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What is Ethereum (ETH) Cryptocurrency?

5 min read


What is Ethereum (ETH) Cryptocurrency?

This type of cryptocurrency is the world’s second popular cryptocurrency after Bitcoin by market cap. Fortunately, it is right to say that any comparisons between the two cryptocurrencies are indeed natural. The rise of Ethereum was to complement Bitcoin and not compete with it.

Ethereum, which can also be known as Ether, is a decentralized digital currency traded via online exchanges stored in several types of cryptocurrency wallets. In other words, Ether is not regulated by any central authority of any country. Just like Bitcoin, Ethereum makes use of blockchain, which is a ledger technology. People use it as collateral and even a store of value.

Ether allows the deployment of smart contracts and other decentralized applications to be built and run without any type of fraud or third-party interference. Its native cryptographic token powers Ethereum. Ether is mainly traded as a digital currency on exchanges, just like any other cryptocurrency. It is also used in the Ethereum network to run applications.

Ethereum, just like any other crypto, has its advantages as well as disadvantages. Here are some of its pros and cons.

Advantages

a. It is Developed by an Open Source
The fact that it is developed by an open-source gives room for further improvements whenever necessary; thus, users of Ethereum are guaranteed transparency and stability in return. So, if any failure or an error occurs during transactions, it could be easily solved by entering the source code.

b. It is not Regulated by Any Entities
Not even the government has control over this crypto or even any central banks. The advantage of this is that controlling its value is difficult. This will depend on the trust of users together with the volume of transactions that are made. This gives Ethereum users peace of mind that when they make payments, the money will go directly to the person it’s meant to go to for the payment of goods and services without anyone intervening in the process.

c. It is Cheaper

We all want to save a few coins during these tough times, and with Ethereum using it is much cheaper. This is because it lacks the involvement of third parties, so this makes it a more profitable option for any payments to be made compared to other currencies. There are no transaction fees involved.

d. It cannot be Faked
We all worry about being scammed with counterfeit money, which is common with fiat currency, but with Ethereum, you can be assured nothing of the sort can take place. This is because Ethereum is a virtual currency that has its identifiers. These identifiers make the whole process unique.

Disadvantages

a. Slow Speeds

Decentralized protocols, at times, tend to be very slow. This is because Ethereum tends to have an average speed of 15 Transaction Per Second (TPS), which is double Bitcoin’s speed of 7TPS, but still, it is not enough speed. Ethereum network has recently been slow due to the exploding popularity of yield farming and DeFi.

b. Programming Language
Developers are required to code in solidity whenever they need to create tokens and apps on the Ethereum network. Such developers may be unfamiliar with the new language. They are needed to code smart contracts and the outcome. It's common for smart contracts to be written with a few vulnerabilities in them, which are a bit difficult to identify at times. In some cases, smart contracts can be audited by a third party, and still, a hacker can get into it and exploit it.

Ethereum For the Win!

The future of Ethereum, for sure, is exciting. New projects and ideas are being introduced from time to time while the existing ones are gaining more influence and attraction globally. So, why wait? Get started on your journey with this incredible crypto, and for sure, it is worth it!