What is Ethereum (ETH) ? Smart Contracts & Decentralized Applications

Started in 2014 by Vitalik Buterin and launched in 2015, Ethereum is an open-source cryptocurrency blockchain that is decentralized. It brings the functionality of Smart Contract. In simple terms, it is an open-source computing platform and operating system. It uses Ether as its default cryptocurrency of the platform.

Any developer can build and publish applications on this blockchain. It comes with a programming language (Solidity) and a platform. Ether can be seen as the blood that circulates around the Ethereum body. Ether, like any other tradable cryptocurrency, can be traded in the cryptocurrency market and the foreign exchange market, the Forex. It is also used to run applications and monetize work on the Ethereum platform.

Cryptocurrency Ethereum

What is Ethereum : Smart Contracts

As a platform, it enables Smart Contracts and Decentralized Applications to be built and run with no fraud neither control nor interference from third parties. With Ether, Smart Contracts automatically perform transactions and any other actions agreed upon by both parties. Therefore users can conduct safe and reliable transactions with each other.

Smart Contract on Ethereum

Smart Contracts are self-executing, they are letter strict meaning they follow command. When asked to make a certain payment they don’t do anything else but that. They are immutable where even the author cannot change it. They form complex contracts which are difficult to secure.  

What is Ethereum Classic

Like many start-up businesses, Ethereum has had a fair share of malicious activities when $50 million worth of funds were stolen. These are funds which had been raised on the platform in 2016. It all came about when Ethereum developed a DAO (Decentralised Autonomous Organisation) which allowed users to deposit money and get returns based on investments DAO made.

The decisions on DAO were crowd sourced and decentralised. Someone found a loophole and stole money from the system. This led to the splitting and advancement of Ethereum into two separate blockchains, Ethereum Classic which is the original one and Ethereum. Once beaten twice shy, the new one was resistant against possible malware attacks.

Mining & Staking

If anyone considering making money with Ethereum, they can. Just like Bitcoin, anyone can make money through mining. Mining is a process where computer operators compete to solve a computational problem. A successful extract adds a new block to the blockchain. These blocks enable the functionality of decentralized applications possible. Miners get rewarded with Ether tokens. 

The essense of crypto currency

Ethereum can be staked to make a profit. Staking means to be a validator to verify transactions by putting your Ether as a guarantee called collateral. As a validator, you store data, process transactions and adding new blocks to the blockchain. As users pay to initiate actions in the blockchain one earns a small percentage of the fees paid in Ether.

Holding & Trading

Buying and holding is a popular way to make profit trading any cryptocurrency. One can buy Ethereum when it is undervalued. They will watch the market and wait until the value has increased before they sell it. Buying and holding may take months or years based on one’s desire and profit goals.  For long-term investment in Ethereum, it is advisable that one store their tokens on an off-broker wallet. This wallet is more secure than a brokerage account.

Earlier mentioned, Ethereum is tradable in the cryptocurrency market and in the foreign exchange market. It is the second-largest cryptocurrency after Bitcoin. One will have to choose a broker, which supports buying and selling it but will have to invest time to study the market before going live trading.

To trade Ethereum, you can use the best free trading platform for advanced Smart Trading & Copy Trading. And it is 100% free thanks to the Binance Broker Program.

It is worth noting that, Ethereum is a speculative investment, one may lose their money. People who invest in it should invest money that they can comfortable lose. Ethereum is advantageous with the fact that it is liquid, has lower inflation risk. Being new, it may have unpredictable swings in prices and volatility which can bring gains in return.

We hope you liked this article about Ethereum. You can share it and post a comment. We will answer to all question.

To learn more about the main cryptocurrencies, you can read our other articles: Bitcoin, Binance Coin, Polkadot, Cardano.

This article is not investment advice. Do your own research before investing in the cryptocurrency market.

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