What is so useful about Ethereum’s (ETH’s) smart contracts?
You’ve probably heard about smart contracts before, but also propably have no idea what you can do with them. Smart contracts are actions or payments that are only executed when certain requirements are met. These can be automatic salary payments (on a fixed date), automatic payment of parking fees (if you are at the parking lot) or a refrigerator that orders eggs when you use your last egg. In a world with increasing digitalisation and in which the Internet Of Things is no longer a dream for the future, smart contracts will play an enormous role. The more you can do automatically, the better.
Although the name Vitalik Buterin was not an unknown name, his name became immortal when Ethereum came up with the decentralized Apps (dApps). Once larger companies were convinced, cooperation partners stood in line. Ethereum is an open source blockchain in which everyone can participate. However, you do have to follow a training course first…
Ethereum’s programming language is Solidity. Since Ethereum has revolutionary and new functions, it is not surprising that a new programming language had to be created for the implementation. The disadvantage: other blockchain applications are using programming languages that developers also use outside the blockchain.
Approved by miners
All transactions on the Ethereum blockchain are verified by the miners, who receive Ether as a reward. Proof of Work mining is seen as the biggest stumbling block for Ethereum (ETH), because it is becoming outdated. At the moment, Ethereum is working on moving to the Proof of Stake (PoS) protocol in the future. How exactly this is going to happen is becoming increasingly clear, but will certainly not be discussed and implemented until the end of 2019 or the beginning of 2020.
Is Ethereum future-proof?
Yes, it is, because Buterin is very well aware of the problems and the possible solutions:
But that is not the only reason to believe in Ethereum. This blockchain has a huge army of community members, partner companies and developers who work daily on this blockchain and are creating new contracts and applications for the future. It may be a 2.0 blockchain, but that does not mean that it is of less value then the 3.0 variants. Ethereum will remain an important player on the digital market. And there will be numerous developments in the future that will make the Ethereum network even better. Especially now since the Ethereum developers are intensively cooperating with the community and are listening to their feedback.
This makes the blockchain by itself interesting, but investing in ETH is also an interesting option for many people, especially with the right risk diversification over various cryptocurrencies.