Ethereum (ETH) – The foundation for our digital future

Ethereum gives you open access to cryptos and info-friendly services for all people. If you are not really don't really understand what Ethereum is, then don't worry. This article tells you everything that you need to know about Ethereum.

What is Ethereum?

Ethereum is a decentralized open-source blockchain system that has its very own cryptocurrency called Ether. This means that for Ether (ETH), no specific company can decide when to print more ETH, or change the terms of use policy and decide when to stop ETH.

Ethereum is the second-largest crypto by market capitalization after Bitcoin.

Vitalik Buterin had first told about Ethereum in a 2013 whitepaper by him. Along with a few other co-founders (eight co-founders, a very unusual number of people for a crypto project) he worked really hard for the project.

Vitalik secured the fundings and officially launched the project in July 2015.

With its own smart contract functionality, Ethereum allows you to move money directly without providing all your personal details. All with just a small fee. Ethereum can be used for decentralized finance, the exchange as well as creation of NFTs (non-fungible tokens) and also has been utilized for many initial coin offerings. Ethereum can also be used for Decentralized Autonomous Organisations (DAOs).

Ethereum 2.0, also called Eth2 is the next upgrade on the Ethereum blockchain. Ethereum 2 is said to be released in phases with it’s first one starting in 2020. This next level update plans to make Ethereum more scalable, more secure, and more sustainable. The Beacon Chain is already live, the Shard chains are planned to release in 2021 and the docking is planned for 2022. So by the end of all the upgrades, the Beacon chain wll include Shard 1, Shard 2, Shard … and the Mainnet. One of the key updates in ETH2 is the introduction of staking.

With its own smart contract functionality, Ethereum allows you to move money directly without providing all your personal details. All with just a small fee. Ethereum can be used for decentralized finance, the exchange as well as creation of NFTs (non-fungible tokens) and also has been utilized for many initial coin offerings. Ethereum can also be used for Decentralized Autonomous Organisations (DAOs).

Ethereum 2.0, also called Eth2 is the next upgrade on the Ethereum blockchain. Ethereum 2 is said to be released in phases with it’s first one starting in 2020. This next level update plans to make Ethereum more scalable, more secure, and more sustainable. The Beacon Chain is already live, the Shard chains are planned to release in 2021 and the docking is planned for 2022. So by the end of all the upgrades, the Beacon chain wll include Shard 1, Shard 2, Shard … and the Mainnet. One of the key updates in ETH2 is the introduction of staking.

Ethereum Logo
Photo Credit: ethereum.org

Who are the other co-founders of Ethereum?

Ethereum was founded by eight people, they were:

  1. Vitalik Buterin
  2. Antony Di lorio
  3. Charles Hoskinson
  4. Mihai Alisie
  5. Amir Chetrit

These people were the initial five in December 2013.

Joseph Lubin, Gavin Wood, & Jeffrey Wilcke were added in early 2014 as founders.

How many of these coins are there?

As of August 2020, there were said to be around 112 million coins currently in circulation. 72 million of the total coins were issued in the first ever block of Ethereum. 60 million from the 72 million were allocated to the contributors. The remaining 12 million of these were given to the fund.

A lot of coins were given as rewards to the miners on the Ethereum network. The original reward was 5 ETH and then it slowly went down to 2 ETH in 2019.

Ethereum’s security and chances of getting hacked

Nearly every application that you have or are using operates on a centralized server, one example is Google. To protect your personal information, you are trusting a company which guarantees to protect your data and your information.

Sadly, centralized servers get hacked nearly all the time and there is nothing that we can do to stop it. Only hackers can stop hacking into servers, but this won’t work out as a hacker’s job is to hack.

Decentralised servers are a lot better than centralised servers. As explained before, their data isn’t stored in one single server, it is distributed to different servers across the network.

There is only one way for it to get hacked and that is if somebody controlled more than 51% of the Ethereum network which is not easily possible.

For a hacker to gain access, they would have to generate more than 51% of the mining power across the network and they would only get access for a very less amount of time so it would actually be a waste of time and money to do this.

Ethereum Wallets

To start with Ethereum, you need an Ethereum Wallet. Ethereum wallets are like an internet banking app for cyptos. Ethereum wallets allow you to manage your transactions, access your funds, etc. You can switch wallets whenever you want as your Ethereum account is not integrated with your wallet. Ethereum Wallets allow you to manage your account. Creating an Ethereum account is not necessary as you can create it with an Ethereum Wallet. An important safety measure whilst using your Ethereum Wallet is to note down your seed phrase – not on your computer, in a notebook or something else.

