Everyone heard about Ethereum in the past 2 years. The mainstream media helped push this cryptocurrency to the mainstream, as its price soared to a current price of around USD 3,000. On the other hand, it is not enough to simply hear about something. It is also important to understand what it stands for, how it started, and its basic mechanics. That’s why in this article, we’re going back to the basics, and introduce Ethereum crypto in a very simple and straightforward way.
Buckle up, sit down and enjoy this quick guide on what Ethereum crypto is.
What is Ethereum Blockchain?
Ethereum is a distributed computing platform and a brainchild of Vitalik Buterin. Based on market capitalization Ethereum is the second-largest blockchain and cryptocurrency platform after bitcoin. However, it is much more than ordinary cryptocurrencies and people refer to it as the world computer. Developers can build decentralized blockchain applications using Ethereum’s open-source code. Those decentralized blockchain applications are DAPPS. Instead of centralized servers, DAPPS run on globally distributed blockchain networks, thus they are censorship-resistant. Using smart contracts, they can automate actions based on predefined conditions without relying on third-party intermediaries. This also mitigates the problems of centralized governance.
What is ERC-20?
Another crucial aspect of ethereum is the ERC20 token. Any developer with the required technical knowledge can create these tokens for their DAPPS. Ethereum’s open-source code makes it much simpler than building tokens from scratch.
How does Ethereum Blockchain work?
Ethereum started with the same consensus mechanism as Bitcoin did, the proof-of-work. But the project wants to shift to proof-of-stake. At Ethereum, this new protocol is Casper. Unlike Bitcoin, Ethereum has a Turing-complete virtual machine. This machine can create impactful decentralized programs, better known as smart contracts. The users then should be able to access the features of these programs via transactions. With this, the conditions of the program can be changed depending on the logic and situations.
Technical data for Ethereum
As mentioned earlier, Ethereum depends on the proof-of-work consensus mechanism. The block time (average time in which a block is found) is 15 seconds. The block size is dynamic. However, in the case of Bitcoin, the sum of the transaction data is defined as block size and the sum of gas that was allocated to the transactions. The native coin is called ether (ETH). Because of the disadvantages of proof-of-work, people are working on alternatives, such as the implementation of proof-of-stake and second-layer solutions such as sharding.
ETHEREUM’s token is called ETHER and was created as the native currency for the platform. It also works as the transaction fees for miners on the ethereum network. The foundation of ETHEREUM was designed to be a platform for blockchain-based smart contracts. When running on the blockchain, a smart contract becomes a self-operating computer program that automatically executes exactly as programmed, without the possibility of downtime, censorship, or third-party interference. It can also facilitate the exchange of money, content, property, shares, or anything of value.
Although ETHER was intended to be used to support Ethereum’s platform as a way to facilitate and monetize its DAPPS, it has become a strong contender on exchanges functioning the same way as other cryptocurrencies.
Are Ether Coins Limited?
No, in the case of Ethereum there is no limit. This is the reason why Bitcoin is known as digital gold but you can’t say the same thing about Ethereum. For more information, read this post
The ETH addresses are also not case-sensitive. Ethereum addresses start with “0x” which is a standard identifier for the hexadecimal numeral system. It is concatenated with almost 20 bytes of the hash of the public key.
How to Buy Ethereum?
If we want to be more precise, we buy the token Ether, and not the blockchain Ethereum 😉 But most people today just use the word Ethereum for the token.
Just like buying Bitcoin, Ether can be bought on many exchanges. Here’s a list of solid exchanges where you can buy Ethereum:
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