Big question about what is ETH, along with the viral photo of NFT Ghozali some time ago in Indonesia. Yes, ETH or Ethereum is a cryptocurrency similar to Bitcoin. Where the digital currency can be exchanged, you know. For example, it can be used for miner transaction fees on the Ethereum network.
In a world filled with digital currencies and rapidly evolving blockchain technology, ETH, short for Ethereum, stands as an icon and is one of the most amazing innovations in modern financial history. Alongside Bitcoin, Ethereum has opened the door to a plethora of applications and uses of blockchain technology that are far more extensive.
Who doesn't know about Ethereum (for cryptocurrency players). In this article, we will dig deeper into what Ethereum is, uncovering its secrets and its incredible potential. But, did you know that Ethereum is not a cryptocurrency?
What Is Ethereum?
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| What is Ethereum? |
Ethereum is a software platform for programmers to build applications using blockchain technology. Ethereum is a blockchain platform with smart contract functionality. Ethereum has functions like a virtual machine that can run peer-to-peer smart contracts with the cryptocurrency Ether. Ethereum is a big project started by Vitalik Buterin in 2013.
Ethereum is the second largest cryptocurrency in the world after Bitcoin, and one of the busiest blockchains. This is because Ethereum is the pioneer of the smart contract platform, which is the basis for building various decentralized applications (dApps) as well as Web3. If you want to know more about what Ethereum is, read more about it in this article.
The ETH code stands for Ether, the native cryptocurrency used on the Ethereum network. Ether is not just a digital asset for investment, but also the “fuel” that powers the entire Ethereum ecosystem. On the Ethereum network, ETH is used for:
Transaction Fees (Gas Fees): Every time you send a transaction or run an application on Ethereum, you need to pay gas fees in ETH. This fee ensures that the transaction is processed by the network.
- Smart Contracts and dApps: Ether is needed to run automated programs (smart contracts) and decentralized applications (dApps) on the network.
- Staking: In the proof of stake mechanism, ETH is used for staking, which is storing a certain amount of Ether to help secure the network and earn rewards
How Does Ethereum (ETH) Work?
While sharing some basic principles with Bitcoin, Ethereum introduces unique features and a different approach, particularly in its consensus mechanism. Unlike Bitcoin’s pure Proof of Work (PoW) system, Ethereum has transitioned to a Proof of Stake (PoS) model with the Ethereum 2.0 update. This shift aims to improve the efficiency and scalability of the network.
Additionally, Ethereum incorporates elements of peer-to-peer networks to foster a truly decentralized environment, ideal for developing decentralized applications (DApps).
1. Ethereum: Platform vs. Cryptocurrency
A common misconception is to equate Ethereum with a cryptocurrency. In reality, Ethereum is a broad blockchain platform, and Ether (ETH) is its native cryptocurrency. Ether plays a vital role in the ecosystem, primarily used to reward validators for carrying out operations and securing the network, especially in the context of computing the Ethereum Virtual Machine (EVM).
2. Ethereum Virtual Machine (EVM): The Heart of Ethereum
The heart of Ethereum’s functionality lies in the Ethereum Virtual Machine (EVM). The EVM is embedded in every node on the Ethereum network and plays a vital role in simplifying the development of decentralized applications. They serve as a robust and secure runtime environment for executing smart contracts.
Every node in the Ethereum network operates an instance of the EVM, enabling decentralized consensus on code execution. This setup ensures that all nodes in the network can execute the same instructions independently and reliably, facilitating a trustless ecosystem where code can be executed without centralized control.
The EVM is a Turing-complete system, meaning it has the ability to perform a wide range of computational operations, similar to languages like JavaScript. This Turing-completeness enables the creation and execution of complex smart contracts and decentralized applications.
3. Support for Multiple Programming Languages
One of the standout features of the EVM is its compatibility with a wide range of programming languages. Developers can write smart contracts and DApps using popular languages like C++, Java, JavaScript, Python, and Ruby. Ethereum also introduced its own unique programming language, Solidity, which is specifically designed for writing smart contracts. Solidity is object-oriented and high-level, tailored to the nuances of the Ethereum blockchain. Regardless of the language used, the code is ultimately compiled into EVM bytecode, making it executable on the Ethereum network.
Ethereum’s innovative approach, especially with its evolving consensus mechanism and the flexibility of EVM, sets it apart from other blockchain platforms. It is not just a cryptocurrency but a comprehensive platform that enables a decentralized digital economy and a wide range of applications.
What is the difference between Bitcoin and Ethereum?
Ethereum and Bitcoin are almost the same when viewed from cryptocurrency aspects, such as being decentralized and using blockchain technology. However, in reality they have different goals. Ethereum was created to help users create decentralized applications on the Ethereum network.
However, Ethereum uses a proof-of-work algorithm that supports decentralized mining by individual miners. In essence, adding to Ethereum is much easier than Bitcoin. Ethereum and Bitcoin are almost the same when viewed from the cryptocurrency aspect, such as being decentralized and using blockchain technology. However, in reality they have different purposes.
- Bitcoin is used to be an online payment
- Ethereum was created to help users create decentralized applications on the Ethereum network.
