The New Ethereum Blockchain; What Should You Know About It

It is no doubt that the cryptocurrency world is dominated by the same entity which started it all –Bitcoin. The coin is not only the oldest but also the best known and most valuable digital currency that exists today. However, the only crypto that has come close to Bitcoin based on these features is Ethereum. It has received tremendous growth in value in recent times. In the last 12 months, the price of Ether, the coin which powers the Ethereum network has increased almost sevenfold and is now valued at above $2,700.

If you have been thinking of investing in Ethereum or wish to know a little bit more about the decentralized blockchain system, this post will be of great help to you. So let’s see what’s in it for you.

What Exactly Is Ethereum?

For people new to the world of cryptocurrency, it is best to define Ethereum in the most basic way so as not to cause any confusion whatsoever. So, we can say Ethereum is a platform that generates ether, a coin that can be transferred between accounts and used as a cryptocurrency. But for an expert, Ethereum would be defined as a public open-source blockchain-based distributed computing platform with the feature to deploy smart contracts.

The History of Ethereum

In 2012, the young Vitalik Buterin was just 17 years when his father introduced him to Bitcoin. He became very interested in its technology and hence started writing for Bitcoin Magazine, suggesting various ways the platform can be improved. He was skeptical of bitcoin limitations and suggested that there has to be a new scripting language to make the platform better. However, when these improvements were not made, Buterin decided to create his own cryptocurrency. And that was what lead to the birth of Ethereum.

In 2014, Ethereum was announced and received global acceptance in 2015. Since then, Ethereum price has gone up a lot and more and more people are daily investing in it for a better future.

The Developmental Stages of Ethereum

Right from the time it was created up till today, Ethereum has experienced four different developmental stages, including the Frontier, Homestead, Metropolis, and the Serenity stage. The Frontier stage depicts the time when users could buy and sell Ethereum and perform basic cryptocurrency functions. The Homestead stage happened in 2016 and represented the first stable Ethereum release.

The third developmental stage, the Metropolis, aims to introduce zk-Snarks and a decrease in the miner reward. The fourth and final stage is the Serenity stage and represents the transition of the platform from a Proof of Work to a Proof of Stake system. Things look like it’s going to change soon and we might be experiencing the next developmental stage of the platform soon.

What Should You Know About Blockchain?

Ethereum has created a version of the internet where clouds and servers are being replaced with a network of systems called nodes. The nodes are responsible for storing and maintaining a shared database called a blockchain. The node system of the network makes it more secure as information entered into it isn’t stored on your computer or in a central server.

It is near impossible to hack this kind of system because the information held on the blockchain network is verified by consensus. That means more than half of the nodes must agree that the information is correct before it is allowed onto the blockchain.

However, Ethereum wasn’t the first to use blockchain technology. Bitcoin invented it but Ethereum is also using and improving it in some incredible ways. So let’s look at what the Ethereum blockchain looks like.

The New Ethereum Blockchain

As earlier mentioned, the Ethereum blockchain employs similar technology to Bitcoin, but in a more advanced way. Ethereum blockchain is doing much more than the bitcoin blockchain in two major ways: smart contracts and dApps.

Smart contracts

Smart contracts are an essential part of what Ethereum stands for. The network is designed so that transactions can only happen when certain conditions have been met. It provides a sense of trust on the platform. You don’t need to trust individuals on the network – if the conditions of a contract aren’t met, then the transaction won’t happen.

For instance, imagine a vending machine. If John wants a candy bar from the machine, he has to have enough money for it, or else he won’t get the candy bar. So a smart contract can be written for the transaction to look like:

If john puts $1 in the vending machine THEN the vending machine will give John a candy bar. The conditions set for any transaction have to be met before anything can happen.

dApps

dApps simply stands for decentralized applications and refers to applications that run on a blockchain rather than on a traditional central server. dApps are at the core of Ethereum’s beliefs and design. The founders want users to learn Ethereum and hence build on it. The platform encourages developers to create new and exciting dApps.

Ether: The Currency of Ethereum

If you are thinking of investing in Ethereum, ether is another term you will need to familiarize yourself with asides smart contracts. Ether is the currency of Ethereum. It is the coin that fuels the Ethereum system. If you want to get anything done on the system, you will need some Ether to make it happen. Furthermore, the bigger the job you want to be done, the more Ether you will need for it.

What Is the Difference Between Ethereum and Bitcoin?

It is not uncommon to see people try to compare Ether to Bitcoin, which is why the question like Bitcoin vs Ethereum is common on the internet. Let’s take a quick look into how these two differ.

Bitcoin

• Bitcoin blockchain allows manual peer-to-peer transfer of digital money. That means if Peter wants to pay Paul 10BTC to paint his house, he can simply use Bitcoin to make the payment. All he needs to do is to send 10BTC to Paul.
• There is a cap to how many Bitcoin can be in circulation. Not more than 21 million BTC can exist.
• It can take up to 10 minutes for a bitcoin transaction to be confirmed.

Ether

• Ether is what is used as Ethereum currency and that is what fuels the automated smart contracts on the Ethereum network. As in the example given for bitcoin, Peter won’t send ether to Paul for painting his house. He will simply create a smart contract that only releases payment to Paul after he has completed the painting job. In this case, Paul can’t cheat – if he doesn’t complete the job, he won’t get paid.
• There is no cap as to how much Ether can exist
• Ethereum transaction is relatively quick. It takes just a few seconds to create ether-fueled smart transactions.

Is it a Good Idea to Invest in Ethereum in 2021?

Considering how Ethereum has been behaving over the years, one will agree that 2021 could be a great year for anyone to invest in Ethereum. The year is already off to a bullish start for Ethereum as demand for the token increased tremendously, making the coin reach a new all-time high above $2,000 per ETH. The platform has grown really well with the recent influx of newcomers into it showing a very little chance of anything beating it.

Ways to Invest in Ethereum

If you really want to invest in Ethereum, there is a couple of ways you can do that. You can use the buy and hold strategy. This seems to be a very simple way to invest but also poses the most risk due to the explosive price action that does happen in the crypto world. For instance, at some point, Ethereum was traded for about $1,400 per token but eventually dropped to just $80.

Whereas, in 2019, the price rallied from $80 to $380 but fell back again to $90 in 2020. Even though the coin is presently enjoying good time price-wise, it could turn around any time, that is why following the buy and hold method may be a very risky one.

On the other hand, you can choose to trade with the coin. That means if you buy at the low time and sell at high, you will be making a good profit from your investment. And if you can put this on CFD trading, you will have a better chance than just doing spot trading.

How Much Can You Invest in Ethereum?

Presently, 1ETH is priced at around $2,700. But even at that, you can purchase a fraction of Ethereum on most trading platforms or exchanges at a very low minimum. That means there is actually no minimum amount you can invest in Ethereum. However, always bear in mind that you shouldn’t invest more than you can comfortably afford to lose.

Where to Invest In Ethereum?

Buying and investing in Ethereum is now very easy. With just a couple of clicks on most exchanges, you can buy your coin. But you can use a platform like Anycoin Direct when looking to buy your Ethereum. It is quick and very easy there – with just a few clicks, you are done!

In addition, the platform offers valuable information on Ethereum and other cryptocurrencies to help you achieve the best with your investments.