Ethereum 101

Ethereum 101

By: William McCormick - Posted in:
Ethereum coin rising out of the cryptocurrency rubble

How Ethereum Became a Crypto Superpower!

WealthHunters has explored the basics of cryptocurrency and blockchain technology. With those concepts now under our belt, it’s time to learn about Ethereum and how it offers more than Bitcoin. In this article, you will learn the history of Ethereum, how Vitalik Buterin created the project, and how to buy Ethereum to begin trading.

For starters, let’s begin with the most obvious question.

What is Ethereum?

Ethereum is a decentralized platform that uses blockchain and smart contracts to give its users a network to create new applications and exchange cryptocurrency without third-party interference. Vitalik Buterin had the vision for the project after he became involved in cryptocurrency in 2011.

Ethereum is an open-sourced software platform that allows developers to create their own decentralized applications. The system is often associated with Bitcoin because of its popularity in the cryptocurrency market. However, the two assets are quite different technically from one another. Bitcoin uses blockchain technology for peer-to-peer electronic cash trading and utilizes its network to track ownership of its own digital currency. Ethereum’s system focuses on the programming code of users and using smart contracts to trade tokens with a third party.

Vitalik Buterin created the “Ether” to be the cryptocurrency for the network. In the crypto market, Ether is the second most valuable asset behind only Bitcoin. Ethereum’s network requires a certain amount of “gas” for every transaction and Ether represents that “gas.” An Ether is used just like Bitcoin tokens, but the difference is the use of smart contracts to offer security and no downtime for transactions. Through the terms of a smart contract, payment can’t be made until both sides have upheld their terms of the deal and it’s near impossible to cheat on the deal.

Ethereum to Replace Bitcoin?

Many experts believe that Ethereum will eventually surpass Bitcoin as the standard for the crypto market because of the advantages the network has over Bitcoin. For instance, the latter uses a “proof of work” system to create new coins through mining. Ethereum has begun transitioning to a “proof of stake” system that uses less electricity and energy to mine new tokens. Since Buterin created the network after Bitcoin’s debut, he was able to take advantage of the weaknesses in the Bitcoin network and offer Ethereum’s users a lot more than just trading and transferring money and crypto.

Developers creating new apps on the platform will continue to innovate and improve Ethereum’s network. It’s hard to predict how the twists and turns of innovation will continue to improve blockchain tech. Developers are still exploring the capabilities of the new technology. All it will take is the right person with the right vision to create something new.

History of Ethereum and Vitalik Buterin:

As a young programmer, Buterin co-founded Bitcoin Magazine and became fascinated with blockchain technology in 2011. He realized that Bitcoin lacked a general scripting language for developing apps. Vitalik Buterin spent the next two years developing his own platform. In January 2014, a team was in place and the history of Ethereum began.

The original white paper written by Buterin outlined the purpose of the project was to “provide a blockchain with a built-in fully fledged Turing-complete programming language that could be used to create “contracts” that can be used to encode arbitrary state transition functions.” Vitalik Buterin’s platform became known as the Ethereum Virtual Machine (EVM).  It was groundbreaking to create a huge variety of decentralized applications on a single platform.  

In early 2014, a Swiss technology company run by Joseph Lubin began developing the platform with Vitalik Buterin and his team. “Ethereum Switzerland GmbH developed the first software for the platform and launched a pre-sale for Ether in July 2014. Within a month, $18 million was raised through a major crowdsourcing campaign selling Ether tokens to investors. Almost a year later, the first live release of the Buterin’s platform called “Frontier” launched to high praise for its technological innovations.

However, experts were still skeptical of Ethereum’s stability and security since the technology was reaching new and unknown heights. In March 2016, the history of Ethereum changed directions when “Homestead” was released to silence those critics. It was an upgrade that focused on gas pricing, improving its security and transaction processing. “Homestead was the answer to the concerns and the history of Ethereum continued to grow in a positive direction. The company hasn’t looked back since. 

Ethereum Price History

Following the launch of Frontier, the platform grew rapidly and became stable with the updated “Homestead” edition in 2016. At the time, Ethereum price history was at $5,100 active nodes, which was comparable to Bitcoin’s $6,000. The company earned major attention in May after the Decentralized Autonomous Organization raised $150 million. However, Ethereum price history hit a significant speed bump afterward.

Hackers stole $50 million in Ether from the platform in June 2016. The event not only changed Ethereum price history but created debate in the early cryptocurrency market.  The security concerns and other problems forced Vitalik Buterin to split the network into two different blockchains: Ethereum (ETH) and Ethereum Classic (ETC). In order to separate the blockchains, (ETH) argued for conflict resolution, decentralized decision-making, and extra-protocol. (ETC) establish code as law and argued for blockchain immutability.

By the end of 2014, Ethereum had improved security and boosted its security to thwart spam attacks and hacking. A couple of months later, the asset’s daily volume was $450 million. Shortly after that, experts’ concerns about security dwindled and the platform began to grow quickly. The price of Ether grew by 13,000 percent by early 2017. (ETH) had rallied above $400 by June 2017. That demonstrated a 5001 percent rise in value in six months.

The current market cap for the platform is over $22 million with the second highest volume in the entire crypto market. Many experts believe Ethereum will surpass Bitcoin’s network once crypto trading becomes more stabilized in the years to come. Ethereum’s advanced network just offers more than Bitcoin in the current market. As of this writing, hundreds of applications are using the platform to create new projects.

How to Buy Ethereum:

There can be some questions about how to buy Ethereum, but the network is available for anyone as long as they own Ether. The easiest way to buy Ether is through an exchange. New investors should consider Coinbase and Binance to be the best options because both exchanges are available in most countries. As a result, the entire registration process will be easier.

The process starts with choosing an exchange and creating an account. Most exchanges are free or require a small deposit. A proof of address or photo identification is needed for verification before the next step.

After your account is verified, you need a payment method. Most exchanges accept the US Dollar, Euros, and other major fiat currencies. Users can also buy Ether using SEPA, PayPal, and other methods depending on the exchange. Investors can create their own Ether wallet for security, but that’s the last step to learn how to buy Ethereum. Now, you have to secure it.

If you have $20 in a jar somewhere in your home, it’s not overly important to secure it since it’s such a small amount. However, you’re going to want to secure your Ether if you buy a large amount. Ethereum uses asymmetric cryptography to create “keys,” or a large string of numbers to act as a password. A wallet is important and most traders choose MyEtherWallet 
because it’s designed for storing Ether. There are several wallets to choose from on the market. The best way to choose the right one for you is to do your research.

Have Questions About Ethereum? Let’s Discover The Answer!

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