Ethereum is a cryptocurrency that runs on smart contracts. After Bitcoin, Ethereum is the second popular digital currency in the mining industry. Whenever people heard about Ethereum, people relate it with Bitcoin. To clear the smokescreen, here are some of the terms that will beginners to understand Ethereum mining in a better way. Read on!
Bitcoin is a digital or you can say internet money that has been used to make secure money transactions in between two users. Bitcoin is used as storage value and helps people to understand the decentralized digital currency’s concept.
However, Ethereum is bit different as compared to Bitcoin and allows smart contracts to make transfers securely. You can imagine automatic transfer of money in between two persons, but in certain conditions. For instance, a person purchased a home. If we go traditionally, third parties will be involved in this process. Third parties like escrow agents and lawyers will be involved and they will make the process expensive and unnecessarily slow. If you make the payment through Ethereum, then home ownership will be automatically transfer to buyer and after agreeing on the deal, funds will be transferred to seller without any intervention of third party.
You can think of apps that are built on decentralized network. Today, most centralized systems can be easily built on Ethereum following a decentralized manner. As using Ethereum can make the transactions trustless that opens numerous decentralized applications. When talking in terms of decentralization, it is quite important as it totally eliminate control or failure. In addition, it also makes external attacks and internal collusion impractical.
At present, there are plenty of social websites on which a person can make his/her account. For instance, Twitter, Facebook, and LinkedIn. At the end, you put all your information on these websites and you automatically give access to all your personal information to a centralized entity. In case of Ethereum, you can hide your personal information by using decentralized identity management systems as they provide you complete control of your personal data. In Ethereum, there is no centralized server which can access your data, edit it, hack it, or shut down your information.
Presently, there are credit bureaus, namely TransUnion, Experian, and more in the US that are relying on the credit. These bureaus also put some groups at disadvantage. In such a scenario, uPort – Ethereum application go a step further and allows user to control his/her reputation, identity, and data.
Computing storage and power is what you a person think of on his/her computer. When it is not used, then provide it to somebody. The concept is similar to renting out your space. The best part of using Ethereum – a decentralized application is no centralized server is involved. There are projects in pipeline that allows renting of spare computing storage and power. Now, this concept is applied to various industries that are focusing on lowering costs.
There are plenty of social media platforms that do not involve centralized servers. Therefore, no authority has control on the content and social platform has no resistant. The benefit of making decentralized application on Ethereum is high quality content.
When starting a company, the most time consuming and expensive aspect is managing shares. With the growth and raised funds, companies ultimately needs to have shares around. There are numerous companies that possess easy-to-use interface in order to manage the raising capital and cap table of company.
Decentralized apps are used for a transparency in multiple industries. No centralized party is involved, so no access to the funds will be provided to anyone as all terms are secured by code. As per the discussed terms, every person will be paid without any intervention of third party.
Last and the biggest use of Ethereum is for decentralized fundraising. These funds are raised from a large network of investors. From the time Ethereum is launched since July 2015, you can observe the amount of funds that has been raised for decentralized apps.
The Bottom Line
The above-mentioned terms related to Ethereum Mining are sufficient enough to make beginners understand about this process. Therefore, it is advisable to invest in this second most famous cryptocurrency in order to earn profits.