The Trifecta - Part 2 - What is Ethereum ?
When I started researching Ethereum, I could have sworn it was a noble gas in the periodic table. You know right under Helium (maybe that’s why gas can be so dam high), Nope. Ethereum was dreamt by whiz kid Vitaly Dmitriyevich “Vitalik” Buterin a Russian-Canadian programmer. Another notable co-founder is Charles Hoskinson aka Mr. Cardano (ADA) - That’s a story for another day. Any who, Ethereum has the 2nd largest market cap and ranks #2 in cryptocurrencies, today 2/26/22 its Market Cap sits at roughly 333,429,623,983…. peanuts I know.
Ethereum aka Ether (ETH or Ξ) is a decentralized, open source blockchain with smart contract functionality. Okay…let's define some terms here:
Decentralized – the process by which the activities of an organization, particularly those regarding planning and decision making, are distributed or delegated away from central, authoritative location or group. So, when you send eth to another person you are doing so without the need of a bank (Central group). Power to the PEOPLE! Yeah!
Open Source Blockchain – a very public, transparent way to keep records. Uhm… https://etherscan.io/ Just put in your wallet ID and bam…. all your transactions. Nothing escapes the blockchain!
Blockchain – a very long chain of blocks linked together, with all the information about each block known to every member of the blockchain network. This system of recording information makes it difficult or impossible to change, hack, or cheat the system. It is basically a digital ledger of transactions that is distributed across the entire network of computer systems on the blockchain. Imagine a bunch of wise guys bookies with thick opaque glasses keeping an accurate tally of all your bets…I mean transactions. The good news is if you get wrecked, Eth won’t break your legs. Your wife or husband might! But I digress.
Smart contract functionality - A self executing contract with the terms of the agreement between buyer and seller being directly written by lines of code. Examples of this are sending, receiving, borrowing and earning interest on crypto currency. Items can be bought, sold and traded…think nfts. Contracts can be written so every time an artist sells his or her work they get royalties. Sweet!
The beauty of Etherum is that you can build on top of it (making it a Layer 1 blockchain) and it is very popular with all the cool kids. Many great Dapps or decentralized applications can be built on top of Ethereum, that would be layer 2….think Uniswap, OpenSea…Mandox ;)-
Currently, Etherum is trading above 2,800 USD. Cathy Woods from Ark Investments believes by 2030 Eth may be trading at a high of 180,000. So instead of using all your Eth on gas fees, maybe you should start putting some in your mattress…I meant wallet. Note to self! Stuff Eth and Mandox away!
Ethereum's biggest problem is high gas fees or transaction fees. Gas fees are denominated in Gwei which is a different way to represent an amount of Eth. In a nutshell, the busier the network the higher the fees. More defi projects and Luke releasing the tribes of the Mandox Universe is clogging up the system and causing higher fees. Sorry guys!
What’s the solution? The brain trust over Ethereum HQ is implementing 2 stages (the merge and shard chains) which should occur later 2022 and 2023. These upgrades will allow the platform to process thousands of transactions per second and scale globally, this should reduce gas fees. Vitalek needs to hurry up because other Layer 1’s such as Avalanche and Solana have figured the gas issue and are trying to eat his dessert.
I didn’t even begin to discuss Proof or Work and Proof of Stake, so please read further and explore more about Etherum and DYOR!
I am not a Financial Advisor and this is not Financial Advice. Please do your own research. I am not a critically acclaimed writer and this is just for fun. Please excuse any typos or grammatical errors. I am partial to Mandox! It is my way.