What gives Ethereum value?
There is a section in the "What is Ethereum (ETH)? - Ethereum Guide" titled "What gives Ethereum value?"; with this post I hope to contribute an item or two we don't usually hear about from both legacy media and even cryptocurrency-oriented media. Feel free to adjust as needed for Guide purposes.
What gives Ethereum value?
Like its predecessor Bitcoin, Ethereum has tested during numerous highs and lows, during moments of (relative) calm and volatility. Where other much more hyped altcoins shot to the stars only to flame out before reaching the moon, Ethereum stayed standing ready to keep moving forward. While other altcoins survived to lurk in the background, Ethereum survived to be recognized as a leader along with Bitcoin.
Nearly everyone involved in some way with cryptocurrency will gladly accept BTC. Despite the hype it's received in pop culture, not everyone will accept DOGE. Just as many (if not as many) people will gladly accept payment in ETH.
If you're familiar with the early days of iPhone and Android (or even the web browser wars from the era before social media), then you can see something similar happening with cryptocurrencies. As of 2021, Bitcoin and Ethereum are the Big 2.
Contrary to what many people new to cryptocurrency think, smart conracts originated with Ethereum (not Bitcoin). According to global news and research portal CryptoNinjas,
In 2008, Bitcoin, the first cryptocurrency appeared, created on the basis of the revolutionary technology of blockchain, which previously lacked a decentralized ledger. The Bitcoin blockchain does not allow for conditions for concluding a transaction to be prescribed in a new block, as it only contains information on the transaction itself. Nonetheless, the technology’s appearance served as the impetus for developing smart contracts. Five years later, the blockchain platform Ethereum made it possible to use smart contracts in practice. Today the market offers many platforms that allow for the use of smart contracts, but Ethereum remains one of the most widespread. (emphasis added)
Without getting into too much detail, Ethereum can be used to create tokens for virtually anything:
- representation of hard assets such as gold or other real property;
- fungible assets such as stock shares or lottery tickets;
- a game character's skill set or reputation points on an online platform. ERC-20 stands for "Ethereum Request for Comments 20." This is a token standard for implementing an API for tokens within Smart Contracts. A number of well known tokens or cryptocurrencies are ERC-20 tokens, including Basic Attention Token (BAT) and Presearch Token (PRE). The PRE whitepaper notes this property of ERC-20 tokens:
PRE tokens are hosted on the Ethereum platform as standard ERC20 blockchain tokens.This means that PRE are transferable to any Ethereum compatible wallet that recognizes ERC20 tokens. Token holders are able to sell their PRE directly to any business or individual interested in generating Presearch results at whatever price the seller is able to obtain for their token inventory.
The standardization noted above makes Ethereum highly versatile. It allows Ethereum to be several things, among them...
- ... a blockchain, and ETH is cryptocurrency which powers it;
- ... a tool for executing smart contracts, thus eliminating unnecessary intermediaries;
- ... a platform used for the development of dApps;
- ... a backbone for a decentralized internet.
The internet most of us think about is actually one root of a greater digital tree. This branch is controlled by Internet Corporation for Assigned Names and Numbers (ICANN), and it uses the familiar Domain Name System (DNS) which lets us use text addresses instead of IP Addresses. This is the centralized web of Web 2.0. Web 3.0 is billed as the decentralized web, and it can take advantage of alternate roots. This is what Unstoppable Domains does with the domains it offers.
As the leading altcoin in the cryptocurrency world-- and perhaps the consensus alternative to Bitcoin-- Ethereum offers much value to people using it. Not only does the Ethereum platform make its ETH cryprocurrency attractive, the platform itself offers a full-blown environment for developing dApps and even systems.
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