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Have you heard about the Ethereum Rainbow Chart? It is worth mentioning that the Rainbow Chart is a long-term valuation tool. The above-mentioned tool utilizes a logarithmic growth curve in order to forecast the potential future price direction of one of the most popular cryptocurrencies.

You need to keep in mind that the Rainbow Chart is meant to be a fun way of looking at long-term price movements, overlooking the daily volatility “noise.”

So, how does it work? Let’s find out!

Interestingly, originally featured on Blockchain center, the above-mentioned chart overlays color bands on top of the logarithmic regression curve in a bid to showcase market sentiment at each rainbow color stage as the price of one of the main cryptocurrencies moves through it. Consequently highlighting potential opportunities to purchase or sell.

Let’s learn more about Ethereum. What is it? How does it work etc.

What must you know about Ethereum?

First of all, it is a decentralized global software platform. Interestingly, this platform is powered by blockchain technology. Many people know at least something about Ethereum, more precisely about its native cryptocurrency, ether (ETH).

You can use Ethereum in order to create any secured digital technology. The above-mentioned platform has a token in order to pay for work done supporting the blockchain; nevertheless, people who participate also have the opportunity to use it in order to pay for various goods and services if accepted.

Without exaggeration, Ethereum is the blockchain of choice for many developers as well as enterprises. It plays an important role in the modern world.

For example, Ethereum supports smart contracts, an important tool behind decentralized applications.

As a reminder, many decentralized finance (DeFi), as well as other applications, utilize smart contracts conjointly with blockchain technology.

Now, let’s answer one really important question. How does it work?

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Source: reddit.com

Have you heard about Vitalik Baturin? He emigrated from Russia to Canada with his family when he was a kid. He is credited with conceiving Ethereum. Baturin published a white paper to introduce Ethereum several years ago, more precisely in 2014.

The Ethereum platform was launched one year later, in 2015, by Vitalik Baturin and Joe Lubin. As a reminder, Lubin is the founder of the blockchain software company ConsenSys.

Ether is a very famous cryptocurrency. It is the second-largest cryptocurrency in the world when it comes to market value. The largest cryptocurrency in terms of market value is Bitcoin.

Do you know what a blockchain is?

As we already discussed, Ethereum, as well as its native cryptocurrency. Now, we can move to blockchain.

As a reminder, it is a distributed database or ledger that is shared among the nodes of a computer network. Importantly, as a database, it stores information electronically in digital format.

They are best known for their role in cryptocurrency systems, such as Bitcoin. Blockchains maintain a secure as well as a decentralized record of transactions.

Wallets

Now, let’s get back to Ethereum. It is worth noting that people who own Ethereum use wallets in order to store their ether. But what is an Ethereum wallet?

To cut a long story short, a wallet is a digital interface that lets owners access their ether stored on the blockchain. You might be surprised to learn that your wallet has an address. Do you know what they have in common? It has an address similar to an email address in that it is where owners send ether, much like users would an email.

You might be surprised to learn that ether isn’t actually stored in your wallet. Your Ethereum wallet holds private keys. You can use private keys as you would a password when you start a transaction. As a reminder, owners receive a private key for each ether they own. We need to mention that this private key is vital for accessing your ether. So, it is very important to protect a private key from various criminal groups.

Do you know what is the difference between Ethereum and Bitcoin

Both of them are very popular around the globe. As a reminder, Bitcoin is the largest cryptocurrency in the world, and Ethereum is the second-largest cryptocurrency. Not a bad result.

They have many things in common; however, there are some important distinctions.

For example, according to the founders of Ethereum as well as developers, Ethereum is the “world’s most programmable blockchain.”

The situation is different when it comes to the Bitcoin blockchain. It was created only in order to support the Bitcoin cryptocurrency. Moreover, Bitcoin, the world’s first decentralized cryptocurrency, was designed only to serve as a payment method.

As you might know, the maximum number of Bitcoins that can enter circulation is limited to only 21 million.

However, there is no such limitation when it comes to ether, even though the time to process a block of ether limits how much ether can be minted each year. At the moment, over 122 million Ethereum coins are in circulation.

In conclusion, the purpose of this article was to discuss not only Ethereum Rainbow Chart but also to learn more about Ethereum as well as Bitcoin. As you can see, cryptocurrencies play an important role in the modern world. So, it is important to read as much as possible about various cryptocurrencies. Also, it is a good idea to watch videos about Bitcoin and Ethereum.

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