Ethereum Project – What is Ethereum? Explanation, buying / selling, mining

(Last Updated On: November 11, 2021)

What is Ethereum?

The Ethereum project as such, can be roughly divided into two important parts (although the second is within the first), on the one hand the platform itself and on the other its currency. As we discussed, Ethereum is a Cryptocurrency and a Blockchain or Distributed Accounting Technology (DTL) platform. It was invented by Vitalik Buterin in 2013 and is basically a decentralized platform for developers to build apps on top of it.

Ethereum was originally created as an improved version of the cryptocurrency Bitcoin, to overcome the programming language limitations that it had, providing more advanced features such as custody on the blockchain, financial contracts, improving withdrawal limits, delving into the gambling market and the like through a very widespread programming language.

Ethereum price

And where is the coin then? Ether.

Ether is the currency of the platform. Ether is required by anyone who wants to use or build on the Ethereum platform. Like Bitcoin, you can buy Ethereum or you can mine. We leave the tutorials. Most people use the term (ETH) to refer to the currency rather than Ether, and because of this it can be confusing at times.

How much Ethereum is there on the market?

The total of Ethers in the market and their issuance rate were agreed upon by donations collected in the pre-sale of the coin in 2014:

  • 60 million Ether was created for pre-sale contributors.
  • 12 million were created for the development fund, most of them went to early contributors and developers and the rest to the Ethereum Foundation.
  • When mining, 5 Ether is created for each block (about 15-17 seconds).
  • 2-3 Ether is sometimes sent to other miners if they were able to find a solution but their block was not included (called the uncle / aunt reward).

As agreed by all parties in the 2014 pre-sale, the issuance of Ether is limited to 18 million Ether per year (25% of the initial offering). Although this rate is not expected to be maintained since in 2017, Ethereum will change its mining scheme from Proof of Work (PoW) to Proof of Stake (PoS) under the codename Casper.

The founders of Ethereum claim that Ether is not a currency, but a kind of “crypto fuel”, which means that it is a token that has one main use: to pay for the Ethereum platform. However, you can trade and invest in it with the expectation that its price will go up.


The future of Ethereum.

What gives Ethereum the most value is that the Ethereum protocol moves far beyond the currency. Protocols around decentralized file storage, decentralized computing and prediction markets and dozens of other similar concepts that have the potential to substantially increase the efficiency of the computing industry, and thus provide a major boost to other peer-to-peer protocols by adding an inexpensive cape for the first time.

And for all this and for the amount of possibilities around the project, Ethereum is currently the second cryptocurrency with the highest value and future foresight. Experts predict that in the medium term, it will end up surpassing Bitcoin.

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