Ethereum
|
The practical cryptocurrency resource.
Overview
|
|
|
Last Published: Kyle May - 12/28/17
|
The idea behind Ethereum was originally created by Vitalik Buterin in 2013, who wrote the original whitepaper for the Ethereum Project.
Since then there is a development team that works on the entire project. Ethereum itself has four developmental growth stages, two of which have already come to pass:
Unlike Bitcoin, which was designed to be a decentralized digital currency, Ethereum is an application development platform that runs smart contracts on top of it's blockchain using it's own programming language called Solidity. These smart contracts are programs and applications that utilize the native Ethereum blockchain to prevent downtime, censorship, fraud or third party interference to their services and applications making any business able to enable the benefits of blockchain technology with relative ease. |
Ethereum Foundation Team |
Purchasing Ether (ETH)
Safest exchanges/buying methods & what happens when you purchase.
|
The Ethereum platform uses it's own cryptocurrency called Ether (ETH) which is what all transactions occur with on the Ethereum Network.
Purchasing Ether can be done relatively easily thanks to wide adoption by prominent exchanges, such as Coinbase and Bittrex. We have listed the top rated exchanges in the United States for convenience. To purchase Ethereum in the United States, you will need to verify your identity and list a method of payment on file with the exchange of your choosing. After this initial account setup is complete, and you purchase your Ether, you will have to wait for the transaction to be "mined" into acceptance. This process usually takes a few minutes, and once its complete you will see your ETH balance update inside your specific wallet address. |
|
Caution: Before setting up your account and making a purchase, take a look at the address bar in your browser to ensure the website contains the correct URL and has the https certificate for the exchange you are buying from. Over half a billion dollars are lost to phishing schemes each year.
Storing Ether (ETH)
Cold Storage/Hot Storage/Functionalities & Solutions
|
There are many storage solutions for Ethereum currencies, which are often labeled as wallets for simplicity, however it's important to recognize and understand the security implications of each wallet type and how secure they actually are.
|
|
|
Software Wallets
Downloadable wallet software that stores your funds entirely offline on a device. 
|
Hardware Wallets
Highly secure devices that offer diverse storage, as well as improved security and convenience. 
|
Paper Wallets
Printable wallets which contain the keys to accessing your funds on the blockchain. 
|
|
Important: Cryptocurrency can be lost forever in storage when computers crash, when people lose their paper wallets or forget their account passwords. The last thing you need to know about storing Ethereum is that you will want to use an ERC-20 compatible wallet. ERC-20 is an Ethereum blockchain standard that defines a common list of rules for all Ethereum tokens to abide by. Just think of it as a set of rules that ensures all tokens on the Ethereum network operate the same, which is important for storage since only ERC-20 compatible wallets can accept tokens, such as Tierion Network Tokens (TNT) and Kyber Network Tokens. (KNC) If you receive any of these tokens in a non-ERC-20 compatible wallet you will not be able to see the balance, send them, or manage them, essentially trapping them forever. |
|
Trading With Ether (ETH)
Important Practices/Supply/Demand/Uses & Payments
|
Trading with Ethereum is similar to Bitcoin, however there is one main differential, which is that with Ether transactions there is a "Gas Limit", as well as a cost per gas unit metric known as "Gwei".
Before we get into it, just think of gas and Gwei as a processing fee, wherein the higher the amounts of these two values, the higher the processing fee there will be on any given transaction.
Most wallets automatically set you at the default amounts for fees, just know that if a transaction fails due to insufficient gas, you need to set a higher amount. |
|
Trading Ether can be done on any supporting exchange, we recommend GDAX, Bittrex, and Kraken, as they are operating under U.S. Securities Laws and will have to offer more transparency and support to their customers. That said, you can setup accounts wherever you wish, just know that exchanges operating in nations other than the U.S. often see higher volatility and risk.
|
Making Ether trades within exchanges are conducted within specific pairs of tokens or currencies. That is, you are exchanging one currency for another.
When you make a trade, you establish your bid, the units of currency you wish to buy/sell, and the total amount you wish to buy/sell. Once this is set, your order will either be fulfilled instantly if set at market prices, or until someone agrees to make that trade with your order if you set a bid higher or lower than market prices. Some exchanges do not have every available Ethereum token or coin you are looking to trade with, which is widely due to legal restrictions being placed on Initial Coin Offerings (ICOs) worldwide, and more reputable exchanges wanting to have more control over the assets they list. |
|
For example, if you wanted to buy Tierion Network Tokens (TNT), you would need to go on a smaller exchange such as Liqui or Etherdelta to make your trade. These exchanges often suffer liquidity and service issues which can leave funds stranded longer than you like on their exchange wallets. Due to this, if you are looking to buy an Altcoin with Ether we recommend:
|
|
Ethereum Integration and Use
Use Cases/Integration/Where to Start & How to Take Advantage
As I have explained in my blockchain overview, blockchain technology is not a solution to everything, and in fact holds many limitations that non-distributed, centralized networks do not. Due to this, It is always wise to take a serious look into what a blockchain project is actually solving in the world.
