With the popularity of the first global cryptocurrency, Bitcoin, transactions with it became slow. It has become inconvenient and inefficient to deploy smart contracts on the Bitcoin blockchain. This was the prerequisite for the emergence of a new platform for creating smart contracts — Ethereum.
The history of Ethereum began back in 2013, with an idea that came to Vitalik Buterin. To implement his project, Vitalik Buterin initiated a crowdsale (fundraising to implement the startup). In July 2014, 25,000 Bitcoins (BTC) with a market capitalization of $17 million were raised.
The funds raised were used to launch a global open-source platform, Ethereum, in 2015. The platform gave impetus to developing new technologies, making ltc to iban exchange affordable and secure.
Imagine that Ethereum is a smart computer with many private computers. They form a decentralized system. They do not need a third party to exchange information. The system is controlled by the users of the network themselves.
You can be anywhere, as long as you have access to the Ethereum platform. Information on the network is transmitted directly from one person to another. This form of data transfer is called a peer-to-peer (P2P) system. There is no centralized management.
To interact on the Ethereum platform, it is not necessary to know users or meet them in person. The system works through smart contracts (smart contracts).
Smart contracts are computer algorithms. It fully spells out the subject and terms of the “deal.” It also has a procedure for executing the terms in a fully automatic mode without the involvement of a third party (bank, notary, state, witness, etc.).
Thanks to the smart contract system of the Ethereum platform, there is no need for a third party. You don’t need to go to the bank to make a transfer. All you have to do is select the address of the Ethereum contract wallet and make the transfer. At this time, Ethereum is launching a smart contract. It works like a vending machine, programmed to automatically follow the rules.
Once the smart contract is agreed upon and signed by the parties to the transaction, it is checked by the nodes to ensure that it follows the network’s consensus. It is then automatically executed and embedded in the blockchain. This makes it resistant to tampering and changes.
Ethereum is a decentralized global platform, and its value lies in its ability to write code to manage assets and create applications that can be accessed from anywhere in the world. The programs and services that keep the platform running require processing power, and that power is not free. That’s what Ether, or Ethereum, is for.
Ether (ETH) is the native unit of account of the Ethereum platform, a bearer of digital assets similar to securities or bonds, and is used as the “currency” of the platform. Ether is like cash, which does not require a third party to validate or verify a transaction.
Another important function of Ether is to ensure the security of the Ethereum platform. Decentralized applications pay a small fee to use Ether every time they run or use the network. With this method of paying for ether, since ether is the fuel that the platform’s applications run on, ETH can be stored in a trastra crypto wallet.
The need to pay with ether prevents malicious applications with loops that are designed to slow down the network by repeatedly running them, making it unprofitable and too expensive to run such programs.