Bitcoin has many virtual competitors. The nearest competitor is Ethereum. Over time Ethereum has gained popularity and triumphant over other rivals of Bitcoin.
Ethereum is a global computer network with its own virtual currency named Ether.
Ethereum – What is it?
Ethereum software defines rules on which global computing network operates which is called Ethereum. This network can be programmed to complete specific computing tasks with all the computers on the network, to ensure that they are performed correctly while working parallel. Usually, the task involves money.
Vitalik Buterin the creator of Ethereum wanted to create software just like a programmable global smartphone which has apps on top. Ethereum apps are called Dapps, as they run on a decentralized network of computers.
Name “Ethereum” was chosen because of the hypothetical invisible medium that allows the light to travel, which penetrates through the universe. Ethereum was announced during 2013 but came into operation by 2015.
Ethereum – Is it a virtual currency?
Ether is the virtual currency of its own on Ethereum network. Ether is paid to other computers on the network to complete the task. It costs to use the network.
Most people buy and hold Ether hoping that it will become more valuable in the future. As more and more people use the network, they will need Ether to pay for the networks computing power.
Ethereum – Is it related to Bitcoin?
Mr. Buterin was very enthusiastic about Bitcoin and was enthralled by its success. He wanted something more than what Bitcoin can do. He wanted to build such a program which can perform more and more complex financial transactions.
Every transaction and computation that is performed is shared on Ethereum network and is known as the block chain. These shared records are nearly similar to block chain in Bitcoin. The difference is that Ethereum‘s block chain does not completely depend on Bitcoin block chain in any way.
Ethereum – Who will use this network?
Assuming there are two parties which are involved in a complicated financial transaction and do not trust each other. They hire a third party to conduct the transaction and are ready to pay the required fee. With Ethereum, they both can check the records and can carry out the transaction on a shared computer thus saving on fees.
From the above example, it is clear that Ethereum is more attractive to those companies which have a huge number of complicated financial transactions on their hand. Many banks shared opinion that Ethereum could be used as a central operating system for different trading markets. As a result, it will replace exchanges and middlemen (brokers). Quorum, created by JPMorgan Chase is their version of Ethereum.
Toyota and Samsung are experimenting with Ethereum in their industry. Their product moves through supply chains that involve many players and has to be tracked.
Enterprise Ethereum Alliance is a group which consists of dozens of large companies across the world. They have come together to develop the useful version of Ethereum. This developed version will be used in their corporate setting. They can set up their private networks which will be different from public Ethereum network and will not use Ether currency.