Ethereum is a system that was first introduced at the North American Bitcoin Conference by its founder, Vitalik Buterin. Although it is generally seen as an altcoin, it is an innovative system that aims to develop blockchain technology and use it in more areas.
In short, it is a Crypto Operating System that takes the cryptocurrency Ether (ETH) as its power source. The aim is to enable users to create new software on the blockchain system that Bitcoin is connected to. Thanks to this freedom that Ethereum provides to users, it allows to issue many altcoins .
The purpose of the Ethereum system is to prevent the storage of information such as personal data by third parties and their use for different purposes. Today, almost all the transactions we make on the internet (shopping, banking transactions, our use of social media, our internet history, etc.) are recorded in data banks as data. For what purposes this information will be used is a complete unknown.
With the Ethereum system, these transactions are stored on many different devices in a completely scattered and anonymous way. Thus, access to this information becomes impossible and turns the entire internet into a decentralized platform.
In order to produce software that will be included in this decentralized system, Ether aims to use the cryptocurrency as a fuel in one way.
Can It Compete With Bitcoin?
It is currently the second-largest cryptocurrency after Bitcoin. The fact that its value has increased in a short time and is more innovative than the Bitcoin blockchain has brought to mind the question that Ethereum can be a competitor to Bitcoin. However, its founder, Vitalik Buterin, has the following to say about it:
“If we are comparing cryptocurrencies with the valuable resources in the world and we consider Bitcoin as GOLD and Litecoin as SILVER, then Ethereum is OIL. Because the underlying technology will be the energy source in the world’s internet system. Just as oil is used in many sectors and technologies in the world, the same is true for Ethereum technology. This is why we refer to Ether as ‘crypto fuel’. The energy needed by the platform will be provided with Ether (ETH).
As it can be understood from Buterin’s statement, Ethereum does not have a goal of competing with Bitcoin. We also see that the entire founding team has been among blockchain and Bitcoin developers since the first days of Bitcoin.
What are the Differences Between Ethereum and Bitcoin?
• While the transactions you can do with the Bitcoin system are certain, you can produce new systems and new altcoins with very different software with the Ethereum system.
• The Ethereum system is a more innovative system than the Bitcoin blockchain system.
• In Bitcoin mining, you earn according to your processor power, while in Ethereum mining, a balance is observed between the producers.
• It takes 10 minutes for a block to form in the Bitcoin system. In the Ethereum system, the confirmation time is much shorter, since the formation time of a block is 15 seconds.
How is Ethereum Mining Done?
Mining is an important factor for the continuity and security of this system with the same Bitcoin logic. In order for Ethereum mining to be done by everyone, the system requirement is not made with special production devices as in Bitcoin mining, but with a graphics card (GPU). The increase in the number of miners causes a decrease in earnings day by day.
How Is Ethereum Produced?
Although it seems like the same method as Bitcoin production, its production provides some advantages due to some minor differences.
For Ethereum production, you must first create a Wallet. After installing the necessary programs, you can start production. You can produce individually as well as in a pool. Being included in the pool will increase your production.
For its manufacture you do not need devices with high processors. Production is done over the graphics card (GPU).
The Relationship of Ethereum and Altcoins
Since the Ethereum system is a suitable environment for the creation of many new software, it is a system in which many new coins that have emerged later are traded. In order to launch a new coin, Initial Coin Offerings, called ICOs , collect funds massively before it is released, and the funds are made with Ether, the monetary value of the Ethereum system. Thus, it acts as a system that allows new cryptocurrencies to enter the circulation.
There have been many cases of fraud in ICOs, which are seen as unreliable by many.
How to Buy Ethereum?
In Turkey, buying ETH with Turkish Lira is a very easy and fast process, contrary to popular belief. You can buy it without the need for any technical knowledge. You can buy from many crypto currency exchanges in Turkey.