What is Ethereum? (ETH)

Basic Guide About Ethereum (ETH) #

Ethereum (ETH) is the second-largest blockchain network in the world. This digital asset has been growing over the last years and it is now providing the industry with valuable solutions. If you want to know what Ethereum is, this is going to be the right cryptopedia guide for you.

In the next sections, we are going to share with you what Ethereum is, what is ETH and all the things you should know about it. Without further ado, let’s get into Ethereum.

What is Ethereum? #

Ethereum is not only one of the largest cryptocurrencies but it is also a decentralized blockchain network. Ethereum is a blockchain-based platform that allows developers to build blockchain-based applications. 

This means that if you want to build a blockchain application, you don’t need to create your blockchain from scratch, you can simply build it on top of Ethereum because that’s what it’s meant for. I like to think of Ethereum as WordPress or Wix is to websites. WordPress is a website that allows you to build other websites with ease.

The main characteristic of this network is that it works with smart contracts. For the first time after Bitcoin, a blockchain network provided users with the possibility to run smart contracts. 

Smart contracts are computer programs that execute specific orders. In order for these orders to be executed there should be a clear trigger. For example, a developer can create a smart contract that would be activated once the price of an asset reaches a determined price. 

In this example, the smart contract will follow by oracles the price of an asset. Once the price of this asset reaches the target stipulated in the smart contract, it will automatically execute. The order can be to place a market order in exchange, place a limit order or send a notification to some users, among other things. 

The possibilities are endless with smart contracts. This is perhaps why ETH is currently the second-largest cryptocurrency with a market valuation of $55 billion and a price per coin of $485. 

Is Ethereum A Currency

The currency of the Ethereum network is called Ether (ETH). This is the cryptocurrency that we hold in our wallets. It’s a utility token used to pay gas fees for executing commands on the Ethereum network. Its denomination is called GWEI. 

ETH Use Cases #

If you want to know what ETH is, then you need to know what this network can achieve. It is possible to use the ETH for a wide range of things. A few years ago, Moscow applied a blockchain voting system for citizens. Users could vote using a platform that was based entirely on ETH and smart contracts. 

Additionally, governments can also use blockchain technology. The Dutch government was exploring a wide range of solutions to make services more efficient. 

We can continue enumerating examples of how ETH is revolutionizing the world. Companies, governments and private individuals are leveraging the power of smart contracts. 

Decentralized Finance (DeFi) and Decentralized Applications (dApps) #

Ethereum has also been the network that allowed the expansion of decentralized finance and decentralized applications. Nowadays, the DeFi market has locked more than $12 billion dollars in different solutions. Most of the DeFi platforms are based on Ethereum and are allowing users to have access to financial solutions without depending on a centralized third-party. 

Decentralized applications are also expanding. dApps are applications that are decentralized and based on blockchain networks. Most of the dApps are currently using the Ethereum network. The main advantage of using Ethereum is the large user base. Moreover, Ethereum shows a high degree of interoperability with other blockchain networks. 

What is ETH – Conclusion #

In this guide, we shared with you what ETH is, how it works and which are the main use cases of this blockchain network. At the same time, you learned what can be done with it and how ETH is among the most valuable cryptocurrencies in the world. 

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