What is Ethereum?
This question has been asked a lot lately, as what many perceive as the cryptocurrency second only to Bitcoin has been gaining in popularity. Ethereum is a decentralized platform that allows developers to create applications on the blockchain. It is similar to Bitcoin but offers a few key differences that make it more appealing to businesses and developers. In this blog post, we will explore the features of Ethereum and how it works. We will also discuss the benefits of Ethereum over other cryptocurrencies, and look at some of the potential uses. Finally, we will provide tips on how to buy Ethereum safely and securely, and share our thoughts on the future of this cryptocurrency.
Beginnings of Ethereum
Ethereum was created in 2013 by Vitalik Buterin, an ambitious young programmer who would go on to found Ethereum with help from several other founders such as Gavin Wood and Charles Hoskinson. This revolutionary virtual currency went live in 2015 and from that point on allowed anyone to deploy permanent decentralized applications where users can interact amongst themselves. This was without any need for intermediaries like brokerages or exchanges because these services are provided “on demand” (when needed). This takes place via smart contracts which enforce agreements between two parties regardless of if they're present at the time of the transaction or not.
What is it useful for?
Ethereum has been designed from the ground up to be more than just a digital currency. It is a decentralized platform that runs smart contracts: applications that run exactly as programmed without any possibility of fraud or third-party interference. These apps run on a custom-built blockchain, an enormously powerful shared global infrastructure that can move value around and represent ownership of property. This enables developers to create markets, store registries of debts or promises, move funds in accordance with instructions given long in the past (like a will or a futures contract), and many other things that have not been invented yet, all without a middleman or counterparty risk.
Decentralization
The Ethereum blockchain is known for being one of the most decentralized due to its high number of validators. Its governance token is Ether, which is used to pay fees for transactions. The transaction fees are used to compensate the nodes that process and validate the transactions, as well as for paying rewards to validators who secure the network.
Smart Contracts
A smart contract is a piece of code that runs on Ethereum and can be used to create agreements between two parties. These contracts are stored on the Ethereum blockchain, and they can be used to automate a wide range of tasks. For example, a smart contract could be used to automatically send payments to someone when certain conditions are met, or to create a voting system where users can vote on proposals using their ETH tokens, or dApp governance tokens.
Ethereum is run by the Ethereum Virtual Machine (EVM) which makes it possible to run smart contracts on the Ethereum blockchain. The EVM is a decentralized platform that runs on nodes all over the world, and it is powered by ETH tokens. The EVM is what allows Ethereum to run dApps, and it is also what makes Ethereum so popular among developers.
For more information about Ethereum, you can visit Ethereum.org, where they have guides for beginners, explanations on how to set up a wallet and more.
Ethereum vs Bitcoin
If you want to compare Ethereum with Bitcoin, there are some similarities. They are both decentralized and they both use blockchain technology. However, there are some key differences between the two.
Bitcoin is primarily a digital currency, and it is used as a way to store or transfer value. Ethereum, on the other hand, is a platform that runs smart contracts. This means that Ethereum can be used for a wide range of applications, and it is not just limited to digital currency.
Another key difference between Ethereum and Bitcoin is the fact that Ethereum has a much higher transaction speed than Bitcoin. This is due to the fact that Ethereum uses a different consensus mechanism than Bitcoin.
Ethereum also has a different monetary policy than Bitcoin. The total supply of ETH tokens is not capped, and new ETH tokens are created every time a block is mined.
Lastly, Ethereum is more popular among developers than Bitcoin. This is because Ethereum enables them to create decentralized applications using smart contracts.
While Bitcoin nowadays uses Proof of Work (PoW) as a consensus system for transactions, Ethereum is now using a Proof of Stake (PoS) consensus system. The curious fact is that Ethereum used to have PoW, but this changed since The Merge happened on September 2022, moving everything to a PoS system.
Where to buy Ethereum?
Ethereum can be acquired through exchanges (centralized and decentralized). If you are holding FIAT, then the first step would be to get someone that takes FIAT and gives you crypto. These usually are centralized exchanges such as Binance, Coinbase, FTX and KuCoin. If you don't have an exchange account then check our exchange guide for beginners.
