What is Ethereum? A Beginner's Guide to Blockchain and Crypto

[00:00:04]hi we are back with another video on the topic what is ethereum before we deep dive please make sure you subscribe to sailor's youtube channel and don't forget to turn on the bell notification icon if you have any doubts feel free to drop a comment below what is ethereum today we decode ethereum the trending cryptocurrency what is it and how can you use it in this video we aim to discuss and simplify what is cryptocurrency and how is it used in the crypto market second what are the advantages of cryptocurrency third what are the disadvantages of cryptocurrency fourth what is ethereum and what are the significant functions fifth what are the use cases of ethereum sixth why is ethereum popular among the various types of cryptocurrency in the market seventh what is the future and scope of ethereum so we are here to analyze ethereum and other cryptocurrencies that are present in the market so what is cryptocurrency in simple language for a common person cryptocurrency is a non-physical digital currency but there is more to digital currency than it is virtual the virtual currency is secured by the process of cryptography and is impossible to be double spent or counterfeited it means that cryptocurrency is digital and does not run the risk of being spent twice the defining factor of cryptocurrency that makes it different from any other currency is that the central authority does not issue it it also means that the cryptocurrency is immune to manipulation or interference by the government the basic definition of cryptocurrency is a digital asset distributed across many computers on a network at the same time the virtual currency exists outside of the control of the central authorities and the government the term cryptocurrency is coined because of the encryption process used to secure the digital network cryptocurrency uses the blockchain's organizational method to ensure transactional integrity and essential component of many digital currencies blockchain is a system that records the transactions made in the digital currencies such as bitcoin or ethereum many experts argue that blockchain can disrupt many industries such as the finance and the law industry trading in cryptocurrency is legal but digital currency faces a lot of criticism because of its use in illegal activities the vulnerability of the network structure of blockchains and the volatility of the exchange rate the advantages of cryptocurrency are its resistance to inflation divisibility transparency and portability what are the advantages of cryptocurrency digital currency is a way to make secure payments and hold the promise of making transferring funds easier between the two parties without a third party involved like a bank or a credit card company instead the transfers in the blockchain are secured by the private keys and public keys and other forms of incentive programs such as the proof of stake or proof of work the owner knows the account's private key and can use it to sign the transfers while the public key is associated with the cryptocurrency systems the key benefits of cryptocurrency are first a minimal amount that is a minimum processing fee is charged on transactions second no intervention from government authorities on the digital currency third easier secure legal and faster way of transactions without the involvement of any third parties fourth cryptocurrency is inflation resistant fifth secure transfers by public and private keys what are the disadvantages of cryptocurrency while there are many advantages of using cryptocurrency there are also some disadvantages too such as its use in illegal activities such as tax evasion and money laundering cryptocurrency educates a lot of privacy and higher value of anonymity with cryptocurrency and protection benefits for activists or whistleblowers living under repressive governments although cryptocurrency is private some cryptocurrencies are more private than other cryptocurrencies cryptocurrencies such as monero z cash or dash are much harder to trace than cryptocurrencies such as bitcoin bitcoin is a poor choice to conduct illegal business do we know that the forensic analysis of the blockchain of bitcoin has helped in arresting criminals some of the major disadvantages that come with cryptocurrencies are first the risk associated with investing cryptocurrency because nobody regulates the cryptocurrencies second lack of inherent value third price volatility fourth cryptocurrencies are prone to cybersecurity breaches and can be exploited by hackers fifth it is challenging to scale cryptocurrencies on a significant level now what is ethereum and what are the significant functions ethereum is a platform used for cryptocurrency it is a blockchain platform that owns its cryptocurrency the cryptocurrency owned by ethereum is ether or ethereum eth ethereum is one of the most famous cryptocurrencies after bitcoin the blockchain platform ethereum also has its programming language ethereum functions with the programming language called solidity the platform is a decentralized public ledger that records and verifies transactions the platform users can make publish use and monetize applications using ethereum as currency for funds transfers the decentralized applications on the platform are called the apps by insiders as a digital currency ethereum is second to bitcoin in market value ethereum is open source which means that it is a free blockchain platform that anyone can use to share and create financial services business and entertainment applications while the apps are not free to use users fees for using the apps are called gas the digital currency platform was created to help the developers to publish and build smart contracts and distributed applications that could be used without the risk of fraud downtime and interference of any third party ethereum the blockchain platform describes itself as the world's programmable blockchain the distinction between bitcoin and ethereum is that ethereum is a programmable network that serves as a place for games apps and financial services that can be paid with cryptography ether or ethereum ethereum is also safe from theft fraud and censorship from authorities or third parties when in how was ethereum created ether was first launched in 2015 in july by a group of blockchain enthusiasts the founder of consensus and an enthusiast blockchain applications developer joe lubin created ethereum vitalik buterin is the co-founder created to have originated the concept of ethereum and now is the ceo and the public face of the second most valued