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What Is Ethereum and How Does It Work?

What is the second cryptocurrency and the first altcoin? The common answer is Ethereum. Still, it is quite special, and one needs to learn more about it to understand its differences. For example, its functions are much wider than those of Bitcoin. If you want to know why Ethereum is needed, how it works, who is behind it, and whether it is worth buying as an investment, you will find the answers further.

Definition and Basic Terms

Ethereum was developed to be a universal system of contracts that utilize blockchain technology. That is why it is not a cryptocurrency at all. The latter, of course, is needed to run apps inside the system and is called Ether.The system that got the name Ethereum can be utilized for the creation of any service or app. As for Ether (ETH), it is a token that transfers information inside this service. Therefore, the latter is more similar to ordinary banknotes that we are used to.

Token, as a unit of information, can be:

•Non-fungible or unique.•Fungible, which is true for Ether that needs this property to be used as money.

The latter is traded on the stock exchange just like traditional currencies, so its rate is volatile. Still, you can easily find Ethereum price USD at and see the current changes in the situation.

The system automatically executes smart contracts. The base for this action is a special algorithm that cannot be changed after all parties sign it. The main advantage of smart contracts is the absence of intermediaries to ensure their execution.

Altogether, this financial system accepts Ether as money and concludes smart contracts for different transactions.Moreover, this technology is beneficial because a lot of apps are launched using it. They

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