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Monday, October 18, 2021

Is Ethereum More Ethical Than Bitcoin?

What is Ethereum?

Ethereum is the second cryptocurrency by market capitalization, after Bitcoin, but mainly Ethereum is an extremely innovative computer technology the main objective is to make improvements to some daily processes in which there is the exchange of money or services, making them crystal clear, reliable, and above all unassailable; in this way, it opens the door to a better quality of life for people on a large scale. Ethereum is the world’s first decentralized virtual computer.

It is technically composed of several computers that we can define as users who participate in the Ethereum network, but at the same time, it is autonomous from the latter. If a computer on the Ethereum network is turned off, Ethereum continues to work, thanks to the other computers connected.

What are Bitcoins?

Bitcoin is a virtual currency, that is, it is not printed like normal paper money, but which is created, distributed, and exchanged in a completely virtual way, through computers, and with peer-to-peer technology.

It, therefore, follows that:

  • Ethereum is safe.
  • Ethereum is reliable as each operation must be validated by its users.
  • Ethereum is transparent, all transactions are visible, and public
  • Ethereum is wherever there is an internet network.
  • What is Ethereum 2.0 and what benefits it will bring?

At the beginning of December 2020, Ethereum was the subject of a major new update, following which it was renamed “Ethereum 2.0” again. What distinguishes this new version of Ethereum from the original one is its consensus algorithm, i.e. the mechanism that determines the methods of reaching consensus on a specific blockchain, identifying the subjects who validate the data blocks and those who instead verify their legitimacy).

Unlike Ethereum 1.0 and Bitcoin, which make use of a so-called algorithm. “Proof of work” (PoW), Ethereum 2.0 uses a so-called algorithm. “Proof of Stake” (PoS):

In PoW, miners generate “proofs of work” by repeatedly inserting transaction data and random block sequences within a (hash) formula. Proofs of work become the blocks that make up the blockchain and are rewarded through the provision of cryptocurrency. The string used can then be used by other miners to verify proof of work. However, the execution of the insertion calculations and verification of the work tests is an extremely expensive process, as it requires large levels of electricity to be carried out. 

In PoS, miners use cryptocurrency to be able to participate in a draw that will determine who validates a block, a transaction. The cryptocurrency used to participate in the draw is blocked as a security deposit, in order to ensure that the miner validates the block according to the rules of the platform. If the process, called “forging“, is successful, a reward in cryptocurrencies will be given. Otherwise, the deposit will be destroyed. This mechanism has a cost, in terms of energy and hardware, much lower than the PoW, as it requires fewer requirements to be carried out.

How to Buy or Sell Ethereum (ETH)

Buying or selling Ethereum is very easy and can be done through the exchange platforms listed below. These will allow you to buy Ether and keep it on the same platform, or on your own wallet. For small purchases, it’s more convenient to keep them on the same platform, ready to trade. Particularly recommended to operate with cryptocurrencies in a simple and safe way is the best way to buy ethereum platform. For large purchases, i.e. for large investments, it is advisable to use your own secure wallet.

The Principles on which the new Algorithm is based are:

Scalability: the main problem of every blockchain is to be able to withstand the thousands of transactions per second necessary to make applications fast and less expensive to use. The operating mechanism chosen by Ethereum 2.0 should allow increasing the number of operations per second sustainable by the system, through the implementation of parallel secondary blockchains (64) on which the workload is divided, which will increase its capacity and speed.

Security: the adoption of a PoS algorithm usually reduces the security of the network as it provides a small number of transaction validators, making the system more centralized. Ethereum 2.0, however, will provide for a minimum number of 16,384 validators, thus maintaining an adequate level of network security.

Sustainability: the reduction of the energy impact necessary for the validation of blocks, no longer based on solving puzzles, will help increase the environmental sustainability of cryptocurrencies, ideally putting an end to energy-intensive mining.

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Josie Patra
Josie Patra is a veteran writer with 21 years of experience. She comes with multiple degrees in literature, computer applications, multimedia design, and management. She delves into a plethora of niches and offers expert guidance on finances, stock market, budgeting, marketing strategies, and such other domains. Josie has also authored books on management, productivity, and digital marketing strategies.

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