What is Ethereum, and why does it matter in the blockchain world?

Ethereum moved to proof of stake in September 2022, so it can no longer be mined. This article is from March 2019 and is kept as written.

Digital currencies are enormously popular at the moment, because they can be used for all sorts of transactions, and because new ones appear all the time — which lets traders pick whichever currency suits them, watching the trends up and down and reading the charts and the data properly. Today we are going to talk about Ethereum: where it came from, and why crypto owners are so fond of it.

Ethereum is one of the digital currencies, developed by a young Russian named Vitalik Buterin, who had previously been part of the Bitcoin development team. He wanted to create this coin so that it could be used like Bitcoin but with more capability, in order to meet what users actually wanted. So this currency is not limited to one kind of use — it can be used to run all sorts of business as well. In truth Ethereum and Bitcoin are not different at all: both are digital currencies, both can be mined, and both can be bought and sold for a profit. In some countries, Japan and Switzerland in particular, they are accepted for buying goods and services. Where Bitcoin does differ is that it is only a currency — it cannot be developed or made to do much else. Ethereum, on the other hand, lets anyone write on the currency and help develop it, because it is open source. That is an advantage: it makes the currency accessible to everybody, and it can be developed to serve the people using it. You may have heard the term ERC20 many times in the crypto world; ERC20 is, put simply, the smart contract system on the Ethereum platform used to create tokens. Read more about ERC20 here.

Ethereum's popularity looks set to keep growing, alongside the growth of other currencies, and you can decide for yourself what kind of investment you want and what you want to do with this currency — paying for things, for instance, or a car rental or ride-hailing business using the smart contract system that is unique to Ethereum, much like Uber, Grab Bike or Grab Taxi, but differing in that paying for the service through the Ethereum platform does not have to go through a middleman. This is why a great many investors are interested in Ethereum. Even so, you have to understand that every investment carries risk, so be careful with it — because although these things have been invented, in reality they are only just being tested and have not yet been put to use in real life.

So if you are interested in investing in Ethereum, study the market trends properly first, and analyse the information carefully before deciding, so that you make as much profit as possible and can accept the loss if it goes the other way. Do not put too much faith in the experts — analyse as much as you can yourself, because using your own experience is what will let you invest at the right moment, effectively, and get what you want out of it.