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Ethereum (ETH), one of the most far-reaching blockchain projects currently underway, aims to decentralize a wide variety of products and services in addition to monetary transactions by utilizing cryptocurrency.
Ethereum takes a different approach than Bitcoin, which aims to serve as a digital equivalent of gold. Instead, Ethereum is designed to be more general, allowing its users to create any number of unique assets and programs to govern how they are used.
This has led to comparisons that:
- Bitcoin is more like email, which is a very powerful tool for a specific purpose.
- On the other hand, Ethereum is more like a web browser since its goal is to let users create and interact with programs.
Ethereum to USD Chart
In a time when many cryptocurrencies have struggled to generate even a single use case, Ethereum may be unique in the sense that it has successfully navigated several distinct phases of high demand.
“Smart contracts” is the name given to these multi-step computing functions that are carried out on Ethereum. Decentralized applications, or dApps for short, are larger constructions that are comprised of many individual smart contracts.
During the most recent wave of innovation on the network, known as decentralized finance (DeFi), entrepreneurs have been using Ethereum to create protocols that are analogous to conventional financial services.
Among these have been projects such as MakerDAO, which developed a protocol to decentralize the management of a cryptocurrency that is pegged to the United States dollar. Other DeFi projects have sought to automate and decentralize financial services like lending and borrowing.
Even though these programs aren’t very advanced at the moment, there is a theory that they could one day be used to develop software that simulates the actions of the most successful internet corporations in the world.
In this sense, Ethereum can be understood as an early attempt to use cryptocurrencies to create competitive markets governing different aspects of these currently monopolistic services. These markets would govern different aspects of the cryptocurrency industry.
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Who is the creator of Ethereum?
Vitalik Buterin, a Russian-Canadian who was only 20 years old when he conceived the idea, is the founder of Ethereum. Buterin says that he was inspired to make Ethereum when he realized that Bitcoin’s design might be able to be used in a broader way to reduce the pains of centralized web services.
Buterin began the process of establishing a nonprofit organization to assist in the launch of the project. An online crowd sale conducted by the Ethereum Foundation resulted in the sale of 72 million ETH and brought in approximately $18 million in revenue for the initiative.
How does Ethereum make money?
When creating new tokens or decentralized applications on the Ethereum network, developers are required to pay a fee to the Ethereum network.
They carry out these transactions using Ethereum’s in-house currency, which is ether. This charge is also sometimes referred to as “gas”.