Even people who are not familiar with the functions of cryptocurrencies, they must be aware of the two most influential coins in the crypto world Bitcoin and Ethereum. While Bitcoin is the most popular digital currency, experts predict that Ethereum may soon take a jerk up in its coin price from today’s USD 200.61. Leading crypto exchanges like CoinSwitch, Bittrex, Changelly, ShapeShift and Kukoin may be used to gather any details about Ethereum and its competitors by using Ethereum price prediction and convert ETH to BTC.

Functions of Ethereum

Ethereum is a digital currency which works on a decentralised platform using a blockchain technology. Ethereum enables its platform members to create and access decentralised applications (DApps) in the Ethereum ecosystem. Ethereum helps its members to build their own smart contracts using its platform. The processing power required to perform such decentralised applications and smart contracts are purchased using Ether token. Ethereum is a user-friendly approach that allows its users to draft and execute smart contracts through simple codes stored in the blockchain.

Why Was Ethereum Created?

The primary objective behind the creation of Ethereum was to go beyond the capabilities of Bitcoin. While Bitcoin serves as a decentralized digital currency, Ethereum was designed as a decentralized platform that enables the creation and execution of smart contracts. Smart contracts are self-executing contracts with the terms of the agreement directly written into code.

Emergence of Ethereum

Ethereum was launched in 2015 by a multi-talented lad named Vitalik Buterin. He is a Russian programmer who was formerly associated with the development of Bitcoin. After immense research and trial and errors, Buterin emerged as a successful personality after the Ethereum platform’s launch. In 2014 at an extravagant North American Bitcoin Conference in Miami, Buterin announced the launch of Ethereum platform and its attributes.

The development of the Ethereum platform was backed up by a non -profit organisation Ethereum Foundation. The crowd sale of Ethereum tokens was kick-started in 2014, and that was the initial coin offering of Ether tokens. Ethereum rose to popularity with many nodes running in its platform. This gave the developers an edge to make Ethereum better than Bitcoin’s blockchain.

Ethereum uses proof of stake protocol as opposed to Bitcoin’s proof of work protocol. Ethereum’s development and technical upfront made it a faster network than the famous Bitcoin. Because Ethereum takes nearly 12 seconds to process a single block, whereas Bitcoin takes more than 10 minutes for the same. This allows miners to complete more blocks and earn Ether tokens. It is analysed that less than 40% of Ether has been mined so far and till 2021 not more than half od Ether tokens will be mined. Thereby, allowing more credibility to the Etherum network.

A major hack in 2016 witnessed a loss of USD 50 million in Ethereum network. This raised concerns over the security of the Ethereum network. As a result, two divisions of Ethereum tokens emerged in the form of Ethereum (ETH) and Ethereum Classic (ETC).

Key Milestones in Ethereum’s Evolution:

  1. Frontier (July 2015): The initial release marked the launch of Ethereum, allowing users to mine Ether and participate in the network.
  2. Homestead (March 2016): With Homestead, Ethereum aimed to stabilize the platform, enhance security, and make it more accessible to developers.
  3. Metropolis – Byzantium (October 2017): This upgrade focused on improving transaction anonymity and paving the way for future scalability solutions.
  4. Metropolis – Constantinople (February 2019): The Constantinople upgrade introduced several protocol improvements, making the Ethereum network more efficient and secure.
  5. Istanbul (December 2019): Istanbul further enhanced Ethereum’s performance and interoperability by introducing six Ethereum Improvement Proposals (EIPs).
  6. Serenity (Future): Ethereum’s ongoing journey includes the transition to Ethereum 2.0, or Serenity, which aims to improve scalability and energy efficiency through a shift from Proof of Work (PoW) to Proof of Stake (PoS).

The Impact of Ethereum on Decentralized Finance (DeFi):

Ethereum has become the foundation for the explosive growth of decentralized finance (DeFi). It serves as the underlying infrastructure for various decentralized applications (DApps) and smart contracts, offering a wide range of financial services without the need for traditional intermediaries.

Bright future of Ethereum

In 2017 the Ethereum price increased by 13000% making it a viable option for the investors to buy Ethereum with credit card. But one cannot deny the extremely volatile nature of the cryptocurrencies. Bitcoin’s controversies and the speculations about the dominance of few organisations in Bitcoin’s development led way for the growth of Ethereum. Nevertheless, Ethereum may soon be the most influential coin in the world of cryptocurrencies.

Ethereum vs. Bitcoin: A comparison of two leading cryptocurrencies

Purpose and FunctionalityDecentralized platform for smart contracts and DAppsDigital currency for peer-to-peer transactions
Smart Contracts and DAppsSupports smart contracts and a variety of DAppsLimited to transactional capabilities
Blockchain TechnologyRecords transactions and executes smart contractsPrimarily serves as a ledger for transactions
Consensus MechanismCurrently Proof of Work (transitioning to Proof of Stake with Ethereum 2.0)Proof of Work (PoW)
Supply CapCurrently no capped supply (discussion about potential supply limits)Capped supply of 21 million coins
Community and DevelopmentActive and diverse community with a focus on constant improvementRobust and established community with a focus on security and stability
Notable Use CasesDecentralized finance (DeFi), NFTs, DAppsStore of value, digital gold, peer-to-peer transactions
Current Market Position (as of 2022)Second-largest cryptocurrency by market capLargest cryptocurrency by market cap