Ethereum Price CAD (ETH CAD)
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Popularity: #2 Most Popular Cryptocurrency (Bitcoin is #1)
What Is Ethereum?
Ethereum is a blockchain technology and cryptocurrency. It was invented by Russian-Canadian software developer Vitalik Buterin in 2013, and it has since gone on to become the second most valuable cryptocurrency after Bitcoin. Ethereum is also one of the few cryptocurrencies that can be mined with graphics cards from an ecommerce store like ebay or amazon (most other coins need expensive specialized hardware).
Ethereum was designed to function more like a programming language than just a digital currency. Like other cryptocurrencies, ethereum has its own blockchain and works by recording transactions between two parties in an immutable ledger. However, ethereum is unique because developers can use ethereum’s platform to create smart contracts that are recorded on the ethereum blockchain.
Ethereum is an open-source software platform that allows developers to create cryptocurrencies and digital applications.
The decentralized blockchain system has a total of eight co-founders and was launched in 2015. The most well-known co-founder is Vitalik Buterin, who wrote the original white paper and still works to improve the Ethereum platform to this day.
Before this, Buterin co-founded Bitcoin Magazine and worked as a leading writer before leaving to pursue a career with Ledger as an editorial board member.
The main goal of Ethereum is to become the world’s go-to platform for decentralized applications. Users from around the globe can write and run software that is free from censorship and fraud.
The blockchain technology used by Ethereum is regarded as highly sophisticated when compared to the Bitcoin blockchain. Some even think it may one day take the lead to knock Bitcoin from the number one spot on the crypto league table.
What Is Ether?
Ether (ETH) is the native token of Ethereum and is used to facilitate operations on the platform. It is the world’s second-largest digital currency, with Bitcoin taking the lead.
Although Ether is thought of as the currency of Ethereum, it is in fact more like a ‘fuel.’ It is used as a medium of exchange on Ethereum and was created for one specific purpose. This is to provide computing power for decentralized applications (Dapps) that run on the Ethereum network.
Ether acts as a currency for developers who want to build applications on the Ethereum network. Therefore, developers who require fewer network resources will have less fees to pay. Those that require more resources will have more fees to pay. You see where we’re going with this?
These Ether fees are based on the size and cost of hosting, running, and executing the applications and transactions.
What Is Ethereum Used For?
Ethereum can be used for a number of reasons and not just to use as a ‘get-rich-quick’ scheme. Let’s take a look at what it can be used for:
Investment
Investing in any cryptocurrency can bring enormous wealth. Even though financial organizations secure our money to an extent, it is not entirely safe. Banks have the ability to inflate, freeze and even repossess assets at the knock of a judge’s gavel.
Ethereum and other cryptocurrencies take this problem away as there are no third parties involved. Anything you make in the crypto-sphere is entirely yours and can never be confiscated.
Decentralized Apps
Ethereum has around 1000 applications running on the network – and this is nothing compared to what the future holds. Users are able to build their very own DeFi apps that may stand out against others and gain popularity.
Fundraising
The Ethereum network can be used for much more than just financial transactions. Fundraising plays a big role in up-and-coming blockchain projects.
Investors are able to fund projects at any location in the world. This gives developers and builders a chance at the success which may not be the case if they were to take the traditional route.
Store of Value
Another great use of Ethereum is that it is a fantastic store of value. Investors that live in areas where the economy is on the verge of collapse can use Ethereum to store funds that third parties cannot dilute.
What Makes Ethereum Unique?
Ethereum has pioneered the idea of a blockchain smart contract platform. The system is unique as it was the first network to execute smart contracts using blockchain technology.
Smart contracts are essential in the crypto-sphere and are needed to cope with the sheer amount of work tasks and transactions filling up a blockchain. They were created to reduce the need for trusted intermediates and congestion along with the blockchain. This, in turn, reduces transaction fees and increases transfer times.
The platform is home to around 280,000 ERC-20-compliant tokens, and this is one reason why Ethereum is so popular. Many of these tokens make up the top 100 cryptocurrencies by market capitalization. These include USDT, BNB, and LINK.
What are Gas Fees?
Put simply – a gas fee is a unit used to measure how much computational power it takes to register on a blockchain. Decentralized networks that charge gas fees (not all of them do) are often covered by the token native to that network.
In this case, gas fees on the Ethereum network are paid for with Ether (ETH) tokens.
When are Gas Fees Charged?
A gas fee is often charged for sending, receiving, or exchanging crypto. They are also charged for running processes that require the use of smart contracts.
Networks such as Ethereum and Bitcoin have come under scrutiny in the past due to extortionate gas fees. This is down to the high usability of the network that creates congestion along with the blockchain.
Top Tip: Gas prices frequently change throughout the day. If you need to pay gas fees, check on Etherscan beforehand to see the best time to pay them. The site also allows you to see different gas prices across the crypto-sphere.
Advantages of Buying into Ethereum
It is safe to say that Ethereum is still in its infancy when we look at its future potential. With only 1000 DeFi apps currently in the network, who knows what this is paving the way for. Buying into Ethereum now could be very rewarding in the future.
We’ve said it once, and we’ll say it again – Ethereum is the second-largest cryptocurrency on the planet. Although any investment is risky, it is nice to know that users can trust this network.
The blockchain technology is recognized, and in April 2021, the European Investment Bank issued its first-ever digital bond ($100 million) using the Ethereum blockchain.
Conclusion
The future is bright for Ethereum as developers continue building Ethereum 2.0 which has been in development since 2017. As it gained popularity, the network began to suffer from poor usability due to congestion on the blockchain.
Its developers saw this as a huge problem and began to move the network from a proof-of-work (PoW) to a proof-of-stake (PoS) system. Once complete, this would speed up transactions and increase usability for users.
PoW systems are the most popular among blockchain technologies and require miners to verify and validate blocks in the system. While this looks great on the front (and it is) – it is extremely costly.
PoS systems do not require miners, and instead of verifying and validating blocks, they create them. Blocks are only validated by stakers when they are not creating them. Stakers can earn rewards for proposing and creating new blocks.
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References
Bitcoin Magazine: Bitcoin News, Articles, Charts, and Guides
What are smart contracts on blockchain? | IBM
Ethereum price today, ETH to USD live, marketcap and chart | CoinMarketCap
EIB issues its first ever digital bond on a public blockchain
What Is Ethereum 2.0 and When Will it Be Released? | SoFi
Disclaimer
Please note that this article should be considered solely for informational purposes and the information contained should not be taken as financial advice or legal advice. Any investments you make are at your own risk and discretion.