My Favorite Coins: Ethereum, the Best of the Rest

Challenge entry: Ethereum, the best of the rest...

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I'm glad the steem crypto challenge has returned. I've been seriously anticipating it's return. Bitcoin is booming, yes and it's a fantastic time to talk about crypto coins cos after bitcoin, we can't tell who's next. Hopefully, as we expound on crypto coins this period someone might find interest in one that could turn out to be the next booming coin. This post is about one of my favorite crypto coins. I consider it to be second to only bitcoin.

Learn why below.

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Crypto coins overview

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When it comes to crypto coins, there are only two types - Bitcoin and... 'the rest'. This is a universally established fact. Formally, crypto coins are typed as Bitcoin and Altcoins. Any other crypto coin (the rest) aside bitcoin is referred to as an altcoin. The reason for this is not far fetched. Bitcoin was the first, and is still by thousands of $$$ the most successful, crypto coin. It's imperative to say other crypto coins were built upon the success of Bitcoin. One of such coins and perhaps, the best among them is...ETHEREUM.

Any dissensions on that claim? Chillax, just let me make my case.

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The aftermath of Bitcoin

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After its introduction, Bitcoin cued in a new form of digital money void of control by a central authority. It was able to do this as a result of one of it's underlying innovations - the blockchain (a distributed public ledger technology). Bitcoin recorded huge success as more and more people began to use it. The idea of a peer to peer decentralized payment system appealed so much to many of the inhabitants of the only terrestrial planet occupied by humans. In a matter of years, what could only buy 2 pizzas became equivalent to $10M in late 2013.

It was this success that began to inspire the idea of utilizing bitcoin's underlying innovation - the blockchain, for other uses apart from decentralized payment processing. Also, some people began to seek to create a better bitcoin and this gave rise to so many other cryptocoins. Below are some of the coins that came up upon bitcoin's success

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While you might be seeing this picture above another time if you stay tuned to my entries in the 'Bitcoin is booming' steem crypto challenge, for now, our main focus is on the 4^th guy from right to left (R-L)

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So what about Ethereum?

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Of course nothing much, if I want to be silly, but skip that.

In 2013, a certain Vitalik Buterin - a programmer and co-founder of bitcoin magazine, argued that Bitcoin needed a scripting language so that applications could be developed on bitcoin. He didn't quite get the support he needed to implement his idea on bitcoin, so he came up with a proposition and that proposition was Ethereum.

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Talking about how Ethereum came to be is not as relevant to this post as what Ethereum actually is.

According to ethereum.org, Ethereum is a technology that lets you send cryptocurrency to anyone for a small fee. It also powers applications that everyone can use and no one can take down. source

Now wait a minute...

The names Ethereum and Bitcoin signify the technology although bitcoin is sometimes used to mean the coin.

Aright. Back to what this Ethereum is.

While Bitcoin provides a decentralized payment system, Ethereum did that and even more. Ethereum was programmable! You can use Ethereum for decentralized financial services, games, apps and even other digital assets including bitcoin.

Ethereum's native cryptocurrency token is Ether and is symbolised as ETH. This token is however mistakenly called Ethereum by many (including me in the early parts of this post). Not that it matters though.

Currently, it is difficult, if at all possible, to pick any open ended decentralized software platform that is more established and larger than Ethereum. Ethereum has it own programming language which runs on a blockchain. It also makes possible the use of smart contracts which has been an undeniable decentralized financial innovation. The story of smart contracts is one for another day but just remember that it's a combination of codes and data in a particular address on the Ethereum blockchain. no one can control it but anyone can interact with it and use its functions.

^{Smart contracts}

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Ethereum's native token, Ether (ETH), has two major uses. It is traded just as any other cryptocurrency on exchanges and it is used to run applications on the Ethereum network. Now isn't that valuable?

You'll so much appreciate the value of Ether is you use the Ethereum network often. Talking about use, here's a quick rundown of some Ethereum use cases that you might have come across

1. Decentralized Finance (DeFi): Ethereum is used for DeFi applications which includes loans running on smart contracts, decentralized exchanges and minting of stable coins. A good instance to exemplify all these is MakerDAO, which uses Ethereum smart contracts to create a stablecoin (DAI) that always has a value of $1 and is backed by Ether.

2. Tokenization: Ethereum is an environment, not just a cryptocurrency. It's programmable, with Solidity as it's main programming language. DApps can be created on the Ethereum network with the help of smart contracts. Each of these apps usually have their tokens which is backed by Ether. If you've ever heard of Tron, it began on Ethereum and it's native token - TRX was then an Ethereum token because it was built with one of Ethereum token standards called ERC20. These tokens are backed by ether.

3. Initial Coin Offerings: No this is not the offering you give in church. This is a way start-ups generate funds for their new project. They create tokens for the apps they're building and sell them in exchange for Ether. People who are interested in the project volunteer to buy them (let's assume the price is not exorbitant). It's called an offering because it's bought voluntarily since the token bought has no value, given that it's at its initial stage.

The average Joe in crypto must have come across one or more of these three use cases and that is why I picked them to explain the importance of the Ethereum network and hence, the value of Ether, which powers the Ethereum network.

More can be said about Ethereum on a later date in another post but for now, let's make do with understanding how it was concieved, what it is, some of it's application and it's important native token (Ether).

ETH is one of my favorite coins because of it's importance in the Ethereum network and also it's value in the market.

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Have I held Ether and for how long

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I've held Ether for a short period and I'm planning to hold it for a longer period as a result of its importance in the Ethereum network.

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Conclusion

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Ethereum is different from most other crypto coins and is the first of it's kind. It's the first programmable blockchain as well as the next most valuable cryptocurrency after bitcoin with a market cap of ~$16bn. As far as altcoins go, Ethereum remains one of my favorite and I think it's actually the best among the rest.

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References

1. Ethereum.org
2. Coindiligent.com