Table of Contents
Ether – Introduction
Currently regarded as the next Bitcoin, Ether is the unit of currency on the Ethereum network. The cryptocurrency system operates using a Blockchain technology, and this is the basis of its superiority to the traditional method of financial transactions. Just like its Bitcoin counterpart, it has its own form of Blockchain, which is Ethereum and this is an information transformation transfer platform which cannot be altered or manipulated. It is, therefore, a token which acts as an incentive for services on the Ethereum platform. Always see this token, as an alternative to Bitcoin, because as a matter of fact, it was made to do what Bitcoin cannot be built on a different and more accommodating set of principles.
When and why was Ether developed?
This digital currency was developed by Vitalik Buterin, a cryptocurrency researcher, and programmer, through crowdfunding, which took place between July and August 2014. It was in 2015 that it was released with 11.9 million Ether coins pre-mined for the crowd sale.
It was described in Vitalik’s white paper in late 2013, with the aim of creating decentralized applications. He was of the view that Bitcoin needed a scripting language for the development of the application, but since his argument was not supported, he decided to develop a new cryptocurrency platform, with a more generalized scripting language.
Initially, there was skepticism around the security of this coin, but since its development, this digital currency has gone through several protocol upgrades, which have been effective in improving its functionality and efficiency.
Why use Ether?
Initially, in the cryptocurrency world, not many people were willing to make use of any other currency but Bitcoin, Ether changed this. There is really a significant difference between Bitcoin and this currency, while Bitcoin is a digital currency which serves as a form of money, it is simply a token for services rendered within Ethereum. Therefore, they serve pretty different purposes, and for this reason, it is able to stand on its own.
It also has additional features and applications, which make it different (if not better), than Bitcoin. Through Its smart contracts, Ethereum’s Blockchain stored applications are used for negotiation and initiation of contracts, and since Ethereum is a decentralized platform, the possibility of fraud or censorship is extremely difficult. Transactions carried out using this platform are very transparent and verifiable anytime.
Ethereum is enough proof that the Bitcoin Blockchain has the potential for becoming a new form of internet, and with even more advanced features, it could be the next leading cryptocurrency. Frankly speaking, the only downside of this coin is its instability in price; nonetheless, this is also good for Ethereum margin traders even if it may seem unattractive for regular speculators. Being developed as an improvement of Bitcoin, it is the model for any new cryptocurrency.
Ether vs. Bitcoin
In order to grasp the idea and features of Ether, it is important to compare it with the digital currency which inspired its development and release. Since both go side by side on the cryptocurrency charts, let us see how they compete against each other.
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When it comes to the process of how they are generated, the same principles apply as to the basis and reward for successful mining. Both are mined using special mining software and hardware, including Graphics processing units and any GPU which is used to mine Bitcoin, can also be used to mine Ether. However, the Ethereum is also mined faster than Bitcoin and Ether mining is even expected to be more efficient and require less mining subsidy, with the development of a new consensus algorithm know as Casper, hence, while Bitcoin is mined in 10 minutes, it is mined every 10-20 seconds, with less cost and more efficient mining equipment, this is especially beneficial to miners.
The reward for mining every new block of Ethereum is 5 Ether while that of Bitcoin, is currently 12.5 Bitcoins, also, the maximum supply of Bitcoin is 21 million coins, while Ether has no definite number to be mined. 18 million tokens are, however, to be mined yearly.
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This is probably the most important aspect, in the comparison of these two digital currencies, especially for investors, who are always more interested in how much profit can be generated from using Ether. While some of its users see Ethereum as a versatile system, others see it as a medium of investment. Since its creation, Ether, has been a rival of Bitcoin, in price and in 2017, it rose by more than 5000 percent, while Bitcoin rose by over 9 times its price in 2017. Ethereum has a market capitalization of over $40 billion, just about a quarter of Bitcoin’s market capitalization of almost $170 billion. It may not be as quick as Bitcoin, in price increase, but it sure is a wonderful token, to speculate with.
In whichever country Bitcoin is accepted, Ether is also accepted, and in the near future, it will be more acceptable. This is because the shady illegal deals, cyber theft, all of which are supported by Bitcoin blockchain technology, are much more difficult with Ethereum. Russia, however, is one country which has declared that it will not legalize Bitcoin but the Russian president, Vladimir Putin, has also openly endorsed Ethereum, saying it is a potential tool to help diversify the Russian economy beyond oil and gas. His meeting with the founder of Ethereum, Vitalik Buterin, shows that the coin is poised towards greater days soon. Nonetheless, when it comes to the area of actual trade and transactions, there are more Bitcoin merchants and more usage of Bitcoin in market trade worldwide.
Storage and Exchanges
Because Bitcoin is still more valuable than Ethereum, it has more exchanges and wallets, however, many Bitcoin wallets including Trezor and Jaxx now also store Ether, and many Bitcoin exchanges now exchange for Ether also. It is also very easy to directly exchange Bitcoin for Ether and vice versa, on many platforms. Margin trading options also apply for both.
The Ethereum blockchain is very regularly updated, therefore always make sure to stay tuned for the latest updates, especially if you are an investor.