A few examples of Ethereum Wallets are –

  • MetaMask
  • Argent
  • AlphaWallet
  • Trust Wallet
  • Coinbase Wallet

With Ethereum Wallets you can also browse DApps. Your login is your wallet. DApps are open-source, i.e. you can copy and modify the code, decentralized apps that are Turing Complete – they can do anything when given the resources required. DApps run on a blockchain network. The backend of DApps runs on a decentralized peer-to-peer network unlike normal apps which run on centralized networks. As they are decentralized, the DApps do not face censorship, that is you cannot be blocked from doing specific things. Another advantage of DApps is that they have built-in transactions without the need of an intermediary (third party) and are native as it uses Ether (ETH) for transactions in DApps. It is also secured using strong cryptography and thus makes it harder to hack and bug the services. The DApps will never go down and crash. It can only crash if Ethereum itself goes down. As well as this, they are also isolated, i.e. they do not use any other process in your computer. DApps store their data in a Blockchain.

To quicken up the transactions made, a set of rules are created and they are stored on the blockchain. These sets of rules get executed automatically and don’t need anyone to imply them on blockchain. These sets of rules that run by themselves when a transaction is made are called smart contracts. A smart contract can define conditions for corporate bond transfers, include terms for travel insurance to be paid and much more.

The logic of DApps are made using these sets of rules, i.e. smart contracts.

The definitions of decentralized and peer-to-peer are given below.

Decentralized – In a decentralized service, several authorities rather than a single one has control over the service. No one organisation can determine the value of these coins, which keeps it safe and secure. In a centralized service, however, a single party has control of the service.

Peer-to-peer – A peer is an equal member of a distributed network. Peer-to-peer platforms are decentralized and allow you to directly transfer cryptos without any third-party being involved.

Checking the status a transaction

When you have done a transaction and want to know its status, just check out the following steps:

Step 1: Head on to a Ethereum Blockchain Explorer like Etherscan or EthVM.

Step 2: Place your Txn hash (Transaction hash) into the search bar at the top.

Here, you will see the status of your transaction such as; Success, Failed, Transaction not found or Pending.

What is the EVM

EVM stands for Ethereum Virtual Machine and is a software platform. It is based on blockchain and used to make DApps, Decentralized Apps. DApps creation with EVM, the Ethereum Virtual Machine, does not require hardware that is really powerful. Ethereum functions on opcodes, operation code.

Opcodes is the part of the code that specifies what operation the EVM has to do. It is a set of instructions. As programming languages used to develop smart contracts, like Solidity, Vyper, Serpent, etc, cannot be executed by the EVM, opcodes are compiled so that the machine can understand them.

The EVM is isolated, i.e. they do not use any other process in your computer. To destruct the EVM account, you have to use the Solidity command selfdestruct. To learn more about

Ethereum Gas

On the Ethereum blockchain, Gas refers to the fee that the user pays in order to process a transaction. Just as much as a car needs fuel to run, the Ethereum platform needs gas in order to operate. So, Gas is a unit, measured in gwei (a small fraction of the crypto ETH also known as nanoether), that measures the amount of computational effort put in to carry out certain operations on the ethereum network.

The exact price of Gas is not specific as miners set the price based on supply and demand for the miners network such as the computational power required to process self-executable smart contracts.

Denominations of Ethereum

There are many denominations of Ether, the smallest being wei. Here are the ‘orders of magnitude’ of Ether.

  1. Wei – 0.000000000000000001 ETH
  2. Kwei – 0.000000000000001 ETH
  3. Mwei – 0.000000000001 ETH
  4. Gwei – 0.000000001 ETH
  5. Microether – 0.000001 ETH
  6. Milliether- 0.001 ETH
  7. Ether- 1 ETH
  8. Kether- 1,000 ETH
  9. Gether – 1,000,000 ETH
  10. Tether- 1,000,000,000 ETH

How to buy Ethereum

To buy Ethereum, you can use websites and apps like coinbase, binance, etc.

A few websites that can be use to purchase Ethereum are:

Coinbase pro – pro.coinbase.com

Coinbase – coinbase.com

Binance – binance.com

Kraken – kraken.com

Bitstamp – bitstamp.net

A few advantages of ETH

  • You don’t need to provide all your personal information.
  • Peer-to-peer network
  • Decentralised network
  • Second highest market capitalisation after Bitcoin.

Trading Volume

The trading volume of a crypto asset, or cryptocurrency, is the worth of a cryptocurrency being traded in a period of time. It is mostly calculated for 24 hours. The 24h trading volume of Ethereum, in 11-01-2021, is roughly $45,000,000,000. That means $45,000,000,000 worth of Ethereum has been traded in the last 24 hours. The trading volume generally does not remain constant.

A few key points

  • The price of Ethereum is currently $1306.5 
  • The current market capitalisation is $147,323,343,000.
  • ETH met its all time lowest price five years ago on October 21 2015 with a price of $0.4209
  • ETH met its all time highest price three years ago on January 13 2018 with a price of $1,432.88.
  • Ethereum’s current market dominance is 13.31%.
  • Ethereum’s current ranking in the cryptocurrency market is rank number 2.
  • Ethereum was funded through a process called “crowdfunding”

Disclaimer: Digital Wallets News does not recommend that any cryptocurrency should be bought, sold, or held by you. Do conduct your own due diligence and consult your financial advisor before making any investment decisions.

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