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Ethereum – How Does It Work? And a Brief History

Cryptocurrency is going crazy right now. It seems everyone has a cryptocoin in their crypto wallets in their phones right now. It is the hottest trend in the world right now. Even people who haven’t invested in crypto have heard a lot about it. Blockchain, cryptocurrency, Bitcoin, Ethereum; all of these are words that everyone knows these days. And Ethereum has exploded just like Bitcoin to the point where it has become equally as important, if not more. 

In this blog, we will take a look at Ethereum, how it works, what its history is and how you can buy Ethereum in Pakistan.

What is Ethereum?

First of all, let’s take a look at what Ethereum actually is. Is it a cryptocurrency like Bitcoin? Yes, and no. Ethereum is actually an open-source platform on the blockchain that can do much more than just facilitate cryptocurrency trading. This means that Ethereum not only allows people to buy and sell the cryptocoin but it also allows users to build all sorts of decentralized apps and platforms that are based on the blockchain design of the Ethereum platform. 

Some argue that this versatility makes it a much better alternative to Bitcoin. This has led to aggressive growth in Ethereum’s popularity that many think will lead to it overtaking Bitcoin one day. 

History of Ethereum

The most popular co-founder of the Ethereum blockchain platform is Vitalik Buterin. He was intrigued by the idea of blockchain technology and got involved in the community when he was just 17 and a nascent programmer. He saw the use of Bitcoin and thought that it could be so much more than that. 

That blockchain technology did not have to be limited to just financial transactions. This led to the founding of the Ethereum platform along with other co-founders. The key difference between Bitcoin and Ethereum, to make it simple, is that Bitcoin is purely based on financial transactions. Whereas, on the Ethereum platform, the average user can trade much more than just cryptocurrencies. 

Ethereum was officially launched in 2014 after a very successful round of crowdsourcing. They sold people Ether tokens and, in the end, raised over $18 million dollars. And since then, the growth and popularity of Ethereum have been visible to everyone. 

The ultimate goal of Ethereum, in the mind of Buterin, was a versatile blockchain platform without a specialized use that was accessible to everyone.  

Difference Between Ethereum and Bitcoin

There are, of course, large similarities between Bitcoin and Ethereum because they are both based on blockchain technologies. But there are also key differences that can be used to separate the two. Let’s take a look at some of them.

  • Bitcoin trades purely in cryptocurrencies. In comparison, Ethereum offers a platform where cryptocurrency in the form of Ether is available for trade. But also, there are smart contract EVMs available. EVMs, short for Ethereum Virtual Machines, is a virtual software platform that can be used to create decentralised applications on the Ethereum blockchain.
  • They are based on separate proofing security protocols. Ethereum uses a “proof of stake” protocol, while Bitcoin uses a “proof of work” protocol.
  • Bitcoin allows for only public transactions to take place on its blockchain network. In contrast, Ethereum allows for both public and private transactions to take place on its blockchain network.
  • Due to the still massive popularity of Bitcoin, it is estimated that almost all of the 21 million Bitcoins have already been mined. In comparison, only half of the 90 million Ether coins have been mined by estimate, which increases the mining ability of Ethereum by a lot more.

Advantages of Ethereum

The main argument of advantages that Ethereum has over Bitcoin is the versatility in use. Since Bitcoin’s blockchain is limited only to financial transaction use, people only use it for just that. But Ethereum’s blockchain allows people to develop blockchain-based software that is growing in use. 

Ethereum’s blockchain is also the basis for Non-Fungible Tokens (NFTs), which has gained popularity by a massive amount in the last couple of years. Ethereum has been dubbed the “hottest platform in the world of cryptocurrencies” by global firms and companies that have invested in it. 

Though it experienced an era of fluctuation in its early days and still suffers from growing pains as people discover just how high the potential for this technology is, it has since stabilized and become a very reliable blockchain platform for people, financially and otherwise. 

Where to Buy Ethereum in Pakistan?

There are many places in Pakistan, but by far, the best and most reliable platform is PKR2Dollar. Many consider us the best Ethereum exchanger in Pakistan because of the service we offer and how good it is.

Conclusion

The possibilities for Ethereum are endless. And as blockchain technology grows in popularity, we will surely discover how far it goes. That is why we say this is a great time to get into the Ethereum market. So, contact us today and begin your journey into Eth exchanging in Pakistan today!