What is Ethereum?

ethereum blockchain

This is a short article about the second biggest cryptocurrency in terms of market cap, at $16.2 B at the beginning of December 2019. Many newcomers to cryptocurrency do not know that there are other cryptocurrencies besides the original crypto. If bitcoin aims to be the next digital money that replaces internet banking than ethereum is a next level operating system for complex financial systems replacing third parties which are vulnerable to external influences.

“Bitcoin is first and foremost a currency; this is one particular application of a blockchain. However, it is far from the only application. To take a past example of a similar situation, e-mail is one particular use of the internet, and for sure helped popularise it, but there are many others.”

Ethereum Co-Founder, Dr Gavin Wood

Ethereum is basically a blockchain-based computing platform and operating system. It can function as a stand-alone cryptocurrency (Ether) and allows others to build tokens and other decentralized applications on the ethereum network. The Ethereum network was used to create a new form of funding called ICOs (Initial coin offerings) through the use of it’s smart contracts. The first token sale was held in 2013.

Ethereum Price

The Ethereum Price is currently $149 (3/12/19), this is way down from Ethereum’s all time high at its peak of around $1400 with a market cap of $132 Billion at the time in January 2018. The meteoric rise in the value of Ethereum was driven by the ICOs and the Bitcoin Bull run in 2017, but crashed due to the fall of ICOs as a method of raising funding due to scams and governments clamping down on ICOs ( the SEC in particular).

 

Ethereum vs Ethereum Classic

Ethereum went live in July 2015 where around 72 million Ethereum coins were ‘Pre-mined”. A flaw in some smart contracts led to the theft of $50 Million worth of Ether, which led to an Ethereum fork (split) into two seperate blockchains. The new version was called Ethereum (ETH) and the one based on the original vulnerable version was renamed Ethereum Classic (ETC).

 

Ethereum Mining

Getting started with Ethereum mining is easier than Bitcoin mining because you can start mining Ethereum with  Graphical Processing Unit (GPU). Ethereum is one of the more profitable cryptocurrencies to mine.

 

Mining Ethereum requires 4 steps:

 

  1. Installing GPUs on your computer and setting it up
  2. Getting an Ethereum wallet
  3. Joining an Ethereum mining pool
  4. Start mining

You can calculate your potential profits using an ethereum mining profit calculator which uses the latest metrics such as mining difficulty, your computer’s power and other factors to estimate how much you could make.

 

Buying Ethereum

Most major cryptocurrency exchanges sell Ethereum in exchange for money or other cryptocurrencies such as bitcoin. All you need is an Ethereum wallet to receive the Ethereum you buy from those exchanges.

Want to get involved in Ethereum mining?

Find out how to get involved in low risk blockchain mining investment.