How Blockchain with Ethereum Smart Contracts revolutionizing?
Bitcoin and its underlying technology, blockchain, are disruptive technologies with the potential to impact the entire world economy.
Often omitted from the headlines about Bitcoin’s meteoric rise in market cap, and the technological promise of blockchain, is a basic understanding of what these technologies are and where they come from.
This short article examines Bitcoin and Ethereum digital currencies (cryptocurrencies), as well as introduces Blockchain, the technology that facilitates the digital transfer of value, and more.
The Origin of Bitcoin
Bridge smart contract development services The first was our inability to transfer money (currency) digitally between interesting participants without the need for a trusted intermediary. The second was the need for a way to transfer money digitally but to establish the order of transactions, avoiding duplication of expenses.
Nakamoto proposed two solutions:
A P2P currency capable of maintaining its value without a central authority.
The ledger would operate similarly to any other, except that recorded transactions would be distributed to computers around the world.
In 2009, the ability to transfer value digitally was created, taking the name Bitcoin. However, it is the second capability, called blockchain, that is proving to be of much greater significance.
While blockchain is just starting to get mainstream thinking, it is, as mentioned, revolutionizing the world economy.
Bitcoin and Ethereum:
Since its launch, Bitcoin has captured the attention, albeit relatively small, of a growing number of investors, enthusiasts and companies around the world.
As it grew, it served the dual function of acting as a proof of concept for a “PSP digital currency version” and simultaneously gave rise to other digital currencies.
The two most popular currencies by market cap are Bitcoin and Ethereum. The current market cap of Bitcoin is $37 billion USD while that of Ethereum is $16 billion USD.
Any attempt to compare them is not a comparison between similar things. About that, we'll talk later. First, let's analyze what Bitcoin is.
Bitcoin
Bitcoin is a decentralized electronic version of P2P money that maintains its value without backing or intrinsic value. It allows the transfer of money digitally without the need for a trusted intermediary such as a bank or credit card.
The initial value of Bitcoin was established on October 5, 2008 at $0.008, calculated on the basis of $1 equal to 1309.03 Bitcoin (BTC). Today, it trades above $2300.00. This represents an appreciation of 2.9 million X starting value.
According to the Washington Post, if you had bought $100 worth of Bitcoin seven years ago, those coins would be worth more than $73 million dollars today. To put that in perspective, if you had invested $100 in Amazon when it went public in 1997, your investment would have been worth somewhere around $64,000. It is worth noting, however, that digital currencies are significantly more speculative than stocks such as Amazon.
With the rise in the price of Bitcoin, a question naturally arises: where do Bitcoins come from:
Mining
What is the origin of Bitcoins if, by definition, they are not backed by any central authority? Bitcoins are actually “mined” by Bitcoin miners.
The most direct analogy is gold mining. Gold miners work to extract gold from the earth. As it is mined, it enters the economy. Conceptually, Bitcoin works the same way.
How are Bitcoins used:
After mining Bitcoins, how and what are they used for:
Bitcoins are traded on exchanges like stocks, bonds, and currencies, and are also used as an exchange currency for goods and services.
The number of vendors and stores accepting Bitcoin in exchange for goods and services will likely grow from 1,000 to 100,000 now that Japan is accepting Bitcoins as a currency.
Here follows a list of 100 major North American retailers that accept Bitcoin.
Bitcoin, however, is not the only digital currency growing in value and catching the world's attention. Ethereum shares many of the characteristics of Bitcoin, although it has unique characteristics.
Ethereum:
While Bitcoin was the first to hit the market, garnering media attention, many believe that Ethereum, and its Ether currency, is a much more powerful tool.
proposed Ethereum in an article entitled Ethereum White Paper: A Next Generation Smart Contract and Decentralized Application Platform.
The development of the protocol was crowdsourced in 2014, raising over US$150 million. Build a token bridge .The system itself was launched on July 30, 2015.
Ethereum is an open source blockchain platform and its fundamental proposal is this: that blockchains can be used for more than simply transferring currency.
Additional uses may include currencies, financial instruments, property, domain names, as well as more sophisticated cases such as exchanges, derivatives, P2P betting, and identity and reputation systems.
Smart Contracts:
“Smart contracts” is one of Ethereum's most important contributions to the rapidly changing universe of digital currencies and blockchains:
They can be understood as a digital medium that facilitates the exchange of anything of value in a transparent way, removing intermediaries such as lawyers, notaries and others. Smart contracts perform this function by automatically ensuring compliance with the terms of the digital contract.