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Tuesday, December 6, 2022

Everything you need to know about Ethereum and the technology behind it

Ethereum is not only the technology that allowed the creation of the cryptocurrency, Ether, but it is a decentralised open source platform that allows users to develop smart contracts, applications, and crypto assets. Find out in this note why it is called second generation blockchain.

Ethereum, unlike what most believe, is not a cryptocurrency , but rather the technological system behind Ether. It was created in 2015 by Vitalik Buterin, David Wong and Charles Hoskinson. At the moment it is the second cryptocurrency in market capitalisation and this technology also allows to create applications on it.

But, first let’s see what differences it presents with Bitcoin and its Blockchain system . For Lorena Fabris , lawyer and cryptocurrency analyst, “Bitcoin was conceived as a decentralised digital currency and to store and transfer cryptocurrencies. It is considered as a first-generation blockchain.”

Instead, “Ethereum is a decentralised open source platform that allows users to develop applications on it. Developers can create NFTs (non-fungible tokens), crypto assets, smart contracts, etc. Ethereum is a second generation blockchain,” he explained a Scope Fabris.

The development of applications allows “to create dapps (decentralised applications), games, Smart contracts (smart contracts), NFT (non-fungible tokens), DeFi platforms (decentralised finance) among others “, added Lorena Fabris and added: “It has the advantages that it allows executing smart contracts and serves as a platform to develop other applications on it “.

So the question that arises is, How do smart contracts work?

Smart contracts – smart contracts – are by definition applications that run exactly as programmed, without the possibility of censorship, delay, fraud or third-party interference. They have the ability to be fulfilled automatically once the parties have agreed on the terms . This can revolutionise not only the financial system, but also the legal system or the operation for example of insurance companies, rentals, or everything that has to do with contracts and can be programmed in an application. based on trust and backed by the law, a smart contract is based on a cryptographic code that has no dependencies and eliminates all types of intermediaries.

Both stressed that ” any operation carried out within the system through smart contracts is irreversible , that is to say that if the person makes a mistake when making the transfer on the network there is no going back, being impossible to recover the transferred sums as they lack the support of a entity”.

Moreover, Goberna and Tolaba did mention crypto-fuel or currency of payment is needed to sustain this infrastructure ” . The gas is a commission paid to the current remaining contract forever in the blockchain or ledger digital addition , those users who interact with these smart contracts, which require computational work, must pay the gas. Within the Ethereum network, the gas commission calculated in the work unit is charged for each transaction. There are no intermediaries between the operator and the user and also the programmer can create their own currency called ERC20 tokens “.

According to his point of view, the potential of Ethereum, “is mainly related to allowing tokenise services and financial assets, it is radically transforming the traditional world of finance. Currently, the network is experiencing great growth, since large banking entities such as Santander, Société Générale, UBS, Barclays, Bank of America and BBVA have begun to experiment with its capabilities. ”

Ether, the cryptocurrency of Ethereum

Santiago Amat , a public accountant and finance specialist, defined Ethereum as “the mother of smart contracts” and talk about Ether, the cryptocurrency that arises from this project.

“Why invest in Ether? It is the second cryptocurrency with the highest capitalisation in the market. 17.5% of the total volume, 236 billion dollars,” he told this medium and expanded his analysis: “It suffered a very strong correction down 62% since its last all-time high reached $ 4,400 and is currently at $ 1,960. ”

“This is an excellent buy signal. The assets have to be bought on a floor and sold on a ceiling and made a very strong correction,” Amat confided and closed his future projection: “More transactions are being made in Ether than in Bitcoin and it’s a sign that people are appreciating this project more. ”

“Improvements and updates are being implemented that will allow to reduce the inconveniences of the network. And that will make Ethereum more scalable, more secure and more sustainable. This can generate growth in its capitalisation and its adoption as a store of value by users. of course we must keep in mind that there are many other blockchains that allow the grow healthy ecosystem and decentralizsed way , “Fabris expanded.

Also Read:

How to acquire Ether?

There are two ways to get Ether: mining or buying on an exchange.

“Miners make their technological resources available to the blockchain by validating transactions and creating new blocks in exchange for a reward that is gas calculated in Ether. Another option is the purchase P2P (peer to peer) in an Exchange. There is a wide range of local and international exchanges where you can buy Ether.

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