Ethereum for Dummies: Basics of the Platform

Ethereum, you would have heard about it by now. If not, then I guess you have been out of touch with the cryptocurrency industry for a while or you are really new to it. Well, don’t worry we will get you up to speed in this article.

What is Ethereum?

It is a relatively new cryptocurrency that is making waves in the cryptocurrency ecosystem. Unlike bitcoin, it is designed to be a smart contract platform based on the blockchain technology.

The crypto tokens on this platform are called ether. Ether is designed to be used for making payments for hosting and accessing applications on the Ethereum blockchain.

What are Smart Contracts?

Smart contracts are programmable blockchain-based applications/transactions. These smart contracts can be programmed to execute the transactions automatically once the preprogrammed conditions are met. These smart contracts can be used for a wide range of applications including trade settlements, smart crypto-will and more.

Ethereum Mining

If you know about bitcoin already, then mining is not a new concept for you. Otherwise, Mining is a process where people who are part of the Ethereum network contribute their processing power to maintain the network. Being a vast, decentralized network, there will be thousands of miners who contribute the processing power to run the applications on the network. The processing power will also be used to create new blocks on the blockchain and process the ether transactions happening over the network as well. The miners will receive freshly minted crypto-tokens (ether) as a reward for their contribution to the network.

Ethereum Trading

Like any other cryptocurrency, ether has a value and they can be bought or sold for an equivalent value of other cryptocurrencies Or Fiat.
There are many cryptocurrency exchanges that allow people to exchange Ethereum for other currencies and vice versa.

Ether, like other cryptocurrencies, is dependent on demand and supply, making it volatile. The volatility of ether value makes it an ideal asset for trading. Ether can be hedged against other crypto and Fiat currencies to make gain profits as the price fluctuates.

Ethereum has exhibited good growth in its value in the recent months. The increase in value can be attributed to various factors like the developments happening on the platform, it’s usage in different projects, future potential and increased trading activity. The surge in value has proven ether to be a promising tradable asset. This has created a demand on many bitcoin trading platforms. Forcing them to include it along with bitcoin and other cryptocurrencies.

Resources

Ethereum wallets

  • Kryptokit
  • MyEtherWallet
  • EtherWall

Ethereum Exchanges and Trading Platforms

  • Bitfinex
  • Kraken
  • Poloniex
  • HitBTC
  • Bleutrade
  • Bter
  • Uphold (starting soon)

Ethereum Projects

There are many companies that are working on implementing Ethereum based projects. The most important ones include the Blockchain Banking Consortium project carried out by R3CEV along with 43 international banking institutions. the project involves creating a blockchain network connecting the partner banks to enable fund transfer over blockchain.

Another project, taken up by Digital Asset Holdings Inc. is for the Australian Securities Exchange (ASX), which is working on replacing their old trade settlement system with a blockchain based system.

Ethereum is already being implemented in live projects, while the platform is still in the development stage, giving a brief insight into the potential large scale use of the platform in near future. Hope this gives you a brief idea about the platform. If you want to know in-depth, please visit www.ethereum.org.