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:

  1. Frontier: The first version of the platform.
  2. Homestead: The second version of the platform.
  3. Metropolis: The current version of the platform.
  4. Serenity: The proposed final version of the platform.

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.

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. 
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  1. Hot storage: This is when your Ethereum wallet's private keys are created and stored online, such as a wallet in an exchange. Under this condition, your Ether is at risk of being lost due to faults of the 3rd party. There have been many documented cases of exchanges being hacked and losing their user's funds. 
  2. Cold storage: This is when your Ethereum private keys are created and stored in a secure offline environment. Examples of this are paper wallets, offline software wallets, and hardware wallets. This method of storage is the most secure as only through physical access are your funds at risk. 
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.
​ 
  • Gas Limit is the maximum amount of gas allotted to the transaction, 21000 is the default amount which is perfect for simple transfers of ETH. You need higher gas amounts to make successful transfers to smart contracts.
  • To know the gas amount needed for smart contracts, you must check the development documents for the contract in question, or by asking the support team for the appropriate gas amount.
  • Gas Price is the price of each gas unit measured in a fractional unit of ether, typically gwei. This often fluctuates, but the baseline sits in between 20 and 30 gwei. The higher the Gwei, the faster your transaction will be mined.
  • Insufficient gas amounts in the Gas Limit will result in a failed transaction. when this happens your transaction is cancelled, however you will lose the gas fee you initially setup.
  • Current Gas Prices can be checked online in Ethereum tools like  ( Etherscan or EthGasStation ).

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:
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  1. Know exactly what you want before moving Ether to smaller exchanges.
  2. Send the exact amount of Ether you need to make the purchase you want.
  3. Extract your cryptocurrency back into a more secure wallet once your transaction is complete.

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.
Use Case
Ethereum Application
Comparable Application
 Cloud Storage
Storj
Google Drive
Digital Advertising
Basic Attention Token​
Adroll
Data Verification
Tierion
​Global Sign
Identity Verification
Civic
IDology
Credit Risk Assessment
PayPie
Experian
Global Payment Engine
​Request Network
PayPal
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:
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  • 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:

  • Processing clusters of transactions known as blocks
  • Facilitating the creation of the Ether currency
  • Verifying, securing, and maintaining a ledger of all past transactions
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:

  • A static block completion reward that is equal to 5 Ether
  • The total gas fees that it generates from all transactions within the block
  • ​An award of 1/32 per Uncle block included. 
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.

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.

Developer Resources

For development tutorials, background education, and official development guidance head over to the official Solidity guide below.
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