Ethereum: Difference between revisions

Revision as of 18:48, 24 July 2023

Ethereum is a network of computers all over the world that follow a set of rules called the Ethereum protocol^[1].
The Ethereum network acts as the foundation for communities, applications, organizations and digital assets that anyone can build and use^[1].

The concept of blockchain is crucial in understanding Ethereum.

Banking: Everyone is allowed to access Ethereum, and the lending, borrowing and savings products built on it is an internet connection.
An open internet: Users can control their own assets and identity, instead of them being controlled by a few mega-corporations.
A peer-to-peer (p2p) network: Ethereum allows users to coordinate, make agreements or transfer digital assets directly with each other.
Censorship-resistant: No government or company has control over Ethereum.
Commerce guarantees: Users have a secure, built-in guarantee that funds will only change hands if they provide what was agreed.
Composable products: All applications are built on the same blockchain with a shared global state, meaning they can build off each other. This allows for better products and experiences and assurances that no-one can remove any tools apps rely upon.

Since Bitcoin stands as the pioneering and most renowned cryptocurrency, drawing a comparison between Bitcoin and Ethereum proves highly beneficial when analyzing Ethereum. As Bitcoin's primary competitor, Ethereum is ranked #2 on most cryptocurrency platforms, while Bitcoin is ranked #1.
While this section focuses on comparing Ethereum and Bitcoin, it's essential to acknowledge that they are not of the same kind. Ethereum operates as a decentralized blockchain, where cryptocurrency is merely one of its numerous applications (financial services, games, social networks, etc.). In contrast, Bitcoin exclusively functions as a cryptocurrency, akin to the virtual counterpart of a dollar.
The circulating supply of a cryptocurrency represents the number of tokens that have been issued and are actively available in the market. For Bitcoin, over 90% of its total supply has already been mined. On the other hand, Ethereum does not have a finite supply.
While the concept of unlimited supply may raise concerns for Ethereum, it actually contributes to its stability as a cryptocurrency and sets it apart from becoming the next Bitcoin. This characteristic prevents scarcity-driven market behaviors and allows for a more sustainable and adaptable ecosystem for Ethereum, ensuring its continued relevance and functionality.
Market cap is calculated by multiplying the asset's current price and its circulating supply.

Ethereum's price history 2015-2023

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 === Risks ===
+* Regulatory
+* Technological