7 Fascinating Facts About Ethereum for Beginners
If you’re increasingly intrigued by the cryptocurrency industry but want to know about more than just Bitcoin, Ethereum should be your next port of call. Ethereum is often considered the rival cryptocurrency project of Bitcoin but, in reality, it’s an entirely different proposition to Bitcoin, which is primed solely as a next-generation digital currency.
As a newcomer to Ethereum, take some time to check out these seven interesting facts about the Ethereum project. Hopefully, they will help you to see whether Ethereum is a cryptocurrency worth your time and money.
Ethereum was crowdfunded from the outset
It’s true that the Ethereum project was the brainchild of research scientist and crypto enthusiast Vitalik Buterin. Buterin discussed the concept of the Ethereum network in late 2013, but he lacked the capital to make his ambition a reality. A crowdfunding program was eventually launched during the months of July and August 2014. In the first 12 hours of the crowdfunding alone, over 7 million ETH tokens were sold at a market value of approximately $2.2m. The project was then devised and launched the following summer.
Ethereum’s network is 100% open-source
Ethereum is increasingly used for iGaming
Ethereum is fast becoming one of the cryptocurrencies of choice for iGaming. It ranks second behind Bitcoin as the most used cryptocurrency at online casinos that accept crypto deposits, according to BitcoinCasinoWiz. Using data derived from SoftSwiss, it was determined that four-fifths (80%) of all crypto-based iGaming transactions involve Bitcoin (BTC). However, almost a tenth (9.9%) are now made using Ethereum (ETH). That’s significantly higher than both Litecoin (4.5%) and Tether’s USDT stablecoin (1.6%).
Ethereum is not the name of its native cryptocurrency
Although Ethereum is the name of the overall network, its native cryptocurrency goes by a slightly different name – Ether. Ether, or ETH for short, is the cryptocurrency of Ethereum-based dApps. It is fully decentralized, with all transactions fully secured and verified by proven cryptography. Every ETH coin mined can be divisible up to 18 decimal places, which is great news for those new to cryptocurrency investing that don’t want to commit too much money upfront. In fact, you can invest in as little as 0.000000000000000001 ETH if you so wish!
Ethereum has no limit on its supply of ETH
Bitcoin has a fixed supply of 21 million BTC coins. Once they are all mined into circulation, no more will be created. That’s unlike Ethereum, which does not have a fixed cap on supply. It only has a fixed annual supply limit of 18 million ETH coins, which was defined as part of the project’s initial presale back in 2014. Soon, ETH will surpass BTC as one of the most circulated cryptocurrencies in the industry. However, the project’s co-founder, Vitalik Buterin, is keen on the prospect of issuing an issuance limit to guard against ETH becoming seen as an inflationary token.
Ethereum was the birthplace of smart contracts
The primary goal of the Ethereum network was to facilitate the use of smart contracts. These peer-to-peer contracts remove the need for go-betweens in transactions, thereby optimizing the efficiency of the ecosystem. Smart contracts require individuals to meet their contracted obligations to send or receive their cryptoassets – it’s something known as an “if this then that” framework. Smart contracts have also been the foundation for many dApps on the Ethereum network. These computer programs are locked in place once both parties agree and cannot be altered.
Ethereum is currently governed by a Proof of Work consensus mechanism – but is soon moving to Proof of Stake
The consensus mechanism of the original Ethereum blockchain is a Proof of Work (PoW) algorithm. That’s the same as Bitcoin, which also utilizes a PoW mechanism. However, the upgrade to Ethereum’s base layer protocol, known as Ethereum 2.0, is set to see Ethereum switch from a PoW consensus to a Proof of Stake (PoS) consensus mechanism, as covered here on Crypto News. The network recently completed a successful test of its impending network upgrade. It’s felt that this shift will give Ethereum enhanced security and reduce the potential for inflation in the years ahead.
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