Ethereum is the second most popular crypto after Bitcoin. It is commonly known by investors for its native token, ETH. The complex platform got the attention of developers in various industries thanks to the programmable blockchain that allows users to create their own decentralized finance applications to benefit from high levels of security and full encryption of their data. Nowadays, organizations seek innovation and security, so with Ethereum, they found the perfect way to serve their needs. The advanced blockchain can also automatize some processes with digital contracts (smart contracts) to facilitate the agreements between multiple parties. However, despite the benefits for companies, anyone can use Ethereum, as it’s scalable, programmable, and secure. The digital coin can be used by investors to earn potential returns or tokenize assets like real estate and collectible items (NFTs). In this article, we are going to explore the main aspects that make Ethereum stand out in the market:
Bitcoin vs Ethereum
Ethereum offers the first programmable blockchain in the world, giving users more control and freedom. This project eliminates the need for third parties like financial institutions, enabling you to access a global market without a bank or company charging additional and larger fees. Developers can create applications (DApps) like the most popular ones for decentralized finance services (Defi), which is one of the most popular developing fields in the network. Bitcoin is mainly a store of value that investors and traders use to earn profit, while Ethereum is more functional, and due to its programmable system, it has higher transaction activity. They both present the biggest opportunities for growth, and they may be less volatile than other altcoins. You can check the Eth price prediction to see what the future holds for the popular currency.
Proof-of-stake validation
Proof of stake is the underlying validation process of Ethereum’s consensus mechanism. PoS validators deposit capital in the form of ETH, proving that they have put something of value into the network, which can be destroyed if fraudulent activity is detected. They are responsible for validating the new blocks of transactions before adding them to the blockchain. Ethereum addresses environmental concerns through proof of stake, as the process requires less energy because mining is not intensively conducted like for crypto like Bitcoin, which relies on proof of work. Furthermore, PoS introduces a structured timing mechanism divided into slots and epochs. Slots are 12-second intervals for selecting the validators to propose new blocks. An epoch lasts 6.4 minutes and consists of 32 slots, and it’s the time when a group of validators is selected to create a committee that will vote on the block’s validity.
Smart contracts
Smart contracts are the most transformative innovation in the crypto market. They’re represented by some computer codes; they facilitate transactions, exchanges, and data sharing. They replace the physical papers but share the same goal, as they are virtual agreements that can be signed between multiple parties. Smart contracts are not directly controlled by users, but they work as deployed programs on the network once the developers submit transactions that execute a function mentioned on the digital contract. These regulations are a way to guarantee that you execute what is advertised on the contract. They have many use cases; they can create currency, store data, generate graphics, send communications, or mint NFTs. They can be used by companies or individuals to activate their field, facilitate transactions with worldwide clients, and create decentralized applications like finance services or even games.
DeFi
DeFi is the term that describes financial services on Ethereum’s public blockchain. These decentralized applications do all the things that the traditional financial system does, like trade assets, earn interest, buy insurance, borrow, and lend. Still, compared to the banks, DeFi doesn’t require the involvement of third parties, and the actions are faster, promoting ease of worldwide outreach. This innovative concept serves the needs of organizations that seek transparency, as the transactions are visible to everyone involved. Also, it’s flexible since you can move your assets anytime, anywhere without waiting several days for the process to finish and pay exorbitant fees. Another essential feature about DeFi is that you are anonymous, as you don’t have to provide a name or any personal information.
NFTs
NFTs are non-fungible tokens that are individually unique. Each NFT has one-of-a-kind features and properties, and, unlike fiat money, where the bills look the same, investors are thrilled about the uniqueness of these tokens, and they care about the specific ones they own. NFTs can prove the ownership of an asset on the Ethereum blockchain, and you can buy, sell, and trade them freely. The digital tokens can be used for many things; for example, you can tokenize real-world assets like real estate, own items for games, certify the completion of a course, gate access to some content, and even digital art for users who want to create unique artworks and sell them on the market with complete control over their profits.
Speed
Last but not least, another thing that sets Ethereum apart from other cryptocurrencies is the speed of transactions. In comparison, Bitcoin currently processes 7 transactions per second, while Ethereum’s transaction speed is 15 TPS. However, through the PoS mechanism, in the near future, Ethereum will be able to process from 20.000 to 100.000 transactions per second. This transformative technology promises multiple benefits for organizations, developers, and investors who want to perform transactions quickly and easily to reach their highest potential.
The bottom line
Understandably, all the aspects we presented above make Ethereum unique. Besides promoting the ease of any activity users want to conduct on the blockchain and offering innovative solutions, the best thing is that it’s accessible to anyone. Ethereum is a coin that serves it all, suiting the needs of organizations that seek efficient and transformative solutions and individuals who want to embrace the investment opportunities of the platform to earn financial freedom.
