What is Ethereum and how it evolved?
For most people, the first time cryptocurrency they know is Bitcoin. However, apart from Bitcoin, there are also other cryptocurrencies. Today, we will introduce another crypto - Ethereum. Ethereum is also a decentralized computing platform that can run various applications, covering the entire field of DeFi. Launched in 2015, Ethereum is the second-biggest cryptocurrency by market cap, next only to Bitcoin. But unlike Bitcoin, it wasn’t designed to be a cryptocurrency. Instead, the Ethereum founders set out to build a new type of global, decentralized computing platform that taps into the security and openness of blockchains and extends those attributes to a wide array of applications. As a blockchain network, Ethereum, like Bitcoin, is an open-source project that is not owned or operated by any single individual. The network’s users can create, publish, monetize, and use applications on the platform, and use its Ether cryptocurrency as payment. Insiders call the decentralized applications on the network “dApps”.
How does Ethereum work?
Like all cryptocurrencies, Ethereum works on the basis of a blockchain network. In a sense, the network is distributed because everyone participating in it holds an identical copy of a ledger that allows them to see all past transactions. Ethereum is managed by all holders of the distributed ledger as it is decentralized.
What sets Ethereum apart from Bitcoin is that it is more like a computer. Ethereum is much more flexible than the Bitcoin blockchain in terms of the storage and transmission of personal data or the processing of complex financial transactions. Developers can use the Ethereum blockchain to build a huge variety of tools, spanning lending, borrowing, and trading. To pay for the relevant service fees, the network uses its own Bitcoin-like cryptocurrency called Ether (or, more commonly, ETH), which can be used to buy goods and services.
How to get Ethereum?
If you are new to Ethereum, before buying Ether (ETH) and using it in the network, you should know that every address on the Ethereum network is issued a public key and a private key, and you’ll need a wallet to manage your crypto assets. To begin with, you will need to choose a crypto exchange. Some of the major exchanges include Coinbase, Binance, and Kraken. Secondly, you need to deposit an amount of fiat currency into the exchange, such as the dollar, or link your exchange account to a bank account or debit card to purchase ETH. Next, you need to buy ETH. Once you made deposits into your account, you will be able to use this fund to buy ETH and other assets at the current ETH price. Upon receiving coins in your account, you may decide to hold or sell such crypto assets or trade them for other cryptocurrencies in the future. Finally, you will also need to use a crypto wallet. Although you can always store ETH in the default digital wallet of the trading platform, such wallets may pose a security risk. Another approach is to transfer the coins that you do not plan on selling or trading anytime soon to another crypto wallet or a cold wallet without an Internet connection to ensure the safety of your assets.