What does Ethereum do?
Ethereum is widely regarded as the first and largest Blockchain 2.0 platform. While the cryptocurrencies that came before Ethereum allowed users to store and transfer wealth, Ethereum goes beyond these capabilities by allowing its users to create decentralized apps. New tokens can also be created on Ethereum. Tokens are usually defined as cryptocurrencies that exist on separate blockchains while coins are the native currency of their blockchain technology.
In addition to its Blockchain 2.0 functionalities, Ethereum can also be used to store and transfer wealth like other cryptocurrencies, like Bitcoin.
Ethereum is widely regarded as the first Blockchain 2.0 platform project. Prior to Ethereum’s debut, cryptocurrencies served as a means for users to store and transfer wealth. Ethereum goes one step further by offering a Turing complete programming language. This means users can create decentralized applications (DApps). These decentralized applications are executed through smart contracts which are applications that interface with the Ethereum blockchain. Solidity is the programming language used to create smart contracts.
Users can create their own tokens for their applications, fostering an entirely new wave of small economies. These tokens are often obtained through Initial Coin Offerings (ICOs). An ICO is a crowdfunding method for projects to raise Ethereum to fund their business development. Often times, they sell their tokens at a fixed rate in exchange for Ethereum. ICO investors hope that if the project is successful, then the tokens will rise in value.
What is Ether used for?
The native cryptocurrency of the Ethereum network is Ether (ETH). ETH is the second most widely used cryptocurrency for trading both fiat currencies and altcoins, making it an excellent bridge between the real world and the whole crypto space.
One of the primary use cases of ETH is to act as "gas.” Running smart contracts and performing transactions on the blockchain require computing power. Users must pay ETH to cover the cost associated with computing power. The ETH spent as gas is given to miners as a reward for verifying transactions on Ethereum's blockchain.
How can Ether value appreciate?
The forces of supply and demand will surely affect the value. Theoretically, as Ethereum gains wider adoption, the demand for Ether will continue to grow, causing a rise in price. Demand can come from multiples sources. Developers launching projects on Ethereum will need ETH to execute their smart contracts. Additionally, as Proof of Stake gets introduced, people will want to hoard Ethereum simply for staking rewards. Lastly, as more merchants accept Ethereum, users will want it as a payment method, much like Bitcoin.
What is the difference between Ethereum and its competitors?
Ethereum has many competitors, but two of the largest are NEO and EOS. EOS has raised over $1B to fund its efforts. Their mainnet launched in July of 2018 and is very new. They have Brock Pierce and other major names supporting them, which makes them a viable competitor. In terms of practicality, Ethereum takes the win as they have developers launching projects often. NEO, on the other hand, has been around for much longer. Previously branded as Antshares, they are known as the Chinese Ethereum with heavy hitters behind them. They have DApps launching on their platform but are often criticized for not being as decentralized as Ethereum. All of NEO’s current miners are centralized and chosen.