Elaborating Ethereum And Understanding How It Works

At its essence, Ethereum is a decentralised global software platform which is powered by blockchain technology. However, Ethereum is most popularly known for its native cryptocurrency, which is Ether (ETH). Ethereum is a sort of blockchain-based software that can be used by developers to create a wide variety of completely secure technologies. The native cryptocurrency Ether (ETH) is used to pay for transactions on the Ethereum platform. Moreover, Ether (ETH) has become so popular that it has the second highest market capitalisation of all cryptocurrencies and is frequently traded on crypto exchanges across the world. Ether (ETH) which is the native currency of Ethereum can be stored on a digital or a physical crypto wallet, like other cryptocurrencies. The Ethereum software is designed to be scalable, secure, and decentralised, meaning one party cannot have all the controlling power. It is the platform of choice for a large number of crypto developers worldwide.

Vitalik Buterin initially introduced the concept of Ethereum through a white paper that was published in 2014. The Ethereum platform was then launched in 2015 by Buterin and Joe Lubin. The founders of Ethereum believed in the potential of blockchain to serve multiple useful functions other than enabling virtual payment and transfer of cryptocurrencies. As a result, the Ethereum platform supports many different functions such as smart contracts, decentralised finance (DeFi), non-fungible tokens (NFTs) and more.

Like most other cryptocurrencies, Ethereum is also based on the technology of blockchain. This technology is also called distributed ledger technology (DLT) and it stores the history of all transactions on a blockchain in a way that they are unalterable and transparent for everyone to see. A copy of all these transactions is stored on cryptographic blocks, which are maintained throughout the crypto network. Moreover, every transaction on the Ethereum blockchain has to be validated through the proof-of-stake mechanism, ensuring transparency and secure record keeping of all the transactions that happen on the blockchain. Proof-of-stake is a new type of verification mechanism that was introduced into Ethereum in September 2022. Previously, the Ethereum blockchain worked on a proof-of-work mechanism which was a lot more energy intensive.

As Bitcoin and Ethereum are some of the oldest and most influential cryptocurrencies with the largest market capitalisations, they are often compared. While Bitcoin and Ethereum do share many similarities, there are also some major fundamental differences between them. While the Bitcoin blockchain was created only as a form of cryptocurrency for the exchange of funds in a decentralised manner, Ethereum on the other hand is a programmable software platform that enables others to create smart contracts, crypto tokens, NFTs and more on the Ethereum blockchain.

While Bitcoin was designed to strictly be a method of payment, Ethereum was built to serve a multitude of technological applications. Moreover, the maximum number of Bitcoins that can ever be created is 21 million. Once these 21 million Bitcoins have been mined, they can only be traded among users, but no new coins can be made. On the other hand, an endless amount of Ether can be mined. As of April 2022, around 120 million Ether had been mined. However, the amount of time it takes for a single Ether to be mined ensures that the total amount of Ether grows slowly over time.

As mentioned above, you will need to create your own crypto wallet where you can store Ether and other cryptocurrencies. An online wallet like Metamask or Trustwallet can serve your purpose. You will then have to register yourself and create an account on a cryptocurrency exchange like Binance or Coinbase. You can then purchase Ethereum or other cryptocurrencies through these crypto exchanges and then transfer them to your personal crypto wallet. Moreover, if you do not wish to purchase Ether through an exchange, you could find a seller that is willing to do a P2P (peer-to-peer) transaction and buy Ether or other cryptocurrencies from them.