What is Ethereum? – A Beginner’s Guide

The significance of cryptocurrencies have increased and more and more people are getting aware of the wonderful world of digital currencies.

If you are a first time user looking for virtual currencies to fund in or even an experienced investor looking for a new option, there is so much for you to consider.

The current cryptocurrency market overflows with more than 1200 cryptos to choose from. However, you will want to invest in an experienced and well-established currency which will give you some yield.

If by chance your first preference turns out to be Bitcoin, I will most certainly say that its time you reconsidered your decision.

Ethereum for beginners

There happen to be many more exciting cyptos and it is quite evident that Bitcoin is losing its charm. So what is the current best option would be your next question –  My answer would be Ethereum.

What is Ethereum?

Ethereum is an open-source, free blockchain and decentralized computing platform emphasizing turing-complete smart contract functionality.

Introduced in late 2013, by Vitalik Buterin, as a platform that could leverage the blockchain to store and perform computer programs across an international network of shared nodes, Ethereum has grown to be known as the most well-known and stabilized cryptocurrency outside of Bitcoin.

Ethereum Block Chain

Ethereum is a blockchain based, public computing platform and is the origin of the cryptocurrency called Ether.

It holds a modified version of Nakamoto consensus via transaction based state transitions. 

Along with Bitcoin, Ethereum is deemed to be one of the prominent platforms in distributed ledger and blockchain technology.

Ether can be exchanged between accounts and used to reward participants mining nodes for estimates performed.

Ethereum has never lost its space in the limelight. The coin was perpetually seen as the rival of BTC and has the ability to turn the market around.

Apart from being a virtual currency, ETH has been created as a software platform that enables applications so as smart contracts – that are self-executing, secure contracts – to be developed and operated without the requirement of a third party.

What makes Ethereum Different?

There are many factors that make ethereum a unique cryptocurrency. The most prominent one being the fact that ethereum itself is not a virtual currency.

As per the definition, Ethereum is a software floor that aims to act as a decentralized Internet as well as a decentralized app storage.

A platform like this requires a currency to repay for the resources required to run an application or a program. This is where ‘Ether’ comes into play.

What is Ether? 

Ether is a virtual bearer asset and it does not need a third party of any kind to concoct the payment.

Nevertheless, it not only operates as a virtual currency but also acts as an ‘ammunition’ for the decentralized applications within the ethereum platform.

If a user wishes to edit something in one of the apps inside Ethereum, they only need to pay a transaction charge so that the system can make the change.

How Does Ethereum (ETH) Work?

Ether is a cryptocurrency which works almost in the same way as other cryptocurrencies like Bitcoin. It is a peer-peer cryptocurrency without any central repository or government administration. 

Thus, any trade between two Ethereum wallets is done directly, with only the miner(s) intervening in keeping a record of the transaction.

Ethereum basically took the technology behind Bitcoin and essentially extended its capacities.

It is a whole new network, with its individual Internet browser, coding languages, and a payment system.

ETH Smart Contratcs

Most significantly, it allows users to create decentralized apps on Ethereum’s Blockchain.

What does that mean to you as a user?

As a user, you are allowed to share your innovative concepts over the network.

The applications shared on Ethereum platforms can either be entirely new concepts or decentralized reworks of already existing ideas.

The ETH platform basically cuts out the middleman and all the expenses attached to the involvement of a third party.

Which means whatever like shares or responses your ideas your concept gets they go directly to you in the form of ether.

There is another type of token that is utilized to compensate miners fees for incorporating transactions inside their block, it is known as gas, and every smart contract accomplishment demands a certain amount of gas tobe transferred along with this to invite miners to put it in the blockchain.

How to Buy Ethereum (Ether)?

The most basic and perhaps the most comfortable way of purchasing Ether is by buying it upon exchanges.

All you must to do is find an exchange that sells in Ether and operates within your preference, set up an account and utilize either your bank account, wire transfer or in certain cases even your bank card to buy Ether tokens.

buy Ether crypto currency

These will then need to be deposited in a wallet, which can be rendered by an exchange itself, Ethereum’s original Mist browser or by various other specialized services.

First, you should set an Ethereum wallet to save your coins safely. We have explained the significance of crypto wallets in our previous article.

You can use MyEtherwallet for storing your Ethereum coins which can store any coin on the Ethereum blockchain, including Ethereum. Then purchase Ethereum either by using Coinbase or CEX.IO or any other exchange that offers Ether.

No matter what exchange you use for purchasing your Ether you’ll usually need to go through the following steps.

  • Set up an Ethereum wallet

Before you get into the purchasing process you should most probably get an Ethereum wallet to save your Ether.

There are many types of Ethereum wallets. Users can choose a wallet according to their preference and the reviews provided on the web.

  • Buy your Ethereum

The most simplest way to buy an Ether would be through one of the popular Ethereum exchanges.

It is necessary to make a distinction between an authentic Ethereum exchange that will trade you Ether and platforms like eToro that only let you reflect on the price.

  • Move your Ether into Wallet

Once you buy Ether just make sure that the coins are being saved in your own personal wallet if you are looking for a long term investment.

If you omit your coins on the exchange and the exchange gets hacked or becomes unbalanced you may end up losing all your coins.

Uses of Ethereum

The Ethereum platform empowers developers to build and deploy decentralized applications.

Furthermore, any centralized services can be decentralized by using the Ethereum platform.

The great potential of Ethereum program for fabricating apps is not limited by anything other than the inventor’s creativity.

Ethereum block chain

Decentralized applications, essentially have the capability of improving the correlation between organizations and the public completely.

These days there are a great number of services that charge commission fees for merely implementing an escrow assistance and a ground for users to sell their goods and services.

Future of Ethereum

Considering the recent trends and progressions in the technology, it’s harmless to say that the possibilities of Ethereum as a platform appears to be pretty bright.

As the industry and developers proceed to invest their resources, faith and time in the technology, ethereum blockchain community will resume prospering.

The virtual market is progressing through a hard turmoil of dropping prices and market caps.

Investors around the globe are puzzled with the concept of investing in even the giant cryptos.

Ethereum value was also seen swaying alongside many other coins. In the last few weeks, there has been an improved touch of positivity in the crypto market. While this has not yet hooked up with most currencies, Ethereum is gradually gaining momentum.

According to many crypto enthusiasts, the price of an ETH should reach $1000, if not by 2019 then at least by 2020.

With a growing number of groups across the globe working on groundbreaking applications using the ethereum blockchain, the prospect of innovation is bright, with endless opportunities on the horizon.

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