Unless you live under a rock, you have heard how 2020 was a record year for cryptocurrency. The price of different types of digital currency went up to the moon. There’s a system that makes this all possible.
Blockchain technology is a ledger that records the provenance of a digital asset. Ethereum is a cryptocurrency that works on this type of technology. It works on the Ethereum blockchain.
You must know how the Ethereum blockchain works to invest in this crypto. Read this article to learn more about this concept.
What Is Ethereum
Ethereum is one of the thousands of cryptocurrencies that exist. It made its debut in 2015. It’s now the second most popular crypto, after Bitcoin.
A unit of Ethereum is an ether. You can use it to buy and sell goods and services. You can also use it as an investment or as a store of value.
Ethereum is unique as it has other uses. It can power different applications like smart contracts and digital apps.
Ethereum was the first blockchain to discover smart contracts. Now, one can use the Ethereum blockchain network to implement these agreements. This innovation helped open the door to other decentralized applications.
What Is Ethereum Blockchain
All these functions are possible because of blockchain technology. It’s a distributed ledger technology that manages and tracks the currency. You can think of it as a running receipt of every transaction involving Ethereum.
There are computers in this network that serve an important function. They help to verify the transactions. This ensures the integrity of the data.
This is still a decentralized network. It’s part of the appeal of Ethereum that makes it popular among users. The exchange of money can take place without the presence of a central intermediary. There’s no need for a bank, so one can think of it as autonomous.
Ethereum vs. Bitcoin
Ethereum and Bitcoin are the two most popular cryptocurrencies. Both rely on a blockchain to store and secure transactions.
There are key differences between both. The nodes in the network of computers keep track of the network’s “state”.
As of now, both the Bitcoin and Ethereum blockchains use “proof of work”. Ethereum will change this consensus algorithm to a new one. Ethereum blockchain will soon use a “proof of stake” system.
This change will provide significant benefits. Many believe the new Ethereum blockchain will use less energy. Many also believe the transition will cause the price of Ethereum to soar.
Want to learn more about the differences between Ethereum vs Bitcoin? Click the link to learn more.
Learning About the Ethereum Blockchain
If you’re looking to get into the cryptocurrency market now is your chance. You can invest in Ethereum.
Before you do, you must understand how the Ethereum blockchain works. You’ll learn how the Ethereum blockchain technology makes Ethereum transactions possible.
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