After Bitcoin, Ethereum (ETH) is the second most popular cryptocurrency. Founded in 2015 by Vitalik Buterin and Gavin Wood, Ethereum's market value now counts for more than 17% of the 1.2 trillion USD global crypto market. There are some key distinctions between Ethereum and the original cryptocurrency. In contrast to Bitcoin (BTC), Ethereum is designed to be much more than a digital cash and a store of value. Ethereum, on the other hand, is a decentralized computer network based on blockchain technology. The cryptocurrency is so popular that other crypto currencies use its network.

Ether, Ethereum's native token, may be used to purchase and sell goods and services in the same way that Bitcoin can, but you also need it to pay for the usage of Ethereum network. What makes Ethereum special is that users may create apps that "run" on the blockchain in the same way that software "runs" on a computer.

Ethereum advantages and disadvantages

As with other things, also with Ethereum there are positive and negative sides.

Advantages are:

• Existing network is extensive. The advantages of Ethereum include a tried-and-true network that has been tested via years of operation and billions of dollars changing hands. It boasts the largest ecosystem in blockchain and cryptocurrency, as well as a vast and devoted worldwide community.

• A diverse set of functions. Ethereum, in addition to being used as a digital currency, may also be used to handle other financial transactions and execute smart contracts.

Disadvantages are:

• Increasing transaction costs. Ethereum’s rising popularity has led to increased transaction prices. Ethereum transaction costs, often known as gas, can vary greatly and be highly expensive. That's wonderful if you're mining for money, but it's not so great if you're trying to utilize the network. Unlike Bitcoin, where the network rewards transaction verifiers, Ethereum forces transaction participants to pay the cost.

• Crypto inflation is a possibility. While Ethereum has an annual limit of 18 million Ether, there is no lifetime restriction on the number of currencies that may be created. As a result, Ethereum may behave more like a currency and may not appreciate as much as Bitcoin, which has a tight lifespan restriction on the quantity of units. So, the appreciation of ETH depends on the growth and usage of apps built on it.

Ethereum 2.0

Ethereum 2.0, which is set to be released shortly, claims to improve the scalability of Ethereum's Mainnet. The long-awaited Ethereum blockchain upgrade might come this summer and will be either on 15th or 16th of September 2022. The most major change with Ethereum 2.0 is that the cryptocurrency will transition from a proof-of-work to a proof-of-stake consensus mechanism. This will eliminate the need for miners, who use expensive crypto mining equipment and waste a lot of energy to validate transactions. The carbon footprint of Ethereum 2.0 is predicted to be reduced by up to 99.95%.