If you first heard about Bitcoin before 2016, you may have thought it was a joke. Virtual coins, which you couldn’t use to buy things and were completely digital seemed silly. But over the past several years, the price of Bitcoin has shot sky high and some major businesses now accept bitcoin as a form of payment.
Bitcoin has light a path for cryptocurrencies to become mainstream. You may have questions about cryptos and how to invest in them.
If you have been keeping track of cryptos recently, you have probably come across Ethereum. You may wonder, what is ethereum and how it differs from Bitcoin. Keep reading to find out the answers to these questions.
What is Ethereum?
Ethereum is one of the most popular cryptocurrencies available for purchase. On lists that rank cryptos, it always sits as the most popular cryptocurrency, after Bitcoin. Part of the reason for this is that its price has seen a dramatic increase since its inception in 2015.
Ethereum is a virtual currency that people can mine by using computers to solve complex mathematical equations. When this happens, an addition of one block occurs to the blockchain. The blockchain is what keeps track of ethereum transactions and many other cryptocurrencies.
Once the block addition is made, the person that solves the equation gains a coin. The system that allows this is Ethereum and the coin’s name is Ether.
Ether and Ethereum
Ethereum is more than just a way to mine and track Ether. The Ethereum network also provides many useful utilities for its users.
Ethereum allows its users to take out loans, exchange assets, and even buy digital art. The Ethereum network keeps track of all these transactions. One of the great features of Ethereum is that no one entity manages or controls it, like a bank.
The individual users that use the network help manage it as a collective.
Ethereum also has the feature of executing smart contracts. Like a regular contract, two parties make an agreement about the delivery of products or services. Unlike a regular contract, the parties do not have to go through lawyers.
The contract is coded in Ethereum and once the conditions of the contract are complete, the program executes and delivers a payment of Ether to the correct party.
Bitcoin vs Ethereum
If you are looking at investing in cryptocurrency, you might be asking why should I look at Ethereum when Bitcoin is more popular.
First, Bitcoin is more expensive, on an astronomical scale. As of April 18, 2021, one bitcoin has a value of $55,710.00 per coin. On the other hand, Ether is worth $2,197.91 per coin. Etherium is the way to go if you want to get more bang for your buck.
Bitcoin also only has use as a currency. Ethereum provides a network with different utilities available to its users.
There is also a finite amount of bitcoin. There will only ever be 21 million pieces of bitcoin available to the public. On the other hand, the supply of Ether is endless.
How to Buy Ethereum
The easiest way to buy Ether is through a cryptocurrency exchange. Apps such as Coinbase, Binance, and Kraken are popular avenues for trading in Ether and other cryptos. If you only want to buy and sell bitcoin or Ether, you can use Robinhood or SoFi.
If you have more questions, you can learn about buying Ethereum.
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