Have you ever imagined why ethereum has suddenly become popular across the World? Advanced safety features that come with ethereum make it one of the best technologies for developers and entrepreneurs.
Ethereum smart contracts provide an excellent infrastructure to build highly-secured decentralized applications. This eliminates interference from third parties and avoids cases of fraud. The decentralized infrastructure supported by ethereum enables users to sign contracts, agreements, trade goods, and services, and make transactions without the need of middlemen. As such, demand for ethereum has grown, resulting in a sharp increase in market capitalization over the years.
Commanding the second largest market capitalization of $25 billion behind Bitcoin, which has a market value of $185billion, it is no doubt that ether is gradually enjoying a considerable market share in the blockchain industry. So, why is Ethereum important? For the latest insights on Bitcoin security, visit fintech-insight.com that explores the crucial connection between Bitcoin and security.
What is Ethereum?
Ethereum is typically a blockchain-enabled platform that provides technology infrastructure to run Distributed Applications and smart contracts. Users leverage the open-source platform to build decentralized applications.
Mining ether
The popularity of ethereum has been catapulted by ether which is mined on the ethereum platform. Ether is mined through the ethereum protocol rewarded to miners for contributing to adding blocks on the blockchain network. The incentive rewarded to miners in the form of ether is meant to encourage mining and promote the growth of the network.
Currently, ether is accepted in various crypto exchanges and traded against other digital assets. Transaction fees collected from users and block rewards come in handy in growing the blockchain network. An increase in the value of ether over time has contributed to the growing popularity of ethereum.
Smart contracts
The advent of smart contracts has transformed how people manage agreements and contracts. The computer program excels in facilitating assets between parties. This could include shares, money, property or any other digital asset that you’d want to exchange with a partner.
What makes ethereum smart contract technology unique compared to traditional agreements is that it can not be changed once executed. The sophisticated ethereum blockchain technology entails verification by anonymous peers on the network.
Building Decentralized Applications (Dapps)
A Dapp is generally a computer program developed to run on an ethereum blockchain network without being manipulated by a central system. Unlike traditional apps that are controlled by a central system, ethereum based applications offer direct interaction with end-users and application providers.
For an application to be referred to as Dapp, it has to be open-source and use the blockchain-based token to run the application. The end product is building applications that have more advanced safety features compared to ordinary software applications.
Decentralized Autonomous Organizations (DAOs)
Decentralized Autonomous Organizations (DAOs) is a decentralized digital application that works democratically. In this case, decision-making is not centralized but instead in the hands of a few authorized individuals.The entire process is supported by a blockchain network and controlled by smart contract protocols. This means that it has to go through a decentralized system for verification before a decision is made in an organization.
Every decision within the organization goes through the ethereum blockchain-based technology to ascertain the veracity of every decision making process. Based on this, every member is allocated a token based on the amount of shares in the DAO.
The allocated tokens are therefore used in the voting process where the number of votes determines the proposal. This ensures decisions made in an organization reflect the accurate picture of everyone’s thoughts.
Final thoughts
Ethereum provides both digital currency and contributes to the advancement of digital technology. In that regard, the importance of ethereum in society can not be underscored. Whether you intend to leverage ethereum to mine ether for cryptocurrency or utilize the features to develop decentralized apps,the choice is yours.