What is Ethereum (ETH)? Future of ETH Cryptocurrency and know how to buy ETH
#1 - Ethereum: The Basics
What is Ethereum?
Ethereum is one of the most popular cryptocurrencies in the world (only second after Bitcoin, according to CoinMarketCap, Ethereum has made itself a name to reckon with in the crypto world.
Ethereum is a blockchain based network which can be used to create decentralized apps.
The Ethereum token is Ether - the cryptocoin which fuels the Ethereum network. Ethereum’s USP lies in the fact that is not used only for digital currency transactions, it can also be used to create massively decentralised contracts and applications.
According to Forbes, creator Vitalik Buterin raised around 18 million in 2014 by announcing Ether, and launched Frontier, the initial version of Ethereum, which began with a Swiss Company Ethereum Switzerland GmbH.
#2 - What are the benefits of Ethereum?
Like any other cryptocurrency, the foundation of Ethereum is its blockchain technology. However, instead of performing only peer-to-peer transactions, Ethereum technology can also be used to run a decentralized application.
Such applications are called DApps. Since these applications contain code which runs on a decentralized network, the activity is visible for all to see, and is not particularly owned by anyone.
Operating this network requires energy in the form of the Ether token, which ‘miners’ - like those of Bitcoin - engage in Ethereum mining to secure the network. They earn the ETH cryptocurrency for their efforts, which is why the practice is also called ETH mining.
Ethereum Transactional Process
Ethereum works by the way of Smart Contracts. According to Coindesk, the concept of Smart Contracts was developed in 1993 by Nick Szabo.
In a Smart Contract, the user and receiver agree on certain conditions, which are input in the form of codes, and the Smart Contract is executed according to the given data. This is a very important aspect of DApps, as it ensures that during the transaction process, no part can cheat the other. As soon as the conditions are met, the transaction takes place.
According to CNBC, the Enterprise Ethereum Alliance has support of about 86 firms, including Toyota, Merc, Rabobank, and John Hancock Financial, which is going to use Ethereum to keep a track of whether the KYC-AML (Know Your Customer-Anti Money Laundering) guidelines are being followed or not in wealth management. Not surprisingly, the extent of usage of Ethereum blockchain stretches beyond financial purposes. As stated by the Fortune Magazine, Walmart is using it to track how pigs are moving from China to America.
Ethereum’s transparency and the elimination of the need of middleman are what makes it attractive to financial institutions and other corporations. The financial records of the company can be placed in the form of blocks and will be recorded in their totality, and be available to all employees so as to be able to verify it, instead of being housed secretively with a single person. The records entered in the ledger cannot be changed, and be entered permanently.
Most importantly, the Smart Contracts, which are an integral part of the Ethereum network, cannot be changed by either part once they have been approved by the parties involved. This ensures timely and correct transaction, with, no loss to the people involved.
Another of Ethereum’s major attractions is the speed. The block time of Ethereum is 12 seconds, much faster as compared to 10 minutes of BTC. This allows for faster mining and transactions.
#3 - How to Buy & Store Ethereum
Buying Storing Ethereum
Ether can be bought from leading exchanges such as Binance, Bittrex, Coinbase and more using fiat currency. Earlier, users first had to buy BTC, and convert it to ETH since no fiat currency pairings were available.
Now, the process is quite simple - you just need to register, verify your account, and begin trading. To avoid frauds and other financial issues, some exchanges operate via KYC-AML guidelines to ensure no identity theft is taking place.
These platforms all offer different rates to buy ETH. The choice of platform to engage in transactions related to cryptocurrency depend on several factors - how long you plan to store it (paper wallets for long storage, vs software wallets for quick access, etc), whether you plan to trade it, etc.
Post purchase, the Ethereum coin can be stored in an Ethereum wallet, similar to Bitcoin, which is encrypted with a key. This key, however, is very important - the wallet can’t be recovered if the key is lost!
Various kinds of wallets are available and provide different types of securities. The wisest way to ensure that the ETH bought is kept safe is to not store too much in one place - make sure the coins are stashed in different wallets, and they all do not have the same key.
CoinSwitch, the largest cryptocurrency exchange in particular, is an ideal way to source Ethereum. It offers a comparison of a variety of exchange rates, allowing the trader to choose the best possible one to convert their already existing cryptocurrencies to Ether. Not only this, it is one of the safer exchange platforms, as it allows storage of your tokens in your own Ether wallet, instead of storing it as an exchange, preventing loss or unavailability of cryptocurrencies should anything happen to the website.
ETH currently has a circulating supply of 99,776,369 tokens. There is no hard cap on the number of Ethereum coin supply as of now, nor is the minting rate fixed. It all depends on the resources the miners devote to the Ethereum blockchain.
#4 - What is the Future of Ethereum?
Ethereum has reached an all time high of $1400 in January 2018. Reddit Co-Founder, Alexis Ohanian, according to The Coin Telegraph, stated that Ethereum value should soon reach $1,500.
ETH began trading in August 2015 at a price of $2.83. In just 2 years, it was trading at upwards of $800 in the month of December. That’s a return of 285 times! The price has fluctuated during its journey, recapped in the table below:
Ethereum’s open, blockchain technology, in addition to being used for contracts, banks, and various other transactions not involving cryptocurrencies has made it an attractive tool. It has a high potential to be a success in the future, making it probable that it will be the largest cryptocurrency in the world, fueled by folks who want to invest in Ethereum.
Ethereum’s bright future can easily be validated by looking at the corporations it is backed by. Big names in the industry, such as J.P. Morgan Chase, Microsoft and Intel are behind the Enterprise Ethereum Alliance (EEA) to create a decentralized network, according to Fortune
#5 - How is Ethereum Different?
Bitcoin is based simply on peer-to-peer transactions. Ethereum, however, is a whole network, built on the decentralized Blockchain technology, allowing it to be used for purposes other than crypto-trading.
Bitcoin creates an alternate to cash, and can only be used for transactional purposes, but Ether, the BTC equivalent in the Ethereum system, is used not only as a currency, but also used to fuel various contracts and applications built on Ethereum.
Unlike Ripple, which is created to complement financial institutions, the Ethereum system is excellent for usage in businesses and corporations. It can be used to create DApps and Smart Contracts, both of which ensure that the digital information cannot be tampered with and that the information is available to everyone. The Smart Contract also ensures that terms are carried out without error.
#6 - Should you Invest in Ethereum?
While Ethereum is built for great things, the question arises - is it safe to invest in Ethereum? The technology is still in its developmental stages, and the prices fluctuate quite a bit.
Ethereum is backed by many big names in the financial and technological world. The companies are willing to invest in Ethereum (and by extension, Ether) due to its wide application in contractual and business fields. It currently seems to be on the rise, so investing in Ethereum right now would result in good gains for the future.
Of course, Ether can also be used simply as a digital currency, and be used to perform transactions. Ether can be used to buy Bitcoin and other cryptocurrencies, and even if one does not employ the use of the non-financial aspects of Ethereum, simply trading with ETH cryptocurrency is also a good investment.
As a number of companies and applications are soon expected to use Ethereum, they will accept the ETH token as a form of payment, much like in a way BTC is used.
One might argue that Ethereum’s technology is still young. That is true, and even though a lot of companies are backing Ethereum, it has still not come into regular circulation. However, the ETH token is quite popular amongst cryptocurrency traders, and Ethereum technology is being built and developed constantly to be able to customize it.