For the Ethereum blockchain, the solution being created is an application platform for businesses to build their services on top of a distributed and highly decentralized network. This network allows businesses to take advantage of common blokchain benefits such as immutable ledgers, extremely secure transactions, constant network availability, and finally, greater trust and transparency between all parties.
Examples of some varied and specific use cases can be found below.
For the Ethereum blockchain, the solution being created is an application platform for businesses to build their services on top of a distributed and highly decentralized network. This network allows businesses to take advantage of common blokchain benefits such as immutable ledgers, extremely secure transactions, constant network availability, and finally, greater trust and transparency between all parties.
Examples of some varied and specific use cases can be found below.
Use Case |
Ethereum Application |
Comparable Application |
Cloud Storage |
||
Digital Advertising |
||
Data Verification |
||
Identity Verification |
||
Credit Risk Assessment |
||
Global Payment Engine |
Attention: AccruBit is not affiliated with the above companies, or any other companies or organizations listed on this page. All listings and links by us are not representative of endorsement, nor are they to be considered as an advertisement of services. They are listed purely for educational and research purposes by our community of readers. We do not receive monetary gain for listings.
So why bother using Ethereum for these services when they are already done outside of a blockchain? Well for starters, businesses receive the basic benefits of a blockchain which are:
Ethereum specifically empowers businesses with the integration tools and development platfrom necessary to achieve these benefits without the need to pay the cost of managing and developing a blockchain themselves.
Furthermore, the massive scale of the Ethereum network greatly aids in ensuring the security of the network isn't compromised by brute force. This is comparable to smaller networks, where it is much easier to take control of the blockchain for nefarious purposes due to them having smaller and less distributed network resources.
- Reduced Risk of Tampering and Collusion
- Faster Settlements Between Parties
- Reduced Costs and Infrastructure Requirements
- Higher Transparency and Ownership of Assets
- Irrefutable Audit Trails
Ethereum specifically empowers businesses with the integration tools and development platfrom necessary to achieve these benefits without the need to pay the cost of managing and developing a blockchain themselves.
Furthermore, the massive scale of the Ethereum network greatly aids in ensuring the security of the network isn't compromised by brute force. This is comparable to smaller networks, where it is much easier to take control of the blockchain for nefarious purposes due to them having smaller and less distributed network resources.
Mining Ethereum
Purpose/Requirements/Economics/Setup & Configuration
|
Ethereum currently uses Proof of Work (PoW) mining, which is a computationally intensive work that requires a high level of processing power and uptime to secure it's network and arrive at a consensus within the blockchain.
In layman's terms, Ethereum miners are a network of decentralized computers that dedicate themselves to creating, verifying, and processing the blockchain with the following services:
|
Since providing these services requires dedicated hardware and added utility cost for the miner, miners who successfully process and verify a transaction block are provided the following rewards:
|
Now Ethereum mining is not as easy as buying some hardware and earning rewards. Each block must have the proof of work of the given difficulty if it is to become validated by the network. This difficulty is created through the use of cryptographic functions called hash functions. These functions require high end GPUs and more commonly as of today, ASIC miners to solve quickly.
In Ethereum mining, the difficulty of the hash functions is a dynamic value that constantly adjusts itself in order to ensure the network produces one block of transactions on an average of every 12 seconds. What this does is ensure a consistent and predictable network across time, as well as ensure a bad actor can't take over the blockchain by force.
In Ethereum mining, the difficulty of the hash functions is a dynamic value that constantly adjusts itself in order to ensure the network produces one block of transactions on an average of every 12 seconds. What this does is ensure a consistent and predictable network across time, as well as ensure a bad actor can't take over the blockchain by force.
Developing With Ethereum
Programming Language/Development Environment/Educational Resources
|
The main purpose of the Ethereum platform is to provide a distributed blockchain environment for the development and use of decentralized applications. These applications, referred to as DApps, are developed primarily using the programming language called Solidity.
Solidity itself is a contract oriented language used for implementing smart contracts on various blockchains. Despite what many think, Solidity is not specific to Ethereum alone, and is also used in private blockchain platforms such as IBM's Hyperledger. |
|
|
Was this helpful? Donate Bitcoin to AccruBit at:
1NxZnNmwfe1LZVgx2cbwf98V6QL41NwqV2
|
|
|
Navigation
|
Our Website
|
International
|
© 2017 AccruBit. All rights reserved. - Privacy Policy - Terms of Service