What Is Ethereum – Features, Advantages, and Disadvantages

Ethereum comes in version 2.0 of blockchain and patches all issues faced by blockchain version 1.0, in short, you can say that it is the advanced version of blockchain that comes after 1.0 with advancement and upgradation. In blockchain 1.0 there are many issues to mine bitcoin as it requires more power consumption, costly assets, and scalability issues. So that’s why bitcoin was replaced by Ethereum. Let’s discuss Ethereum.

What Is Ethereum

Ethereum is a decentralized blockchain platform and it established a peer-to-peer network to perform secure transactions, it verifies each transaction using a smart contract which is a piece of code that runs on the Ethereum blockchain and executes if and only the particular defined conditions meet otherwise it will not verify the transaction.

Furthermore, it provides code and source files to implement the Decentralized Application (DApp), here are some real-world Ethereum-based applications: Voting, Agreements, Shipping, Crowdfunding, Ethereum Domain Name - (ENS), and Banking System.

Ethereum blockchain uses Proof of Stake (POS) consensus to verify the transactions instead of using Proof of Work (POW), in POS you need huge value to stake to verify the transaction and generate a new block. And in POW to perform the same task you need to solve mathematical puzzles which take a lot of time, energy, and computational power.

Features of Ethereum

Some key features of Ethereum are:

  • Decentralized Applications (DApp): It is just like centralized applications having the same user interface and database connectivity. But there is a big difference between centralized applications and decentralized applications. Centralized applications are owned by a single central authority and your data is owned by someone else but in the decentralized application your data would be owned by you and you have full access to it.
  • Proof of Stake (POS): It works on POS consensus to verify the transactions, which makes it more efficient than POW.
  • Ether (ETH): This is its native cryptocurrency and is used as fuel to run the Ethereum network.
  • Smart Contracts: Ethereum allows the deployment of smart contracts to meet certain conditions. It is the set of code that runs on the Ethereum blockchain. Smart contracts are developed by using a programming language called solidity.
  • Ethereum Virtual Machine (EVM): It is a virtual environment that helps to operate and control the running network of Ethereum.

Advantages of Ethereum

  • It ensures Availability, due to the decentralized and peer-to-peer network it would not be down even for a second.
  • It achieves Privacy, it doesn’t reveal your privacy.
  • Protect against 51% attack.
  • Rapid deployment as you can utilize the predefined source files provided by the Ethereum blockchain to develop your enterprise system, with the help of this, you don’t need to generate a code from scratch.
  • Immutable Transaction, like when you perform the transaction you cannot revert it and you cannot change the stored data on it.
  • Transparency

Disadvantages of Ethereum

  • Volatile Cryptocurrencies: There are rapid ups and downs in their value so that is why investment in Ethereum could be losable sometimes.
  • Complexity: Due to the complexity of code it is a big challenge to understand the solidity of programming smart contracts.


Ethereum is a decentralized and peer-to-peer network used to perform secure and verified transactions. It is a blockchain platform that comes in version 2.0 and provides the solutions to problems that were had in version 1.0. Its native cryptocurrency is Ether (ETH) which is used as a gas to run the network, and It uses Proof of Stake - (POS) consensus to verify the transactions.

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