Guides to Cryptocurrencies
Ethereum Picture

Founder: Vitalik Buterin

Prominent Group: Ethereum Foundation

Protocol: Proof-of-Work (PoW)

Speed: Around 15 TPS

Chinese Name: 以太坊

Whitepaper:


2. Ethereum (ETH)

Overview

Ethereum is a public, open-source, blockchain based software cryptocurrency platform and operating system with smart contract functionality that allows developers to build and deploy decentralized applications on its blockchain. Ethereum and its whitepaper were introduced in late 2013 by Vitalik Buterin with $18.4 million raised for development work at the end of its ICO event in August 2014. Vitalik Buterin went on to lead a team, developed and successfully launched Ethereum on 30 July 2015.


Vitalik Buterin and Eth Logo picture


Consensus Protocol

Ethereum uses the same Proof of Work (PoW) mining process and consensus protocol as Bitcoin. Miners compete with each other to solve mathematical puzzles, the winner will get to validate transactions and create a new block on the blockchain to earn new ETH cryptocurrency reward. Ethereum mining is mainly done with GPUs while bitcoin professional miners use ASIC mining rigs.


Ethereum mining rigs

Caption: Ethereum mining rigs.

ETH vs BTC

The difference between Ethereum and Bitcoin is block creation time. Bitcoin’s block creation time is limited at 10 minutes while Ethereum’s block creation time is around 14 seconds. BTC founder, Satoshi Nakamoto designed Bitcoin to have block creation target of 10 minutes for allowing the blockchain more time to propagate new block to the entire network before creating another block. Bitcoin’s block creation time of 10 minutes is to prevent block orphaning on the blockchain by invalidating one of the block if two or more blocks are found at the same time.


Ethereum on the other hand allows orphaned block to be accepted into the blockchain which will result in faster block creation time. Miners who include orphaned blocks will get slightly more block rewards but lesser rate of return for mining a more difficult block that will result in a longer chain. Some Bitcoin supporters argued that faster block time results in a less secure network and that a single bitcoin confirmation is more trustworthy as compared to an Ethereum confirmation.


Native Token

Ether, popularly known as the fuel that runs Ethereum, is a cryptocurrency generated by the Ethereum platform on the blockchain. Ether’s abbreviation is ETH and it can be used as a form of cryptocurrency payment made by the clients of the platform to the machines executing the requested operations. Ether's block time creation is around 14 to 15 seconds, compared to 10 minutes for bitcoin.


Ether coins had the second largest cryptocurrency market cap of more than $27.9 billion USD with a total coin circulating supply of around 106 million as of 03 June 2019. At present, there is no implemented hard cap on the total supply of Ether.


ERC-20 Technical Standard

ERC-20 is the technical standard used by all smart contracts that are using the Ethereum blockchain. ERC-20 technical standard defines a complete list of rules that all tokens must comform to within the Ethereum ecosystem. ERC-20 token standard became popular with organizations that were looking to raise funds through Initial Coin Offering (ICO) crowdfunding. The reason is that ERC-20 technical standard is not complicated to be deployed and there is interoperability potential with other Ethereum token standards. Among the most well-known ERC-20 token sales were launched by the EOS and Tron teams to raise funds for their cryptocurrency and blockchain developments.


NEXT: 1. Read Bitcoin (BTC) Cryptocurrency Guide