Ethereum is the first blockchain network that showed the world that a blockchain can be much more than a currency maintenance system. The benefits of Ethereum decentralized platform are countless, and it can re-define the very internet as we know. More so, Ethereum happens to be one of the top blockchain platforms within the blockchain ecosystem. There are already projects and applications build on top of Ethereum, and these are already surpassing legacy networking systems. That’s why in this guide, we will cover the benefits of using this platform for your blockchain solution.
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What is Ethereum?
Ethereum is a blockchain-based decentralized platform where you can also build and launch your decentralized applications. The core difference between Bitcoin and Ethereum is within their applications. Bitcoin used blockchain technology to create a new transaction system that resolves the need for a third-party validator like banks. Remember that Ethereum is a public platform, so it’s not that much suited for enterprise use cases.
If you want to use Ethereum for enterprise industries, you need to use Enterprise Ethereum. In reality, Enterprise Ethereum is the private version of the Ethereum platform that is still connected to the public chain. So, the private chain can take advantage of the public chain and will get regular updates similar to the public version.
Ethereum also has a currency and transaction system of its own but actually is much more than that. It is the first system that introduced Smart Contracts for us. There are certain benefits of using the Ethereum blockchain platform. Let’s check out what these benefits are!
Benefits of Ethereum Decentralized Platform
There are certain benefits of using the Ethereum blockchain. These are –
Automated Smart Contracts
Smart contracts are a form of automated digital contract that enables a user to transact anything having value under certain conditions. It could be money, property, company shares, and gold, basically anything!
But, how? Let’s assume a scenario. John wants to pay Lisa when she finishes writing a book for him. But John wants a great book! He decides he will pay only if Lisa writes up 20 chapters, each containing 3,000 words, and finishes it within 30 days. But John was a fraud who vanished up in the thin air, although Lisa fulfilled all the conditions.
An Ethereum smart contract can save Lisa from such scenarios. Like any other contract, the parties can predetermine the contract rules, and when every party fulfills those rules, only then will the contact automatically execute. So, in the previous example, when Lisa completes writing the book and submits it, it will get verified, and the payment will get released. Both parties will remain anonymous, yet the contract will be in the public ledger for validation.
Ethereum Virtual Machine (EVM)
The EVM is a bit complex idea. EVM is basically a suitable hardware and software co-relation system that enables Smart Contracts. This virtual machine can execute the untrusted codes within the Smart Contract by all the machines (computers) connected to the Ethereum’s network. A Smart Contract validates the transaction when the requirement is fulfilled. The EVM is the Turing complete software that these Smart Contracts use to dissolve issues.
This is one of the main advantages of the Ethereum platform as blockchain developers can use it to develop decentralized applications. As it doesn’t have any downtimes, it extremely great for storing objects that no one can modify.
Development of Decentralized Applications (DApps)
This is another one of the benefits of the Ethereum decentralized platform. Using this blockchain platform, professionals can develop various types of decentralized applications. Recently, decentralized finance applications have become extremely popular among the tech community as many companies can see the benefits of using them.
Most of these DApps are based on the Ethereum blockchain platform. Although there are many platforms for application development, there is still no platform that can beat Ethereum’s public platform for app development. So, you see, the benefits of Ethereum decentralized platform are countless.
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Fully Immutable Platform
One of the most lucrative advantages of the Ethereum blockchain is the fact that it offers a fully immutable platform. Do you know what that means? Well, it means that no one can alter any of the data within the ledger of this platform. Thus, all of the transaction information within the system will remain intact, as once it’s in the ledger, it stays there. Also, no one can even delete any transaction information. Therefore, it preserves data integrity. This is one of the top benefits of any public blockchain platform. Also, as it’s a public ledger, all users within the network can see the transactions, so it preserves transparency as well.
With Ethereum comes a load of blockchain security protocols that can offer a more secured platform compared to traditional systems. Typically, traditional systems are not capable of handling the increasing number of cyber-attacks. Thus, most companies fail to safeguard their valuable information from bad parties.
However, Ethereum can really change the scenario here. In reality, the network uses a type of cryptographic hashing method that secures and encrypts all the data. This also makes it harder for cybercriminals to enter the network as hash functions can’t be reverse-engineered; every time, it will generate a new one making it impossible for them to infiltrate. This is one of the main advantages of the Ethereum platform.
One of the benefits of the Ethereum blockchain is the ability to offer true traceability. As all of the transaction data is stored on the ledger and no one can change it, companies can leverage this and create a traceability system. In reality, this system can help companies track their products or transactions and create a full report on the company’s wellbeing. More so, it can also help in figuring out any inefficiencies within the system and correct them as soon as they are discovered.
In recent times, the rise of non-fungible tokens is taking over the world. This is different from a digital token that can be an art, image, video clip, or any type of unique element. However, the concept of non-fungible tokens came from Ethereum. Ethereum offers ERC standards for creating a new type of token type, and it has helped the blockchain community greatly over the years. However, a token standard ERC-721 was specifically made for creating NFTs, which are unique tokens that can’t be interchanged.
Although only recently did this new concept make headlines and artists from various spaces use this opportunity to sell and own their innovative creations. Another token standard, ERC-1155, can also create NFTs. However, some popular NFTs like CryptoPunks are still using a token standard close to the ERC-20 token.
Here’s a guide to help you understand various NFT use cases, which will help you to utilize this new token type efficiently.
Reduced Transaction Fees
Another one of the benefits of the Ethereum blockchain is the reduced transaction fees. Compared to Bitcoin, Ethereum offers a far more reduced costing for transacting anywhere around the globe. All you will need is access to a decentralized wallet. Although sometimes the Ethereum Gas fees can go up, still it’s much more convenient to send you money over this platform. More so, it usually takes about 15-30 seconds to complete a transaction in the system, so it’s definitely the faster route to take.
With new inventions, new possibilities come to light. Ethereum’s decentralized platform is already creating new horizons. It might just shake up the very nature of the internet. The platform would make the contracts immutable and tampering proof. Moreover, there will be no downtime of the apps as the server would never go down. Only time can tell where this technology would take in the future. If you are more interested in learning about this platform, we recommend starting with our Ethereum development fundamentals course.