What is Ethereum and how did it come about?
Ethereum is a digital platform that adopts blockchain technology and expands its use to a wide variety of applications. Ether is its native cryptocurrency, the second largest in the market.
The Ethereum platform was created in 2015 by the programmer Vitalik Buterin, with the main idea of creating an instrument for decentralized and collaborative applications. Its native cryptocurrency is Ether (ETH), a token that can be used in transactions using this software. Like bitcoin, ether exists as part of an autonomous peer-to-peer financial system, free from government intervention.
In January 2016, ether was trading around $1, and in January 2018, the cryptocurrency hit its all-time high trading at $1,391. However, in October 2020 ether is trading far from its all-time high below $390, currently trading at $1,911. It has proven to be volatile, with frequent intraday fluctuations. Although this is only one among hundreds of cryptocurrencies, it is also one of the few that have a significant market capitalization, along with its rivals, bitcoin and bitcoin cash.
How does it work
Ether uses a shared digital ledger where all transactions are recorded. It is publicly accessible, completely transparent and very difficult to modify.
This digital book is known as a ‘blockchain’ or ‘chain of blocks’, and is generated through data mining.
The miners are in charge of verifying groups of ether transactions to form ‘blocks’ and code them by solving complex algorithms. These algorithms can be more or less difficult, as a way to maintain a certain consistency in the processing time of the blocks.
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