As I write this article the price of Bitcoin has crossed US $35,000 and ETHER US $1200. The price of many such cryptocurrencies has quadrupled many times. Today let’s talk about the second largest Cryptocurrency in the market ie. ETHER and ETHEREUM.
What is ETHEREUM?
ETHEREUM is a decentralized open-source blockchain. It was launched in 2015 mainly for sophisticated smart contracts programming, execution and deployment. Since Bitcoin did not have a good scripting language, Vitalik Buterin founded ETHEREUM. Similar to how developers used to build apps and games on Facebook, you can build dApps on Ethereum. Not just dApps(Decentralized Applications) but also DAO ( Decentralised Autonomous Organisations )
What is ETHER?
Ether is the native cryptocurrency in the ETHEREUM Blockchain that is listed and traded on cryptocurrency exchanges as ETH which can be mined as any cryptocurrency. For any operation to happen on the Ethereum blockchain, miners need to approve transactions by lending their computing resources. For this, they get rewarded in ETH. It can also be sent from one account(address) to another(address) like any other Cryptocurrency. Ethereum addresses and contract addresses start with a 0X.
What is GAS?
Gas is the fee that needs to be paid to miners for executing a transaction. A transaction does not necessarily mean just sending ETH from one address to another. It can also be the execution of a smart contract. It is paid using ETH. The gas fee varies based on the complexity of the operation performed by the EVM ( Ethereum Virtual Machine ) and the computational power it requires to be completed. The Gas fee can be specified by the sender. More the Gas, the more the incentive for a miner to pick up the transaction.
What is a Smart Contract?
An automated normal world contract is called a Smart Contract. Many real-world operations that involve 3rd parties like Lawyers, Brokers, Commission etc. can be eliminated using Smart contracts. Let’s say you want to buy a house. The elements and parties involved in this would be Buyer, Seller, Lawyer, Broker, Commission, Fee, Bank etc. And a lot of time as well in coordinating all these parties. If a smart contract is involved, pay in ETHER, sign the contract and you own the house. All the conditions of the agreement will be penned down in the Smart Contract. The Blockchain executes the contract and plays the role of the lawyer and Broker to witness and process the agreement. Immutable versions of the contract and the changes are stored on the Blockchain.
Ether Vs Bitcoin
Today let’s talk about the advantages of investing in Ethereum against investing in Bitcoin.
The price of Bitcoin is reaching an all-time high, which is nearly 39,000 US dollars today. Along with it, the price of other altcoins has also seen a significant boost in value. Ether has gone from $122 to $1250 this year. I personally think ETHER is much better crypto to hold when compared to Bitcoin. Because of the following facts:
- Ethereum has real-world uses when compared to Bitcoin. I would compare Bitcoin to Gold and Ether to Silver. Do notice that, gold does not have much use other than the novelty value it carries (in the jewellery). On the other hand, Silver is used in a wide variety of applications such as in Electronics, Photography, making mirrors, Batteries, Jet Engines, Solar panels etc.
- Ethereum is a robust platform on which many other decentralized apps ( dApps ) reside. There are thousands of dApps already in various categories like real estate, finance, agriculture, gaming, banking etc.
- It is becoming the default platform for building and executing smart contracts. And smart contracts is what would make the Blockchain technology itself gain mainstream adoption.
- Decentralized finance is gaining momentum big time. As we speak there are already hundreds of millions of dollars worth of transactions happening on Defi platforms. In no time, DeFi projects will be done and executed on the Ethereum blockchain on daily basis.
- Ethereum is becoming the best platform for creating other coins and crypto. Some of the biggest cryptocurrencies in the market reside on the Ethereum platform. For example BAT, DAI, TUSD, 0x, OMG, Golem, Tether, BNB etc. The market cap of the cryptocurrencies created on the Ethereum platform and traded by itself crosses several billion dollars!
- Gas: A fee paid after each transaction in the Ethereum world. It is paid in Ether. Already there are millions of transactions happening every day on the Ethereum platform. This means Ether will gain tremendous value on the go.
- Unlike Bitcoin, the Ethereum blockchain has a team and an organization backing it, which is a real “feel good” factor, especially when you are investing your money for a longer-term. You have the peace of mind that if anything wrong happens there are people to take care of it.
And many huge companies like Microsoft, Amazon, JP Morgan etc. are making Ethereum their platform of choice. So, for all these reasons I personally believe more in Ethereum than in Bitcoin. Well, many experts have also predicted that Ether will easily reach $9000 by 2025. As always, please do your research as well before deciding to invest in Crypto.
Let’s keep talking about more interesting topics. If you like to get notifications of new topics, do subscribe to this Youtube Channel “Let’s Talk”. The links are provided in the description below.