Cryptocurrencies are divided into several categories. Bitcoin is used for payments, but Ethereum serves as the infrastructure to scale new projects on its blockchain.
In other words, it opens up the possibility for other developers to build without having to create a new blockchain.
Ethereum: a bit of history
Vitalik Buterin created Ethereum in 2013 after realizing that it was a functional limitation of the Bitcoin programming language, lacking the integrity of Turing.
In the same year, he published his first whitepaper describing a distributed computing platform for running smart contracts and creating distributed applications (dApps).
A year later, Buterin and several other early contributors are a nonprofit called the Ethereum Foundation, an organization dedicated to researching this cryptocurrency, developing core protocols, and developing ecosystems.
The Foundation’s first mission was to organize the Public Sale of Ethereum, which raised 31,529 BTC ($ 18 million at the time) in exchange for approximately 60 million Ether and used the proceeds to fund the development of the Ethereum blockchain. early from the net.
Mainnet launched in July 2015 and had its first live version called Frontier.
Soon after, August (REP) held its first Initial Coin Offering (ICO) and startups sold Ethereum-based REP tokens (created through the ERC20 standard) to help fund support for the project. ..
Financing makes it an attractive way to raise money. Most startups are Ethereum-centric as they have generated thousands of new tokens from the August ICO, raising billions of dollars in the process.
What is DAO?
In April 2016, a diversified hedge fund called DAO held an ICO and raised $ 150 million in ETH. In July of the same year, an attacker exploited a bug in one of DAO’s smart contracts, allowing the practitioner to steal 3.6 million ETH.
Most of the Ethereum community has chosen to reverse the chain to remove DAO and subsequent attacks from the network history.
Other interested parties have refused to agree to a rewrite of the ledger, considering as far as possible the preservation of immutability.
The division of the community caused a difficult and controversial fork a few weeks after the hack, resulting in a permanent division of the network. The old chain that does not undo transaction history is now known as Ethereum Classic (ETC).[maxbutton id=»1″]
Differences with Bitcoin
The main difference is the type of category in which they are included. Bitcoin is used for payments, but Ethereum is a platform to create cryptocurrencies with other projects.
Ethereum is an inflation cryptocurrency, so there are no restrictions on it. But that does not mean that it is unlimited. Its token, the ether, is the native gasoline or payment method used by other projects, and when and when it is used is regulated as if it were a traditional fuel.
Another big difference is the consensus algorithm. In this case, using proof of work, the standard token is ERC20.
Its main function is to execute smart contracts.