Ethereum (ETH): 5 basic points you should know before thinking about investing in ETH

Inspired by the Bitcoin blockchain, but nevertheless very different from its philosophy, Ethereum is a programmable and open source blockchain with its own cryptocurrency: Ether (ETH). It is currently the second largest cryptocurrency in the world in terms of capitalization, representing almost 20% of the market.

Ethereum (ETH): the essentials to know

1 – What is Ethereum (ETH) crypto?

  • Basic Principles: Created in 2015 by Vitalik Buterin, a young Russian-Canadian programmer, the Ethereum platform is a decentralized virtual network that allows the development of decentralized applications, called “Dapps. Like Bitcoin, this protocol has own token, called Ether. When talking about cryptocurrency, the so-called Ethereum actually refers to Ether (ETH).
  • Works: Unlike Bitcoin, which is focused only on peer-to-peer payments, Ethereum allows thousands of developers to build applications (more than 3000 today) in various fields: finance, real estate, entertainment, etc. There is no need for a central authority to operate these Dapps, which makes it possible to do without the giants who reign supreme in servers, and especially GAFAM (Google, Apple, Facebook, Amazon, Microsoft).

2 – The project and the blockchain behind Ethereum

  • Project: Like Bitcoin, Ether exists as part of an autonomous peer-to-peer financial system, free from oligarchic control. Of all the cryptocurrencies, Ether seems the most likely to compete with Bitcoin as a major cryptocurrency. However, there remains one major difference: their emissions. In total, there are 21 million tokens for Bitcoin, while for Ether, there is no limit.
  • Blockchain: To ensure total decentralization, Ethereum uses a virtual machine (Ethereum Virtual Machine or EVM) that runs on each of the existing nodes within the network. Its unit of account, Ether, aims to pay validators, also known as miners, who guarantee the validity of the chain. Ether is also used to pay Dapps fees

3 – Ethereum (ETH) analysis and opinion

The +:

  • Ethereum is open source, which means that it is possible for programmers to create various decentralized applications.
  • It is one of the most active blockchains, with a more active ecosystem than Bitcoin, and is constantly changing.
  • Similar transactions are processed faster on the Ethereum network than on the Bitcoin network (15 seconds, compared to more than 10 minutes).

Also read How to apply the DCA method to recurring purchases of cryptocurrencies

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  • Security vulnerabilities have always put the network at risk, despite recent stronger updates that have strengthened the network.
  • First-generation smart contracts suffer from a real scalability problem.
  • Planned for several years, Ethereum’s transition to “proof of stake” has been accumulating delays. It is expected this summer.
  • It is impossible to change a Dapps, or smart contract, with a mistake.

4 – How to earn or mine Ethereum (ETH)?

There are different ways to get Ethereum cryptocurrency. In addition to direct purchases through online brokers (eToro, Binance, Coinbase, Kraken and others), the provision of computing power makes it possible to mine cryptocurrency and get a reward in the form of ETH.

It is possible to mine solo, or through a mining pool, by sharing the rewards obtained. The Ethermine Mining platform is renowned as one of the most intuitive, efficient and easy to use for ETH mining. In the last few months, the broker Binance also offers mining pools at a reduced fee (0.5%).

5 – Useful resources

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