cryptocurrency in the marketplace vitalik buterin is the youngest cryptocurrency billionaire globally born in 1994 which means he's still in his 20s cryptocurrency ether was specially designed for the blockchain based platform network ethereum ether is being used as a form of payment just like bitcoin and many merchants and service vendors have started to accept it as payment who are the main competitors of ethereum the main cryptocurrency competitors of ethereum for companies investing in blockchain systems are ripple iota bitcoins ibm blockstream microsoft jpmorgan and nemo is ethereum better than bitcoin and other cryptocurrency the ethereum blockchain is a platform built to provide an in-house cryptocurrency for applications and the bitcoin blockchain was created to support cryptocurrency ethereum was created with a much wider ambition ethereum aims to be a platform that can store information for all kinds of applications safely the creators of both digital currencies have become huge rivals today despite the differences between the currencies what are the use cases of ethereum the digital cryptocurrency platform was a significant hit and had millions of users and has generated billions of dollars thousands of decentralized applications have been built on ethereum some of the significant use cases of the platform ever since this rise are first decentralized autonomous organizations daos the decentralized autonomous organizations is the earliest use case of ethereum created by the developers of ethereum the decentralized autonomous organizations are blockchain organizations controlled by the coded rules in administrative and software decisions chosen by voting by stakeholders it is one of the earliest and the newest innovations on ethereum that is relevant even today the decentralized autonomous organizations are open source that anyone can use for free that is community governed second ethereum token launches the token sales on ethereum such as initial coin offerings function similarly to the traditional initial public offering the startup fundraising through ethereum played a very significant role in the expansion of crypto and blockchain the years 2018 and 2017 the boom of ico was the period when the token launches exploded the ethereum token launches forever changed how the new innovative startups launch and raise funds third enterprise ethereum enterprise ethereum refers to the networks and customized software based on ethereum and created for private businesses and corporations the enterprise clients have no control over the validators users and architecture which means some other organizations control these networks including microsoft mastercard samsung group jpmorgan there are more than 200 organization members in the enterprise ethereum alliance that is eea all of them are experimenting with private ethiopia versions for enterprise purposes jp morgan and 300 plus banks use enterprise ethereum to run a payment network between banks fourth non-fungible tokens on ethereum non-fungible tokens nfts are very indivisible unique and probably scarce digital assets useful in art and ensure the origin of luxury goods and gaming the popularity of nfts started in late 2017 when it launched crypto kitties digital cat collectibles since then technology applications have grown at a very rapid pace nfts have been attracting a huge amount of audience to digital currency and blockchain technology fifth stable coins stable coins are digital currencies that are tokens that are assigned to a different asset this can be understood as a fiat currency for example the stable coins are backed by the fiat currencies such as the u.s dollar and gold like commodities while some stable coins get the value algorithmically a basket of digital currencies backs some coins digital currency is used to show value as a reliable way in the virtual currency market as a stable coins they are used as resistance towards price volatility for the users and globally for the users whose local currencies devalued due to any situation that can be either political or economic some cryptocurrency exchanges also have the version of stable points sixth decentralized finance decentralized finance that is the day5 is the most recent or the newest creation or we can say innovation to observe an avalanche of growth and use on ethereum these centralized finance platforms recruit original financial products and services decentralized and add programmable resistant to censorship features to create a brand new financial product compound maker dao and away are included in popular decentralized finance platforms in 2020 when the pandemic started catching up the total value overall in decentralized finance platforms combined 4 billion dollars why is ethereum popular among the various types of cryptocurrencies in the market in the digital market ethereum is the second position after the cryptocurrency this is why it is popular in the market ether and bitcoins are the same in many ways they both are digital currency and traded online and can be stored in various types of cryptocurrency wallets both are decentralized which means that they are not regulated or issued by the central bank or any other authority both of them use a blockchain that is the distributed ledger technology there are also many important differences between these two most famous or popular cryptocurrencies by market cap the blockchain technology used by ethereum is not only for the maintenance of a decentralized payment network but also for the storing of the computer codes which can be used to power up the tamper-proof decentralized financial applications and contacts what is the future and scope of ethereum although the second most popular in the digital market ethereum blockchain has some issues regarding stability the number of transactions a blockchain can process in a second ethereum processes only 15 transactions per second in the beginning it was not a problem as so many people were using it but now it is more popular resulting in the biggest issue that require blockchain is facing the new blockchain which can process smart contracts processes up to 10 000 transactions per second to understand how limited ethereum is until and unless the developers of ethereum resolve this scalability issue the organization might concede using other blockchains to host the d apps as smart contracts instead of the ethereum if this all happens in the future of ethereum then its price is likely to be cash hope you guys enjoyed the video please don't forget to like and share this video for any queries comment below and we will get right back to you thank you [Music]