How Ethereum Works: It Seems Like We’re Living in a Futuristic Alternate Universe

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The world is changing so fast that it’s tough to understand where the crypto revolution is going, but Ethereum will be part of that story.

Photo courtesy of Pixabay

It’s already a mad, mad world; add cryptocurrency, and it seems like we’re living in a futuristic alternate universe. It appears that new crypto technologies are popping up every week, and more people are becoming accustomed to investing money into digital coins. But what many of us don’t understand is that blockchain—the man behind the curtain of crypto—can be used for purposes beyond our current imaginations, the second-most-popular platform being Ethereum. Recently, the ether coin reached an all-time high of $2,200. But before we dive into Ethereum, let’s do a recap on how blockchain works.

Blockchain is revolutionary because it’s a decentralized technology that isn’t backed by a central authority. It’s a type of database that stores information; specifically for Bitcoin, it reserves the comprehensive history of Bitcoin transactions. This coin has been making headlines because of its institutionalization by everyone from Elon Musk and governments to banks and politicians—not to mention its skyrocketing value. Blockchain is difficult to alter, so that’s why it’s used in the digital currency space.

The cryptocurrency revolution is already affecting the way we live, how we view the world and—more fundamentally—the way our economy works. As of now, our economy depends on institutions for transactions. So, if you go to the store and buy something, it’s with cash that’s originated by a) the Federal Reserve or b) a credit card that uses U.S. dollars. And you have to go through a bank, so, at every transaction, there’s a touchpoint between centralized institutions—public or private, whether they’re governments or banks. The thing about cryptocurrency is it doesn’t depend on central players to get business across the finish line.

A lot of the news focuses on Bitcoin, but it’s just a currency. In December 2020, the World Economic Forum released a report titled “Crypto: What Is It Good For?” and they didn’t focus on Bitcoin. There are new emerging players.

Related Bitcoin 101: Could Cryptocurrencies Eventually Replace the Dollar?

The biggest story you’ve never heard of is Ethereum. It’s more advanced than Bitcoin in the sense that it’s customizable and open source. It can be used in such a vast capacity that we don’t know the extent of its possibilities. Ethereum is the new kid on the block.

Ethereum has a decentralized finance (DeFi) system, and it powers its own digital currency: ether (ETH). But according to their website, Ethereum builds upon Bitcoin’s innovation. Ether is the “gas” that “fuels” the network which is a programmable blockchain. Our world’s brightest minds can come up with endless possibilities for this technology; you can even use it for Bitcoin. It also runs thousands of decentralized applications (dapps).

Bank of America recently stated that “Bitcoin is the most talked about cryptocurrency, but Ethereum [the blockchain] has more features, including being more flexible,” according to CoinDesk.

Ethereum is much more flexible than Bitcoin because it’s not just a coin. The platform calls itself a “marketplace of financial services, games and apps that can’t steal your data or censor you.” One example of an Ethereum application is the use of non-fungible tokens (NFTs). Any of your assets can be tokenized, like how Kings of Leon sold their latest album.

Related How Cryptocurrency Could Inspire a New Kind of Financial Literacy

And they extend an open invitation to all of the coders and programmers out there.

“…[E]verything here is open-source and ready for you to extend and improve,” they stated.

So, get ready to learn some new vocabulary and adjust to new technologies in every facet of life. Bitcoin isn’t the height of blockchain technology. NFTs and DeFi aren’t the most advanced applications we will see. The world is changing so fast that it’s tough to understand where the crypto revolution is going, but Ethereum will be part of that story.

David Grasso is the host of the Follow the Profit podcast, where he shares simple ideas for financial success and lessons learned the hard way. He is also the CEO of Bold TV, Inc, a nonprofit media company dedicated to entrepreneurship and cultural empowerment.

Hannah Buczek is the managing editor and journalist for Bold TV. She also reports and edits for GenBiz, a nonprofit media brand focused on promoting financial freedom.

Latest Ethereum price and analysis (ETH to USD)

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Ethereum is currently recovering from a dramatic 20.68% sell-off just 24-hours after it formed a new all-time high of $2,645.

At the time of writing the world’s second largest cryptocurrency is trading at $2,262 after bouncing by more than 8% from its overnight lows.

The sell-off was reflected across the wider cryptocurrency market, with Bitcoin slumping below $50,000 for the first time since March 7 as speculators begin to question whether the bull market has come to its conclusion.

It’s worth noting that while Bitcoin has formed a series of lower highs followed by a lower low, Ethereum remains in a bullish posture having bounced at $2,134 to keep its structure intact.

ETHUSD chart by TradingView

This could mean that altcoins like Ethereum may continue to perform well over the coming weeks despite a potential drop in the price of Bitcoin, similar to “alt season” played out in January, 2018.

From a technical perspective, Ethereum needs to hold above the previous higher low at $2,065, as well as the daily 200 exponential moving average which is coming in at around $2,100.

