Ethereum is a cryptocurrency that is growing in popularity.
It has been steadily climbing the charts and making waves on the internet, but what exactly makes Ethereum so unique?
In this blog post, we will explore Ethereum’s history and how it fits into the cryptocurrency ecosystem to better understand why it’s gaining such traction.
What is Ethereum?
Ethereum is the second largest cryptocurrency in the world, just behind Bitcoin. Ethereum was founded in July of 2015 by Vitalik Buterin along with several other developers. Buterin had been working on Ethereum since 2013 and wrote a paper about it in November of that year.
The goal was to create something similar to Bitcoin but with extra features like the ability for more complex contracts and decentralized applications (DApps).
Bitcoin vs. Ethereum: The Key Ethereum vs. Bitcoin: The Key Differences
There are a few important differences between Ethereum and Bitcoin. At high level you can think of Bitcoin as a digital currency akin to digital gold. On the other hand Ethereum is more like a platform. There is a currency called Ether but that is just one of the applications built on Ethereum!
Additionally, Bitcoin has a fixed supply of 21 million tokens which will all be mined by approximately the year 2040.
Ethereum, on the other hand, has no fixed supply meaning that more and more Ethereum are created with every block.
More Energy Efficient
Ethereum also uses much less energy than Bitcoin. One of the main criticisms of Bitcoin is how much energy it uses, with one study estimating that Bitcoin mining consumed more electricity in a year than the entire country of Denmark.
Another study from TRG Datacenters – a company based in Houston, Texas ranked various cryptocurrencies by how much energy (Kilowatt Hours) is necessary to process a transaction. Bitcoin was the least energy efficient.
Bitcoin (BTC) 707 kWh – Least Energy Efficient
Ethereum (ETH) kWh 62.56
Dogecoin 0.12 kWh
Ripple (XRP) 0.0079 kWh
In conclusion, Ethereum has grown in popularity as the world’s second most popular cryptocurrency behind Bitcoin because:
1. Ethereum transactions are faster than Bitcoin transactions
2. Ethereum enables the Decentralized Finance and companies to build financial applications on it without the need for banks and other traditions institutions
3. Ethereum is much more energy efficient than Bitcoin
If you want to buy Ethereum, we wrote a whole blog post on the topic which covers all the best options for buying Ethereum in Canada.
PLEASE READ: With that said, please remember that any investment you make into crypto is highly speculative and the price could go up or down at any time. You should only invest money that you’re willing to lose so that you don’t end up feeling regretful later.