What Can Ethereum Be Used For?

Ethereum is one of the most popular cryptocurrencies on the market, but it is important to realize that it is so much more than just a cryptocurrency.

Ethereum is a decentralized platform, which runs smart contracts. If that sounds a bit bewildering, don’t worry; we will explain everything in this guide.

Below, we will explain what Ethereum is and provide you with advice and information on the Ether currency and whether or not it is a good investment opportunity.

Of course, it is critical to remember that everyone’s investment profile is different. Therefore, it is all about figuring out what makes the most sense for you and what fits in with your investment goals when you make your decision.

With that being said, let’s dig a bit deeper and discover everything you need to know in this beginner’s guide to Ethereum, including what it is used for.

What is Ethereum?

Ethereum is a blockchain platform that has its cryptocurrency, known as Ether (ETH), and its programming language, which is known as Solidity.

As a blockchain network, Ethereum is a decentralized public ledger for registering and verifying transactions. Users on the network can create, monetize, publish, and use applications and use the Ether cryptocurrency as payment. The decentralized applications on the network are known as dApps.

Who is behind Ethereum?

Many entrepreneurs and programmers were instrumental in founding Ethereum, yet the credit mainly goes to Gavin Wood and Vitalik Buterin. Nevertheless, if you wonder who is in control of Ethereum, this is entirely different. As the network is decentralized, it means that no one entity or person controls the platform.

What is an Ethereum smart contract?

In the introduction, we mentioned smart contracts. A smart contract is just a term used to describe a computer code that can facilitate the exchange of shares, property, content, money, or anything of value.

When working on the blockchain, a smart contract becomes like a self-operating computer program that performs automatically when certain conditions are adhered to.

As smart contracts run on the blockchain, they run just as programmed without any possibility of third-party interference, fraud, downtime, or censorship.

While all blockchains can process code, the majority of them are limited severely. Ethereum is different. Rather than giving a set of limited operations, Ethereum offers developers the ability to create any operations they want.

It means that developers can build thousands of different applications that go way beyond anything we have seen before.

The different uses of Ethereum

From the start, Buterin envisioned his networking bringing about a new era of decentralized applications, spanning many different industries. With that being said, let’s take a look at some of the different things that Ethereum is used for:

Identity systems

Not everyone enjoys the idea of media giants like Facebook storing our personal information. So some developers are working on different ways to house that data on the blockchain to keep it safer than it could ever be if it were in the hands of for-profit businesses.

This way, you could select when to reveal information about yourself to another party, such as applying for a job or school. Then, once the application has been processed, you could once again ensure your data is shielded.

Insurance

Decentralized insurance could get rid of weeks and months that you typically need to wait to be paid out as a homeowner who has experienced significant damage from a natural disaster.

For instance, Etherisc offers to pay instantly when winds above a set speed are recorded within a 30-mile radius of your small business or home.

Leading systems

In the United States, three main agencies are responsible for keeping a record of your credit history: TransUnion, Equifax, and Experian. Unfortunately, these bureaux handle a huge amount of data, so much so that mistakes can be pretty common.

To make matters worse, it can be challenging to eliminate any errors in your credit report. As a result, your credit rating will worsen all of a while, and you are either offered loans with unfavorable interest rates or denied loans altogether.

Decentralized lenders do not rely on credit reports that big third parties create. Instead, your cryptocurrency serves as your collateral. As a result, not only will you find it easier to get a loan, but the repayment terms are much more flexible when compared to a conventional loan.

Social networks

Cent is a social network that makes it easy for fans to support their top content creators with cryptocurrency financially.

Entertainment

Augur is a protocol developers can utilize to build a prediction market where players can enrich themselves by correctly predicting events. In addition, augur protects itself from fraud by gathering several reports on the outcome of predicted events instead of relying on one report, just like a centralized prediction market.

Augur puts no limits on the bets that can be placed or on the amount of money you can win. Should you be on a hot streak, Augur will not step in and put any caps on your winnings. Also, Augur does not take a cut of any of the money you make.

Crowdfunding

Last but not least, one of the primary uses of Ethereum is generating startup capital for new companies. In addition, businesses create new digital currencies known as tokens, which they can offer on the Ethereum network.

Speculators are usually willing to take a chance on a new currency by buying the new token at its initial coin offering, known as ICO.

This is how Ethereum generated money in its infancy with its Ether currency. There have been several other tokens that have experienced crowdfunding success. For example, Golem has collected $8.6 million, and the Augur platform has brought in $5.3 million.

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