Ethereum or Ether is the second largest cryptocurrency, second to Bitcoin. It provides interesting possibilities to the cryptocurrency community of users.
Ever since its creation in 2015, the value of Ethereum’s currency, Ether, has soared to as much as 2,300 %. Today, as the time of this writing one Ether has a value close to $300.
Ethereum is the second largest cryptocurrency next to Bitcoin. Ethereum is the technology that runs Ether. Similar to Bitcoin, Ethereum is a payment network that is decentralized, is not under the control of any central bank, and allows payments to be sent through the Internet anonymously. It does not require the use of a third party or a bank to transact payments.
All transactions within the Ethereum blockchain is kept in a decentralized ledger, so all users in the network can monitor and see it.
As a cryptocurrency second to Bitcoin, it is common for these two digital currencies to be compared. Most users claim that Ethereum has more uses than Bitcoin.
Both Ethereum and Bitcoin make use of the blockchain and certain protocols. The blockchain (downloadable) is the main technology behind all cryptocurrencies. It is a ledger that monitors all transactions. While these ledgers are public and accessible to everyone within the network, the participating individuals remain anonymous. The blockchain verifies all transactions.
Protocols are the rules parties need to adhere. Aside from the blockchain, there are a lot of different protocols within a cryptocurrency.
Bitcoin in general is a digital value store. It is a cryptocurrency protocol on top of blockchain.
Ethereum is a platform. It runs smart contracts on top of the blockchain. This platform allows a programming language to create your transactions (Turing complete). Similar to Bitcoin, every transaction has a fee.
Bitcoin is an electronic peer-to-peer cash that can be used for online payments of good and services through the blockchain technology. Ethereum on the other hand runs the programming code. Bitcoin miners mine for Bitcoins, and Ethereum miners mine for Ether.
The Bitcoin appeal lies in the fact that money within the network is not controlled by any party. Ethereum has the same appeal plus the fact that a lot of things can be done to allow the network to run.
Similar to other cryptocurrencies, Ethereum transactions remain anonymous. Every transaction is recorded in a ledger that is decentralized; thus no fees are required to be paid to banks or any middlemen. Transactions are secure and safe from theft and fraud too.
There are online stores that accept Ether (the Ethereum currency) as payment for goods and services. These currencies can also be allowed to increase in value while being stored in online wallets.
Before you can mine, buy, or sell Ether, you need to have an online wallet. Storing Ether in your online wallet is similar to depositing money in a bank. With your online wallet, you can store, send, and receive Ether.
Ethereum features a decentralized platform that is free of any middleman. How can this benefit its network of users?
Two of the most popular Ethereum cryptocurrency exchanges are CoinMama and Bitstamp. Here is some deeper detail on both exchanges:
CoinMama is a reliable veteran cryptocurrency exchange platform, allowing anyone who visits to purchase Ethereum or Bitcoin using the convenience of a credit card or cash via money transfer. CoinMama’s platform is a good choice for those who wish to make immediate, simple purchases of Ethereum or Bitcoin using their flat currency. Although having worldwide availability, CoinMama may have limited functionality in some nations and can be employed in English, French, German, Russian, and Italian.
Bitstamp’s Ethereum cryptocurrency exchange is based in the European Union and was founded in 2011. One of the earliest exchanges, Bitstamp was one of the first platforms in existence, and for this reason, has built up a diehard customer base. They are very well known in the Ethereum trading community as one of the highest security, safest trading platforms.
Bitstamp offers security features that are unheard of with some of the smaller fly-by-night cryptocurrency exchanges, making it one of the ideal exchanges for purchase and sale of Ethereum. Some of these security features include multi-signature technologies, two-factor authentication, and cold storage of keys that are fully insured, similar to Coinbase.
Exchanges are to cryptocurrencies, while stock exchanges are to real currencies and commodities. Register with an online exchange so you can easily buy and sell Ether. Being new, these exchanges are not controlled by any laws and regulations similar to the stock market.
Ethereum is a platform, and its currency is Ether. Just like Bitcoin, you can acquire Ether through buying, mining, and trading. Ether can also be used to pay for online goods and services. Of course it is important that you have an online wallet.
The easiest way to buy Ether is through cash, wire transfer, or through your credit card. You can buy Ether in any of the Bitcoin exchanges that also carry Ethereum. Here is how to do it:
You can also buy Ether using your Bitcoins by logging in to an “exchange.” If you still do not have Bitcoins, buy Bitcoins by depositing cash in your online wallet. You can buy goods and services online with your Bitcoins including other cryptocurrencies such as Ether.
Another popular way of “buying” Ether is to exchange your Bitcoins for Ether. There are exchanges you can go to for this buying method. You send your Bitcoin, and it will be converted into Ether and sent to your Ether online wallet.
Ethereum is the second largest cryptocurrency, the first being Bitcoin. Less than 2 years after it was introduced, it has soared in popularity. From $2.80, its value has soared to over $200. A lot of people are saying that Ether could be the next Bitcoin in terms of value and popularity.
If you want to sell Ether stored in your wallet, you can choose from any of the exchanges to consummate the sale.
Selling Ethereum uses the same process as buying any cryptocurrency. You go through an exchange and place an ad for the Ether that you are selling. The exchange will transact the sale and, if you wish, can transfer the proceeds of the sale into your bank account.
Ethereum provides a lot interesting possibilities. Even the United Nations has signified its intension to make use of Ethereum in transferring funds to refugees from its World Food Program. This system will allow the UN to save money because they will no longer have to pay fees to middlemen. The system is becoming more efficient too. Since Ether is available worldwide, the sending of funds to refugees will not be a problem.
Image via the Ethereum Facebook page
How Ethereum works image via Ethereum