This is part 2 of learning of the Big 3 Cryptocurrencies. In this post, we are going to dive into the 2nd most popularly traded cryptocurrency: Ethereum. Ethereum is an interesting because it’s not exactly disrupting the cash system; rather think of it as more of a network. Instead of mining for “crypto”, users are mining for “ether”, which is the currency that runs the network. Think of it like a platform where you can build video games, IOS apps, gambling platforms, insurance policies, contracts, and even the next Facebook. Smart contracts and Dapps require ETH in order to run. If you haven’t added this up, it’s quite a big deal, and can be a huge turning point in today’s technology.
Here’s what’s awesome about Etherium
Because it’s a network, everybody and everything are linked together. Meaning, as a community, everyone has the opportunity to review each and everyone’s work/program/transactions ensuring no slippages or shady practices. Essentially killing off the middle person who has been making huge money (AND MISTAKES), and making things more direct for everyone to use. If you’re wondering about the security of Etherium, well if you can amass enough firepower to shut down 41% of the world’s computing power – that is the only thing that can stop Etherium. Pretty cool (maybe a little scary) right?
Ether still needs to be mined
Similar to mining for Bitcoin, multiple computers are connected together to solve complex equations called “puzzles”. Essentially, the fastest computer who solves the puzzle the quickest will be rewarded the Ether. This purpose is to prevent hacking/breaching of data with this community effort and increases the reputation for Ethereum.
Here’s our current overview of Ethereum:
Approximate Market Supply*: $94 million
Current Market Cap*: $28 Billion (Rank:1)
Why Ethereum may succeed:
Why it may succeed: Ethereum is a cryptocurrency based on smart contracts- which are computer protocols that ensure all parties who enter into the contract are accountable to their terms. Computers that mine Ethereum, create a powerful and vast network that can be more or less “rented” by programmers and developers to distribute their data in a decentralized system. The currency “Ether” or ETH monetizes this access; whereas bitcoin’s focus as a cryptocurrency was to become a store of value, Ethereum’s focus is more on the blockchain network itself and geared for business applications of the technology. There is a lot of potential with this currency- hence its recent rise in value.
Why it may not:
Ethereum’s smart contract system was compromised- or very intelligently executed (depending on your point of view) by an entity or individual when it tried to codify its structure and rules. This resulted in a forked, or splintered currency called “Ethereum Classic”. You can learn more about it from CoinDesk, CryptoCompare, and I am sure countless other sources. While this “DAO Attack” hurt the currency at the time, ETH has since recovered. Also, while this currency has a great deal of potential, since its launch, there have been very few successful applications launched using
Ethereum outside of online Casinos.