What is Ethereum, One of the Future Digital Financial Technology Breakthroughs

Ethereum is a leading blockchain platform, a successful crypto project that has developed features that are very easy to use, hosts thousands of decentralized applications (DApps), and is currently the only cryptocurrency that competes with Bitcoin. For a more detailed discussion of what Ethereum is, see the following explanation.

History of Ethereum

Ethereum is a Crypto Asset token that is similar to bitcoin in that it can be used in peer-to-peer transactions, or bought and sold on exchanges for speculative value. Ether has many applications beyond its use as a token or virtual currency, and there are many interesting projects being built on the Ethereum network.

Ethereum was first created by Vitalik Buterin, who previously worked at Bitcoin Magazine – a leading medium among cryptocurrency lovers. The Ethereum project funds were obtained from a crowdsale selling shares in the form of Ether. This process is also known as ICO (Initial Coin Offering).

Officially launched on 30 July 2015, Ethereum allows users to make online transactions and global payments, earning interest on their holdings via staking, execute smart contacts, and exchange standard ERC-20 tokens, use and store non-fungible tokens (NFT).

Many see Ethereum as the next step for the Internet. In fact, the platform supports many leading decentralized applications such as Uniswap, MakerDAO, Aave, 1Inch, Curve Finance, The Sandbox, Decentraland, Chainlink, Axie Infinity, Chromia.

Quoting data from ethereum.org, Ethereum can have 2.970 projects, wallet accounts with 71 million ETH balances, and 50,5 million smart contracts.

After discussing what Ethereum is, then let's look at an explanation of what Ether or ETH is.

Just like Bitcoin, Ethereum also has native cryptocurrency called Ether (ETH). These assets can be used for a number of things, such as:

• Transaction fees: Every action on the Ethereum network, from payments to using DApps, requires a certain amount of fees. This fee is paid in the form of ETH.
• Payments: Like Bitcoin, Ether can also be used for payments. Users can send ether to other users and, like cash, payments do not require a third party to process or approve them.
• Support DApps: Ether required to use decentralized application(dapps) built on Ethereum, starting from staking ERC-20 tokens for yield farming to completing functions such as voting on network governance.

Moreover, the supply of ETH is also not controlled by any government or company, the asset is decentralized and fully transparent. At the time this article was written, ETH had an outstanding circulating supply of 121.496.621.

Functions or Uses of Ethereum

So, what can Ethereum do? The following is a detailed explanation of the function or use of Ethereum.

• Banking for everyone: Not everyone has direct access to various financial services. But with Ethereum, you can access various financial services that the platform belongs to, from start to finish staking, global payments, investments, and much more.
• Peer-to-peer network: Ethereum allows you to move money or make deals directly with other people, without going through an intermediary company.
• Smart contract : Smart contract is a program that runs on the Ethereum blockchain. They are not user-controlled, and are developed using Ethereum's native language, Solidity.
• Decentralized application (Dapps): Ethereum allows you to create consolidated applications, called DApps.
• Decentralized autonomous organization (DAO): Ethereum allows you to create DAOs, in democratic decision-making.
• Create new crypto assets through the use of the ERC-20 token standard.
• The blockchain also takes advantage of non-fungible token (NFT) via the ERC-721 token standard.

How Ethereum Works

Ethereum uses the concept of decentralized transactions (decentralized application/DApps). Ethereum works as a platform where anyone can upload code called smart contacts.

Anyone can publish smart contacts  or send transactions. The whole code can run on Blockchain. For example, if someone makes an application and someone else also creates an application, then the two applications can interact.

The Ethereum environment is interconnected so the more people who join, the wider the network.

Simply put, how Ethereum works with smart contacts similar to a computer program that runs automatically according to orders in a contract. Because in the program, no supervisor is needed. Feature smart contacts more efficient to execute and tend to be more secure.

Like other cryptocurrencies, Ethereum uses technology blockchain. Technology blockchain used to verify all transactions. The activity is recorded on public ledger or a public ledger that is transparent and secure and instantly recognizable.

In order to be traded, the Ethereum currency called Ether must go through a mining process, i.e. the act of adding transactions to blockchain so that everyone can agree on the same set of transactions.

Ether can be used as a digital currency in financial transactions or as an investment.

Reference:

https://ethereum.org/en/what-is-ethereum/

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