“Ethereum being the second largest cryptocurrency by market capitalization is extremely popular among all making it a sure shot candidate for the factual analysis. A 10 point factual analysis has been done to identify and showcase various facts regarding this emerging giant in the cryptocurrency world.”
What is Ethereum?
Ethereum is the largest Altcoin by market capitalization and the second largest cryptocurrency after Bitcoin itself. With its white paper released in 2013 by the co-founder Vitalik Buterin, Ethereum came into being. Ethereum is an open-source, decentralized blockchain that has embedded smart contract functionality. Due to Ethereum’s blockchain capability of creating tokens and cryptocurrencies, it is the most popular and most used blockchain after Bitcoin. At the time of writing, Ethereum has a market cap of over $563 Billion.
10 Facts about Ethereum that Everyone Must Know
Being such a popular cryptocurrency, there are certain facts about ethereum that every crypto enthusiast must know:
Anime as an Inspirational Source
“Laputa: Castle in the Sky” by Japanese animator was the inspiration behind the ethereum as Vitalik Buterin was fascinated by one of the heroes in the anime who used the magic crystal Aethereum that had the power to extract energy from the air.
Project that was Crowd funded
Ethereum as an idea was born in 2013 and at that time, cryptocurrency as an industry was in its cradle and was not widely known. Lack of resources for converting the idea of Ethereum into a real entity was a daunting task. Thus, a crowd funding initiative was launched that fueled ethereum to become what it is today.
Ethereum is not only popular among the programmers or technological enthusiasts but it has a massive support of the institutions such as, Microsoft, Intel, Banco Santander, J.P.Morgan, Merck GAA, Deloitte, DTCC, ING, Consensys , Accenture, Bank of Canada, Samsung SDS, BNY Mellon and Toyota Research Institute. All these institutions are adopting ethereum based technology into their businesses.
Shift to PoS
Ethereum 1.0 is based on the consensus mechanism of Proof-of-Work that is known for its scalability and transactional delay issues. Hence, with its new Ethereum 2.0 release, Ethereum is planning to move towards Proof of Stake Consensus mechanism that provides lightening fast transactions and scalability capability.
Was not at the Second Spot from the Beginning
Most of the people think that ethereum was at the 2nd spot next to Bitcoin from the beginning but there were other cryptocurrencies such as Litecoin that had their own share of fame. Though, from the moment Ethereum took the 2nd spot, no Altcoin was able to overthrow its supremacy till date.
There is a Capping on the Annual ETH Mining
A very few people know that only 18 Million ETH can be mined in a year. This capping on the mining ensures that the demand for ETH remains lucrative and hence, more miner rewards due to increased price.
No Capping on ETH Supply
Unlike Bitcoin that has a total supply of 21 Million, Ethereum supply is limitless. This creates a problem for ethereum and makes it prone to inflation. With its London hard fork, Ethereum tokens are being burned on every transaction making it deflationary in nature.
Mining will become Less Profitable
After switching to (PoS) consensus mechanism, the mining will become less profitable that it is at present with the (PoW) consensus mechanism. This is one of the most important factors that miners must consider while moving forward.
Network with Two Blockchain
The Ethereum ecosystem was divided into two separate blockchain in 2016 after a hard fork that resulted into two blockchain namely Ethereal (ETH) and Ethereal Classic (ETC).
Has the Largest DeFi Ecosystem
Ethereum has the world’s largest DeFi Ecosystem and is still growing at a rapid pace. This depicts the importance of Ethereum as a platform to build and revolutionize the new world order.
- Ethereum is the most popular cryptocurrency after Bitcoin.
- It was a crowd funded project that was inspired by an Anime.
- It has the largest DeFi Ecosystem along with an extensive Institutional Support.
- With its new version Ethereum 2.0 it is shifting from a PoW consensus mechanism to PoS consensus mechanism and moving towards a deflationary approach.
Disclaimer: The article is meant for the educational purpose only and in no way it should be considered as a financial advice. Own research on the topic is advisable.
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