Bitcoin and Ethereum are probably the only two top cryptocurrencies that have now become household names, and almost everyone has heard about them. While Bitcoin is the leading cryptocurrency, Ethereum is the first altcoin that is racing towards grabbing Bitcoin’s top spot. A common string between the two digital currencies is that both are built on blockchain technology. But their features, internal dynamics, and purpose are quite different. Ethereum Cheat Sheet-
If Bitcoin wants to become the future currency, Ethereum ( Ethereum Cheat Sheet) wants to become the platform or medium that powers dApps, NFTs, Defi, and more. When it comes to use cases, Ethereum has the upper hand, as its scope is not limited to facilitating financial transactions alone. This is one reason behind the soaring Ethereum price that has performed consistently well in the market.
If you’re a newbie crypto investor or a crypto enthusiast who wants to enter the market with some strong cryptocurrencies, Ethereum should be one of your picks. To make your trading journey easier, we’ve done most of the research and listed down information you should know before investing in Ethereum.
How Exactly Does Ethereum Work?
Now that you’re aware of what Ethereum is, it’s time to gather some information about its work process. Knowing it will help you understand Ethereum better. The entire network runs on node operators who process transactions using their computers, also called nodes. The computer must have the necessary hardware and software to support the transaction validating process and currency minting processes to run these nodes. To facilitate each transaction, users are required to pay gas or ETH, Ethereum’s native cryptocurrency, which is awarded to the node operators.
Similar to Bitcoin, Ethereum uses its robust peer-to-peer transactions and tracks who owns the cryptocurrency. In addition, independent developers can create and host decentralized applications on the platform. These dApps are created using the platform’s smart contract features. Smart contracts can be best explained as small programs stored on the Ethereum blockchain network that self-execute when specific conditions are met. You can consider smart contracts as the backend of a program, while dApps are the front end.
Are ETH and Ethereum the Same?
The two often work in tandem, but they’re certainly not the same. ETH is the native cryptocurrency of the Ethereum platform, while blockchain-based Ethereum is the technology in use. ETH or Ether can be best described as the cash or fuel that powers the whole Ethereum network. Those interested in buying Ethereum will have to invest in ETH through a reliable exchange platform. You can easily convert the ETH to INR to know how much 1 ETH coin will cost you in your native fiat currency, i.e., Indian Rupee for Indians.
Once you invest in ETH, you can either hold it to trade later for higher prices or use the same to buy products and services. Since the ETH price is subject to high volatility, it is normal to witness wild price swings. You may buy it at a high price on a given day, and its price can significantly fall down the very next day or vice-versa. You can also use ETH to run dApps, NFT platforms, Defi applications, and more on the Ethereum network.
Forks of Ethereum
Ever since its launch, Ethereum has changed quite a lot. And whenever a change happens in blockchain technology, a fork can occur. This fork can be hard or soft, depending on the nature of change. For the uninitiated, soft forks refer to minor backward-compatible changes. On the other hand, blockchain’s hard forks are major upgrades that significantly change the entire blockchain-based system and aren’t backward compatible.
In the case of soft forks, node operators can stay connected to the blockchain, but they are offered incentives to upgrade to the latest version if they wish to continue earning ETH. In the event of hard forks, node operators don’t have any other option but to switch to the latest upgrade to keep the blockchain-based network going. But if there’s a disagreement owing to the hard fork, it can result in a split having two competing blockchains. To prevent such splits, changes are first proposed and discussed with node operators to arrive at a consensus before making the changes.
Take Ethereum 2.0, for example. It is a multi-step upgrade that will be completed by early 2022. The node operators agreed-upon proposed changes for Ethereum 2.0 to make the entire platform more scalable and environmentally sustainable.
Is Ethereum or Ethereum Cheat Sheet a Good Investment?
Ethereum is one of the few cryptocurrencies with real-life utilities, and multiple use cases can be formed from it. But it cannot be the only investment bias when purchasing cryptocurrency. As an investor, Ethereum is the right pick for you only if it aligns with your individual investment goals and you acknowledge the fact that its prices are subject to wild swings. Volatility and speculation play a major role in Ethereum cryptocurrency’s prices, so consider all these things before coming to any investment decision. There is no one cryptocurrency that will be right for everyone, so never forget to conduct your own research diligently before making an investment decision.