Ethereum (ETH) Overview
One of the strongest challengers to Bitcoin in the cryptocurrency arena is Ethereum. This digital currency is actually an open-source software platform that uses a blockchain principle similar to Bitcoin. There is also something known as smart contract scripting which adds functionality to Ethereum. The currency made its public debut in July 2015.
The History of Ethereum (ETH)
When new technologies emerge it is common to see attempts which refine and perfect the basic idea behind them. Cryptocurrencies are no exception. In the wake of Bitcoin several other currencies began to emerge. One of the first of these was Ethereum. Interestingly, it also made its initial appearance in a White Paper published by Vitalik Buterin.
Buterin is believed to have been one of the original programmers involved in the creation of Bitcoin. He may even have been a part of the collective who assumed the fictitious name Satoshi Nakamoto. It was the belief of Buterin that Bitcoin should have its own scripting language which would permit the development of applications. The other principals involved with Bitcoin disagreed and Buterin proceeded with the development of his own cryptocurrency platform. The result was Ethereum.
The initial company behind Ethereum was a Swiss company called Ethereum Switzerland GmbH. A non-profit Swiss foundation called the Ethereum Foundation was also begun. To fund much of the development of the Ethereum platform, a public crowdsale was held in July and August of 2014. Those who wished to purchase Ethereum tokens could do so with Bitcoin.
Like Bitcoin, Ethereum is an evolving platform which is being constantly refined and expanded. The first incarnations of the cryptocurrency were criticized for security issues as well as its potential for expansion. Through what the developers refer to as Milestones, Ethereum has now placed itself in a position where it can pose a serious challenge to Bitcoin for a larger share of the cryptocurrency market.
Milestones are simply upgrades to the software platform on which Ethereum is based. “Homestead” is the most recent Milestone and it resolves multiple issues that Ethereum has faced. This update improves the overall security of the cryptocurrency, and addresses issues with the processing of transactions.
Ethereum also works on the concept of a Blockchain, but it also uses something known as smart contracts which aid in the exchange of the cryptocurrency. These contracts can be public. As such, Ethereum is poised to work wonderfully in arenas such as provably fair online casinos.
Ethereum (ETH) Mining
Ethereum mining is the process of increasing the volume of Ether (the essential unit of Ethereum) in circulation. There is more to the process, however. Mining Ethereum also helps to secure the platform by creating, verifying, and publishing blocks in the Blockchain.
Ether can be thought of as the fuel that makes the Ethereum platform run. When an individual mines this cryptocurrency, they are mining Ether or “gas” which can then be sold or exchanged. There is not an endless or infinite supply of Ether. A maximum of 18 million Ether are issued each year. The developers created this finite system in part because it helps to reduce inflation of Ethereum.
Ethereum mining can be very profitable, but the reality is that it is beyond the means of many individuals who would like to invest in this cryptocurrency. One of the major downfalls of mining Ethereum on one’s own is that the process requires dedicated computer equipment and consumes a lot of electricity. If the process can be carried out more efficiently, the profitability improves.
To mine Ethereum also requires that you download an application known as Geth. This software application facilitates all the communication you need with the Ethereum platform. There is also the need to download a mining software such as Ethminer which actually completes the hashing process that is critical to working with a blockchain.
Many of those who wish to mine Ethereum may find a mining collective to be a better option. Trusted companies like Genesis Mining allow you to partner with other individuals to purchase hash power. You are basically investing in a mining rig, sharing the expenses of the rig, and sharing the profits with your fellow investors.
Ethereum (ETH) Use and Acceptance
Because it is somewhat new compared to Bitcoin, the mainstream use of Ethereum is still in its infancy. However, the acceptance of this cryptocurrency is growing with each passing day. There have even been moves to integrate the currency with companies like VISA to produce debit cards which can be used at an ATM and other points of purchase.
It was announced in 2017 that the London-based Bitcoin wallet provider Blockchain and a Luxembourg Bitcoin exchange would begin allowing their wallet and account holders the ability to buy, sell, and exchange Ethereum. This move signals a strong trend toward an increased popularity of Ethereum in both the short and long term.
At the present time, Ethereum could be better classified as a strong buy and hold investment. It is not yet as liquid as Bitcoin but this is changing. Mining the currency or becoming part of a mining partnership would be advised at this point in time.