The #2 Ranked Coin on CoinMarketCap.com
According to Wikipedia, “Ethereum is an open-source, public, blockchain-based distributed computer platform and operating system featuring smart contract functionality”. In simpler terms, Ethereum wants to become a “world computer” that would decentralize the internet, turning servers and clouds into “nodes”, which are run by volunteer computers. For example, consider the Google Play Store or Apple’s App Store. Currently, when you download or purchase an app, that transaction is governed by Google or Apple, a third party. However, Ethereum removes the third party governance, so that if you wanted to download or purchase an app, you would complete the transaction directly with the author, removing risk of a third-party entity that could change or remove your product at any time.
Ethereum was proposed in late 2013 by Vitalik Buterin, a co-founder of Ethereum and Bitcoin Magazine.
Similar to Bitcoin, Ethereum is decentralized, which means that no entity controls the Ethereum network. Developers like Vitalik Buterin are able to impact Ethereum, but any developer cannot shutdown the network. Developers can only cause a hard fork, a split of Ethereum into different variations, but are not able to completely change the original network.
Ethereum is a platform, with Ether as the token that fuels the network. Ethereum uses Smart Contracts, which is computer code that facilitates the exchange or anything of value. Developers can create any operation on the network, allowing the process of creating a blockchain application easier than ever. Instead of building an entirely original blockchain for each new application, Ethereum allows development of any number of applications all on their platform. For example, many new cryptocurrency ICOs are now created on the Ethereum platform, due to the ease of creating new blockchains.
Yes! Ethereum is currently the second largest cryptocurrency by market cap, and will continue to evolve due to its easy blockchain generation options. Similar to how new ICOs are created on the Ethereum platform everyday, developers will continue to create new applications. Furthermore, with the development of blockchain technology, future businesses will continue to move toward blockchains for their technology advancements.
Similar to Bitcoin, Ethereum can be mined with GPU. However, just like with Bitcoin, the difficulty in mining Ethereum has been greatly increased. Without advanced computer systems specialized for mining cryptocurrency, mining Ethereum would be extremely slow and difficult. Now that Ethereum has become more popular, there are other ways like faucets or giveaways to earn small amounts of Ethereum.
Ethereum’s anonymity is similar to that of Bitcoin. The only thing public about the transactions are the addresses sending the Ether, the amount of Ethereum sent in each transaction, and the address receiving the Ether.
<100 million, but no true maximum.
All that’s needed to complete a Ethereum payment is a wallet with Ethereum. Similarly to paying with cash (in this example, I’ll use US Dollars), you would simply send your USD (Ethereum) from your wallet to another person’s address (I’ll discuss wallets further below). Receiving Ethereum is similar, just like how someone else would give you cash for you to put in your wallet, someone else will send Bitcoins from their wallet to your wallet’s public address. The fee for the transaction is called gas, and is mathematically determined by the miners.
The greatest value of cryptocurrency like Ethereum is its platform decentralization and its ease in creating new blockchains. Because most applications are created from the ground up, having a platform for easy blockchain creation will continue to be valuable, driving the value of the coin. Furthermore, the decentralization of the platform is similar to the decentralization of Bitcoin, removing the risk of having a third-party entity at the helm of an application. With more and more cryptocurrencies and companies resorting to blockchain technology, Ethereum’s value will only continue to evolve and appreciate.
Furthermore, there are no scams using reverse payments. Once a payment is sent, the currency cannot be returned to the payer unless the receiver agrees to a refund. This means greater security of payments for the seller, increasing Bitcoin’s popularity in commerce. Because the Bitcoin network completely decentralized, any person of any race, culture, or age, can exchange Bitcoin. The hassle of paperwork that banks require are not existent in Bitcoin wallets. Additionally, even with Bitcoin’s pricing fluctuations, in general, Bitcoin is rapidly appreciating, which means that the value of Bitcoin is still going up, making each Bitcoin you receive now more valuable in the future.
The disadvantages of investing in Ethereum remains limited. However, like with all cryptocurrencies, the market is still extremely volatile. In general, due to Ethereum’s value as a decentralized blockchain platform, it will continue to retain great value.
With Ethereum freedom from any government or ruling company, greater trust can be placed on Ethereum. Its anonymity only improves its security, and its platform capabilities in allowing other applications to be created on their network only further incentivizing greater trust in the Ethereum network.
The Ledger Wallet is definitely the safest bet, but it’s also one of the most expensive wallet out there. For beginners, Coinbase or Bittrex would work perfectly, to store smaller amounts of Ethereum, with easy methods of exchanging for other cryptocurrencies.
Coinbase: Coinbase remains one of the largest Ethereum exchanges in the world, a platform where users are able to buy and sell Ethereum, as well as exchange Ethereum for other coins, like Bitcoin and Litecoin. However, the risks of storing large amounts of Ethereum on Online Exchanges is the greatest, with possibilities of getting hacked.
Guarda is a multicoin wallet that also supports Ethereum. It has options for an online website wallet (an even easier storage option but not nearly as safe) and a software download wallet that provides greater security.
Trezor Wallet: The Trezor Hardware Wallet is one of the safest storage methods for cryptocurrency. Cold Storage options reduces 3rd-party risks and cybersecurity risks by acting like a USB that is unable to be hacked from online or through the WIFI.
The only way to lose Ethereum is to forget your password to your virtual wallet or to get your account shut down/hacked. If you lose Ethereum in these ways, there is unfortunately no way to recover it. Most of the times the Ethereum that is lost remains lost and that amount is taken away from the world pot of Ethereum. However, because there is a limit on the amount of Ethereum to be produced, the price of each Ethereum will rise.
Definitely. Unlike a currency like Bitcoin, Ethereum is a platform, which adds greater value for companies and countries interested in utilizing blockchain technology. Even now, the majority of new cryptocurrency ICOs are created on the Ethereum platform, and other companies are beginning to do the same. With blockchain technology extremely valuable to businesses and banks alike, Ethereum continue to be used by major companies and countries.