“Ethereum” by Jack Mathew reads like a magazine for Information Technology (I.T.) coding or programming. That is to say that it is a tough read for us regular folks. However, I am glad I powered through it, and it was only 46 challenging pages.
Ethereum is currently the second leading cryptocurrency, only trailing Bitcoin. I wondered about the main difference between the two, and I got the answer in this book. I will go into the difference in a separate article, but I will say Ethereum has more use cases than Bitcoin.
Ethereum is an application layer over a blockchain. Again, I will go over Blockchain more in my Cryptocurrency series. Users can create smart contracts via the Ethereum layer. Creating applications such as smart contracts uses Ether (ETH). When you pay your gas expense in ETH, it goes to fund the miners for their work.
I will attempt to break it down in a way that we all can understand. Think of Bitcoin as a block of Gold, a store of wealth. Think of Ethereum as a social network, let’s say Facebook. On Ethereum (Facebook), users can create posts and interact with each other. That will be extremely valuable in the future. However, gold will still be valuable in the future as well. I hope that helps a little. Now let’s get into my takeaways.
1) Smart contracts are self-governing. When a user creates a smart contract and releases it to the Ethereum network, they are no longer in control of its code. It now has a formal mission set, and no one can change it. It would be very difficult, or impossible, for users to manipulate smart contracts n their favor.
2) Ether is mined and consumed. Bitcoin is mined but not consumed. Ether is mined and used as a currency to build/create applications on the Ethereum network. There is a limited amount of Ethereum allowed to be mined every year, roughly 18 million.
3) We are just starting to discover Ehtereum use cases. We are still early on in Ethereum, blockchain, and applications. Imagine being able to create your own entity that can settle lawsuits, payments, and such. For example, a smart contract for child support payments. That is where the world is heading.
4) Ethereum is currently set in a proof of work architecture. Proof of work means that the computer network uses its massive computing power to verify everything on the blockchain. It requires large amounts of energy. Ethereum is moving to a proof of stake architecture that will need much less computing power and energy.
5) Everyone can see everything on the blockchain and Ethereum network. There is no place to hide smart contracts or transactions, leading to ultimate transparency and a new age of digital agreements.
I am incredibly bullish on Ethereum. We have just begun to see the extent to which to use these applications. We may get to the point where our grandkids are programming these smart contracts in school. I am jumping into the Ethereum and cryptocurrency world. I am old, but I have to look to the future and set my children up as best I can.
“Ethereum” is a tough read but also a must-read. If you are looking to get into the cryptocurrency space, you must understand in what you invest. Look to the long-term to decide what investments to hold. Good Luck!
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Disclosure: I am not a financial advisor or money manager, and any knowledge is given as guidance and not direct actionable investment advice. I am an Amazon Affiliate. Please research any investment vehicles that are being considered. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it. I have no business relationship with any company whose stock is mentioned in this article.
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