What Is Ethereum and How Does It Work?

Ethereum (ETH) is the second-largest cryptocurrency in the world in terms of market cap. Since you’re reading this, you obviously want to learn more about Ethereum and how it is different from other cryptocurrencies. It’s also possible that you’re trying to exchange your LTC for ETH. In any case, this article is for you.

Ethereum Essentials

What Is Ethereum and How Does It Work?

Ethereum is a decentralized computing system based on blockchain technology. Unlike Bitcoin, people can create decentralized applications and smart contracts on the Ethereum blockchain.

During the coin mining process, the blockchain performs computations. It is this key feature that makes it the world’s foremost distributed and decentralized computing platform.

About the Ethereum Coin

The Ethereum coin is called Ether or ETH. Ether is the virtual gasoline that was initially used to fuel activities on the blockchain. These days, however, ETH has advanced into a global store of value, medium of exchange, and trading asset.

What Is a Smart Contract?

Smart contracts on the Ethereum blockchain are immutable self-executing virtual contracts. These contracts are unique because the terms for all parties involved are predetermined and written in codes.

Since the Ethereum network is decentralized, everyone with access to the distributed ledger can see the smart contract. While all smart contract transactions can be tracked efficiently, they are irreversible.

Who Created Ethereum?

ETH was developed by Vitalik Buterin in 2015. However, Gavin Wood has been listed as one of the developers who were instrumental in creating the platform.

Advantages of Ethereum Investing

  • There are currently over 3,000 dapps on the Ethereum blockchain, and this is just one of its functions.
  • The Ethereum blockchain is ever-evolving, and each innovation brings its developers closer to solving fundamental problems.

Main Disadvantages of Ethereum Investing

  • Transaction costs on the Ethereum network are high and increase with network activity.
  • Ethereum doesn’t have a general maximum supply number, so there is a risk of inflation when demand doesn’t match supply.

Price Chronicle of Ethereum

The price history of Ethereum is illustrated below:

  • During the 2017/2018 bull run: The price of Ethereum reached $1,417. Shortly after that, the cryptocurrency started to fall, spending the whole of 2018, 2019, and most of 2020 stuck in a downward slope.
  • Toward the end of 2020: The Ethereum token picked up and has maintained a relatively bullish sentiment since then, trading at around $3,400 at the time of writing.

Ethereum Price Predictions (2022-2025)

There are several Ethereum price predictions at this time. Two of the most common place the token as high as $10,135 in 2022 and $22,823 in 2025.

Reasons to Have Ethereum Today

  • Ether has more use cases than Bitcoin.
  • Microsoft, IBM, and many other Fortune 500 companies are investing in Ethereum.
  • Thanks to the Enterprise Ethereum Alliance, Ethereum has what it takes to revolutionize the financial industry.

Where to Easily Exchange LTC for ETH

Godex is a decentralized peer-to-peer cryptocurrency exchange. You can convert LTC to ETH with Godex.io in just a few minutes.

Conclusion

Before you make any cryptocurrency investment, always remember to check general information. Now that you understand how Ethereum works, you can decide whether it is a good idea to trade LTC for ETH on Godex.

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