Failure to to do this would bring around price targets as low as $1,930 and even $1,805, although it depends on Bitcoin’s desire to bounce in the mid $40,000 region.

For more news, guides and cryptocurrency analysis, click here.

About Ethereum

Ethereum was launched by Vitalik Buterin on July 30 2015. He was a researcher and programmer working on Bitcoin Magazine and he initially wrote a whitepaper in 2013 describing Ethereum.

Buterin had proposed that Bitcoin needed a scripting language. He decided to develop a new platform with a more general scripting language when he couldn’t get buy-in to his proposal.

More Ethereum news and information

If you want to find out more information about Ethereum or cryptocurrencies in general, then use the search box at the top of this page. Please check the below article:

https://coinrivet.com/ethereum-adopts-erc-1155-as-an-official-standard/

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As with any investment, it pays to do some homework before you part with your money. The prices of cryptocurrencies are volatile and go up and down quickly. This page is not recommending a particular currency or whether you should invest or not.

You may be interested in our range of cryptocurrency guides along with the latest cryptocurrency news.

Disclaimer: This is not financial advice.

For more news, guides and cryptocurrency analysis, click here.

About Ethereum

Ethereum was launched by Vitalik Buterin on July 30 2015. He was a researcher and programmer working on Bitcoin Magazine and he initially wrote a whitepaper in 2013 describing Ethereum.

Buterin had proposed that Bitcoin needed a scripting language. He decided to develop a new platform with a more general scripting language when he couldn’t get buy-in to his proposal.

More Ethereum news and information

If you want to find out more information about Ethereum or cryptocurrencies in general, then use the search box at the top of this page. Please check the below article:

https://coinrivet.com/ethereum-adopts-erc-1155-as-an-official-standard/

You may be interested in our range of cryptocurrency guides along with the latest cryptocurrency news.

Disclaimer: This is not financial advice.

Cryptocurrency: Ethereum finally emerges from the shadows

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Too long, in my opinion, has Ethereum been considered the ‘poor cousin’ of Bitcoin. Too much the sidekick, not enough the actual star: more Robin that Batman, more Spock than Captain Kirk, more Gromit than Wallace. It seems, however, Ethereum is finally holding its own.

Frustratingly Bitcoin is the posterchild of crypto: a few years older and thus seen as more credible and established. Increasingly, however, we often see that Bitcoin is the entry point for retail investors, who then diversify in Ethereum, and thereafter into other altcoins. I am interested to note that most of the more vociferous fans of crypto from the traditional banking industry (i.e. Blackrock, Citi, Goldman Sachs, JP Morgan) tend to limit their comments to Bitcoin. Further, the trail-blazing businesses using crypto as a reserve asset for treasury, such as Tesla and MicroStrategy, have also focused on Bitcoin.

The market data, however, shows a more nuanced picture. Certainly, in terms of performance Ethereum has wiped the floor with Bitcoin. In 2020 the appreciation was more than double – Bitcoin’s gains were a non-too shabby-240% vs Ethereum’s stratospheric 450%.

Rao Paul, considered a sage crypto market analyst, only a few days ago pointed out that Ethereum has only fallen below its initial price against BTC for the first five months of its existence in 2015. While few retail investors trade ETH/BTC it does put to bed the theory that all cryptos tend to follow BTC price movements.

Indeed, whilst the market cap of Bitcoin £822bn dwarves Ethereum’s £181bn, the market dominance figures of the recent past make for interesting reading. Since January 2020, Bitcoin’s dominance has fallen from 69% to 56% whilst Ethereum’s has risen from 7% to 12%.

The use case for Ethereum can be seen as its biggest joy and challenge. Bitcoin seems to be broadly accepted as a potential replacement store of value, and thus heir apparent to our current economic system.

Investors, the media, and a reasonable proportion of the general public have heard of Bitcoin, and, even at a basic level, understand it. Ethereum’s proposition is more complex: it is a more subtle argument about how smart contracts can power a huge variety of innovations in finance, gambling, gaming, advertising, identity management, and supply chain.

Personally, I see Ethereum’s potential market as greater than Bitcoin’s albeit hard to explain to someone new to the industry!

In the near term, I think the trend for NFTs will help lubricate a great discussion of the role of blockchain in all industries in the near future. I can’t help but think that Ethereum may be more palatable for those who see crypto as ‘the bogeyman’ - a dark force of faceless decentralised, and thus uncontrollable, anonymous revolutionaries. Bitcoin’s anonymous creator (or creators) does not help this fear. Ethereum having a ‘real person’ as a creator, who regularly appears in public espousing the virtues of his technology and its uses make it considerably less frightening to sceptics.

Recently Ethereum has broken two all-time highs in quick succession: $2k on the 2nd April, and $2,187 ten days later. Ethereum deserves its time in the spotlight, and it would be good to see more mainstream and crypto media giving it the limelight it deserves. I would expect, therefore, in the medium term to see more investors and treasuries alike increasing their Ethereum holdings.

This article was contributed by Katharine Wooller, MD at Dacxi

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