Exploring the Ethereum Blockchain

Many of us know Ethereum as a crypto coin but it is even bigger. We know that this is one of the coins listed in the coin market cap and it is in the second rank after Bitcoin whereas if we talk about the altcoins then it is on top. this is very common information that many of us are aware of but apart from this if we talk about the technology part then it is a leading blockchain having thousands of projects built on the network. we have multiple chains now but earlier this was not the case and most of the blockchain projects were built on the ethereum chain. There have been issues in the past with the transaction fee but despite that, most of the projects chose this chain to build their project and it shows that the reliability of this blockchain network is quite high. Today in this post we will try to understand more about the Ethereum blockchain and ETH token.

What is Ethereum

Below is the basic information about Ethereum available on the internet but if we deep down then we can say that its a leading blockchain. The native token for this blockchain is ETH and its value is quite high in the market as of now. Ethereum was launched in the year 2015 and last 8 years, approximately the chain has grown a lot in terms of technology adoption as well as monetary growth for the coin. Its one of the chains that are not limited to one segment instead any type of blockchain project can be created on the chain and this network is scalable so there is never an issue with uptime however congestion is possible sometimes if the number of transactions grows significantly at a moment.

src

Ethereum is a network, made up of many communities, and a set of tools that enable people to transact and communicate without being controlled by a central authority. There is no need to hand over all your details to use Ethereum - you keep control of your data and what is being shared. Ethereum has its cryptocurrency, Ether, which is used to pay for certain activities on the Ethereum network.

src

What is ETH?

ETH is a cryptocurrency or a crypto coin and its the coin that is needed to use the Ethereum blockchain. In simple words, we can say that ETH is the fuel for the Ethereum blockchain because it empowers the chain and even secures the network. We need ETH for making any transaction on the Ethereum blockchain. Now since Ethereum has migrated from PoW to PoS so the need for ETH coin has gone up because the more you stake brings more power to you and that also comes with better rewards. ETH 2.0 is already there and many exchanges provide the notion to stake ETH coins for a certain period and earn rewards on this.

---

Usecase of Ethereum

There are multiple things for which this chain can be used and here are some of the well-known examples. These are just some of the examples but overall the use case is quite wide and it will expand over time because the crypto adoption is growing which will increase chain adoption as well. There have been multiple upgrades for the chain in the past and with all such updates the team is trying to make it an even more scalable and better blockchain in terms of use case and increased adoption.

1- Decentralized finance (DeFi):-

DeFi is one of the most popular methods of investing in the cryptocurrency market because this is not controlled by any 3rd party or intermediary hence people got more attracted to it. This word first started with Ethereum however later on it was expanded to other chains considering the transaction fee because it was high with ETH and other chains were offering low transaction fees for any type of transaction on the DeFi protocol.

2- Stablecoins :-

Stablecoins are an important component in the crypto market because multiple things are dependent on such coins. Again now we have got multiple options through the chains but earlier it was not like this and the majority of tokens were created on ERC-20 which is the Ethereum chain. we still have this option available across the exchanges and that too supported by most of the exchanges but because of the transaction fees users prefer to use another blockchain. As is usher it is always the best option to go for something that is cost-effective in terms of transaction fee and this is where Ethereum loses the battle.

3- Non-fungible tokens (NFTs):-

We can not deny the fact that NFT was such a big hype at one point But later on it was limited to a different audience because the trading was not as easy as we can do with the native tokens however it is still quite popular among the artist and with the ones who are art lovers. There are so many NFT markets available and the majority of them are built on the ethereum blockchain. Even this was started with Ethereum in the beginning but later expanded to other chains.

4- Decentralized applications (dapps):-

Its a rich chain if we talk about the dapps because we have a bunch of decentralized applications available on this blockchain network. Some of the known dapps are Uniswap and 1inch etc that are dex as well but they are built on this blockchain network. this number can keep on increasing over time so if you explore the chain then you will come across so many applications offering different use cases and services on the crypto market.

---

Staking Ethereum (ETH)

This is one of the popular ways on the crypto market and with this chain, it is possible to stake ETH coins and earn staking rewards. This is a way through which we secure the network since its moved to PoS. You will need to stake 32 ETH to activate validator software and as a validator, you get access to processing transactions and even add new blocks to the blockchain which is the core function of the chain.

You'll need 32 ETH to activate your validator, but it is possible to stake less.

• By Staking ETH We earn rewards and this is like a good source of passive income on the crypto market whereas the holding remains the same. There is some requirement to maintain the minimum count but despite this, a bigger chunk of the coins was deposited as part of the Ethereum 2.0 upgrade. With the recent upgrade a bigger quantity of the coin got unlocked however the price is still stable which shows that people like to hold for the long term.
• Staking more ETH also adds up to making the network secure. Its a requirement to hold more ETH to control and the more you stake bring more power hence this is an important mechanism that makes the blockchain network more secure.
• People who stake ETH need not do any proof-of-work as its completely on proof-of-stake so this is a win-win situation for the chain as well as stakers. We can earn rewards by making the network secure and there is no need for energy consumption.

Below is the snapshot of current ETH staking along with several validators and offered APR %.

src

How to use Ethereum

We need a wallet to use ETH and this can be transferred from one wallet to another however Each Ethereum transaction requires a fee in the form of ETH. This transaction fee varies on the number of users trying to use Ethereum at a time and based on that this fee is calculated. We have seen in the past when this transaction fee was quite and and this is because more people were using the chain at that time. This was the time when DeFi on Ethereum was popular and that resulted in the fee increase.

src

We need a wallet to send or receive the ETH and there are multiple wallets available to use. MetaMask is a popular non-custodial wallet that can be used but make sure that you don't share the wallet keys with anyone. In crypto, its simple if you don't own the key then you don't own crypto hence security is foremost.

---

---

Conclusion

Overall Ethereum is one of the leading blockchains and there are some alternative options are also available. Even some of the chains claim that they can replace it but looking at the current adoption, projects, and user base it seems difficult. We can not predict the future but certainly, it will need a lot to replace the Ethereum blockchain at the moment. Maybe in the future, we see something better but for now, it seems difficult however since we have more demand so other chains can also grow at the same time. Its also one of the old blockchains so that also adds up to the trust and reliability and probably that is a plus with the Ethereum network. This is decentralized hence no entity or person is controlling it and the community is everything that is doing to keep the chain growing and running.

Official Web portal- https://ethereum.org/en/

Thank you

Posted Using LeoFinance Alpha