Ethereum has become a popular investment and trading instrument in recent years. But when it comes to cryptocurrencies, ethereum comes second to bitcoin. It doesn’t have as many users as bitcoin although it has promising features and potentials.
This article will explore ethereum’s world so you may arrive in a conclusion whether it is worth investing in or not.
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Getting to Know Ethereum
Ethereum is Vitalik Buterin’s brainchild, along with a team of three other skilled developers. The team resourced ideas from the development of bitcoin and other cryptocurrencies, then introduced their own new ideas in the form of ethereum. Ethereum is then released in mid-2015 as a decentralized platform that runs smart contracts apps that makes censorship, downtime, third party interference or fraud impossible.
Making Money Out of Ethereum
Earn profits with ethereum by mining it on high-end GPUs that are low power costs. The blockchain of ethereum is made of blocks in variable sizes. By hashing a modified Dagger-Hashimoto algorithm, blocks are mined on average every 15 seconds. The said algorithm is configured to resist processing by ASIC devices. With this, ethereum mining is mainly performed by graphics cards.
The Advantages of Ethereum
Scalability will become the most sought after public blockchain technology. In terms of blockchain scalability, ethereum appears to have a clear advantage whereas bitcoin is still in the process of upgrading its transaction capacity. With ethereum version 2.0, it would be able to handle as many TPS as with the Visa and American Express networks. Thus, IBM is speculated to use ethereum as the backbone of the platforms of their Internet of Things.
The Disadvantages of Ethereum
However, ethereum still has a problem when it comes to scalability. The current blockchain that processes 3-20 transactions per second, are several orders of magnitude away from the amount of processing power needed to run financial markets or mainstream payment systems. It still has much less decentralized forums or global micro-payment platforms for the Internet of Things.
Privacy is also another concern. Companies or individuals are keen on publishing all of their information onto a public database that can be arbitrarily read without any restrictions by one’s own government, foreign governments, family members, coworkers, and business competitors.
With that said, ethereum is still a developing story. Because just anyone is able to code a smart contract with ethereum, here lies both opportunity and danger. It faces considerable challenges in order to realize its full potential. But ethereum’s small development core team is hopeful for the success of ethereum version 2.0. Will you wait until then or invest as early as now? You decide.