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What is Ethereum and why you should know it in 2021?

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Ethereum fashioned itself as the #1 alternative to Bitcoin Core (BTC). BTC has major drawbacks. Most predominantly, it’s the slowness of the BTC blockchain that leads to far fewer transactions per second (only 7). Ethereum solves a variety of BTC-specific problems and additionally, adds a few major features like the availability of building smart contracts and decentralized apps (dApps), which BTC lacks.

What is Ethereum?

Ethereum is a digital ecosystem. At the core, it’s a blockchain on which different assets, services, and features are developed. It’s made of different parts:

  1. Ether or ETH, the cryptocurrency (1 ETH = $2506 at the time of writing)
  2. A large number of decentralized apps
  3. Smart contracts functionality
  4. Ability to mint, buy and sell NFTs

And more.

Ethereum is not just cryptocurrency. It’s a technology that aims to improve the world around us. It has changed how we transact, how we develop, and how we use the internet in general.

Why does Ethereum matter?

Ethereum is a future-proof system. It allows for global money transactions and building cross-border applications. People use the Ethereum network to build everything from games to serious financial marketplaces.

Ethereum is open to everyone. All you need is the Internet and an Ethereum wallet to keep your ETH, the money of the platform. ETH as a cryptocurrency also has external value for investment, trading, and payment purposes.

Some features of Ethereum are not exclusive to it. Many other blockchain technologies have these features. However, Ethereum enforces and develops these features with a great deal of conviction:

  • With the internet and a free wallet, you can transact with money across borders.
  • Using the apps built on the Ethereum network is private. You can remain highly anonymous while using these services.
  • Ethereum is peer-to-peer meaning there is no broker or middleman on which you have to depend. It’s from person A to person B, direct.
  • Ethereum is censorship-resistant. No government, organization, or central group controls a chunk of the Ethereum tech. No one can influence the technology and whatever is done on it. The entire community can collectively influence decisions.
  • Smart contracts allow the safety of funds. For example, you can set up a rule in a smart contract that funds will be automatically released when certain conditions are met. This provides buyers and sellers online a very safe place to transact.

What are some issues with Ethereum?

  • Ethereum mining costs a lot of electricity. This will change with Eth2.
  • Many popular cryptocurrencies such as Ripple, Cardano, Stellar, IOTA, NEO, EOS, etc. outperform Ethereum in terms of transaction speed. This will also change with Eth2.

Ethereum 2.0: Evolution of Ethereum

Ethereum 2.0 or simply “Eth2” is a proposed upgrade over the current Ethereum technology that aims to solve even more issues. Many crypto investors use Redot for staking their ETH while waiting for the next stage of ETH2.

Here’s a comparison: BTC handles 7 transactions per second; Ethereum handles 30 per second; and when the upgrade to Eth2 is done, Ethereum will handle 10,000 transactions per second.

Eth2 will also make the network more secure, more scalable, and more efficient. Ethereum will switch from Proof of Work to Proof of Stake consensus, meaning there won’t be any need for mining on Eth2. This makes Eth2 a greener and more environment-friendly network.

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