so the more people who join, the wider the network.
In short, the way Ethereum works with smart contracts is similar to that of a computer program that runs automatically according to the orders in the contract. Since it is programmed, no supervisor is needed. Smart contract features are cheaper to execute and even more secure.
Just like other cryptocurrencies, Ethereum uses blockchain technology. Blockchain technology is used to verify all transactions. These activities are recorded in a transparent and secure public ledger or public ledger that is instantly recognizable.
To be traded, the Ethereum currency called Ether has to go through a mining process, which 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 in financial transactions or as an investment.
Summarized from the Ethereum Mastering book, here are the Ethereum components:
- P2P Network: Ethereum runs on the main network.
- Consensus rules: Ethereum consensus rules are defined in the reference specification.
- Transactions: Network messages that include sender, receiver, value, and data payload.
- State Machine: Processed by the Ethereum Virtual Machine (EVM), a stack-based virtual machine that executes bytecode. EVM programs called “smart contracts” are written in a high-level language and compiled to bytecode for execution on EVM.
- Data structures: Stored locally on each node as a database containing transactions and systems in a serialized hash data structure called a Merkle Patricia Tree.
- Consensus algorithm: Ethereum uses the Nakamoto Consensus which uses a single sequential signature block.
- Economy security: Ethereum currently uses a PoW algorithm called Ethash.
- Clients: Ethereum has several interoperable client software implementations.
Source : lifepal.co.id