Bitcoin mining requires an incredible amount of computation and you also have to remember that electricity is very expensive in Indonesia compared to China or Russia. However, Ethereum uses a proof-of-work algorithm that supports decentralized mining by each miner. In essence, adding Ethereum is much easier than Bitcoin.
Who created Ethereum?
Vitalik Buterin is the one who came up with the idea for Ethereum. In 2013, he wrote a whitepaper on the genius idea. He also sent it to some of his friends and his friends shared it with many people. Keep in mind before writing about Ethereum, Vitalik loves the idea of Bitcoin and is active on Bitcoin forums. He is also paid to write articles about Bitcoin. About 30 people messaged Vitalik to discuss the concept.
The project was announced to the public in January 2014, with a core team consisting of Vitalik Buterin, Anthony Dilorio, Charles Hskinson, Gavin Wood, Mihai Alise and Joe Lubin. Vitalik also introduced Ethereum at the Bitcoin conference in Miami. The idea was warmly welcomed by many. A few months later the core team did a crowdsale/fundraising for Ether for more in-depth developments.
Just like Bitcoin (BTC), Ethereum (ETH) is a decentralized system. This means that no person or company can control Ethereum. A centralized system has been used since ancient times. However, history has proven, sooner or later, that something that is centralized will be destroyed if it is not maintained properly.
On the other hand, something decentralized will still run automatically without a leader. Decentralized applications run on computers using the application all over the world, so these applications will never go offline. Something confidential such as KTP numbers, home addresses and names are still stored on each computer.
Is Ethereum a cryptocurrency?
Come on, let's study deeper. Ethereum is a software platform that aims to create a decentralized internet as well as decentralized applications. However, the system also requires a 'currency' to run the application. The 'currency' is Ether.
Ether is a digital asset that does not require a third party to process payments. It not only operates as digital money but also serves as 'gasoline' to run decentralized applications on the network. If the user wants to change or add something to the application, he will need to pay a fee for the Ethereum network to accept the changes.
1. Smart contracts
Projects built using Ethereum must use smart contracts. A smart contract is a digital agreement that is similar to the agreement you sign at a notary. Example: party A wants to pay rent for a house on the 10th to party B, on the D day, the Ethereum network automatically transfers the payment to party B. This is a very simple example.
If you are a programmer, smart contracts can be compared to if-then statements. In layman's terms, if this happens, work on it. Smart Contract is one avenue for future agreements. With a smart contract, you no longer need a notary or lawyer.
This smart contract is executed directly by the computer, the error is very small. However, smart contracts are written by humans. If there is a problem in writing, then the execution will also be problematic.
2. ICOs
Several years ago, Ethereum was well known for its Initial Public Offering (ICO). 80% of ICOs use the Ethereum network rather than Bitcoin or other altcoins. Now, many altcoins like Wave, Stellar, Tron and Eos will start their coin network based ICO.
Newcomers will stick with the Ethereum network as their network is stable. The Ethereum network makes it easy for businesses to build a decentralized business. If you check the whitepaper of an ICO, they will write with ERC-20 tokens, meaning that the ICO uses the Ethereum network.
Why use the Ethereum network? At that time, the Ethereum network was the only crypto that could build decentralized applications. Not only that, Ethereum is faster and cheaper than Bitcoin or Litecoin.
3. Far from perfection
Ethereum is not perfect because they are still in their 'infant' stage. I'm only 4 years old on this project. We can compare before 1GB MMC(memory card) was very expensive, around 1-2 million, now, the same thing is much cheaper. Same with Ethereum or you could say all cryptocurrencies and Blockchain technology.
People are still 'groping around' this new technology and it is certain that the technology will definitely be as common as smartphones.
Parity Wallet Freeze- Parity wallet crashed and $280 million worth of Ethereum was frozen. ETH here is not lost but cannot be used. DAO Hack- a hacker steals ETH due to a faulty code in the program. The hacker managed to steal $55 million worth of ETH into a private wallet.
4. Future
The future for the Ethereum network is very ugly. In fact, the price of ETH has fallen by 80% from 2018. The Ethereum team has been trying to fix issues such as scalability but to no avail. Will ETH disappear from the crypto market? no one knows, but time will tell.
How to buy Ethereum?
For a beginner investor, ethereum is one of the coins that many people are looking for. Are you one of them? or are you still confused about how to buy ethereum? Follow these steps to start investing in ethereum.
- Compare Crypto Exchanges – Browse the list of top cryptocurrency exchanges that offer this token (ETH) for purchase.
- 2.Create an account – Complete the registration process by verifying your email address and identity to access the platform.
- 3.Make a Deposit – Fund your account using a Debit Card, Credit Card, Bank Transfer, or Bitcoin.
- Buy Tokens – Use the funds you deposit to easily purchase tokens (ETH).
We list the top 6 exchanges that offer the ability to buy Ethereum (ETH) cryptocurrency with a credit card or debit card.
1. Uphold
A top exchange in the United States, Uphold is an experienced and highly innovative trading platform that should be able to meet your needs for trading a number of cryptocurrencies, including Ethereum (ETH). Beyond the ease of use and innovative features within the trading platform, what stands out about Uphold is the credibility it has earned in the industry.
Uphold offers a very intuitive trading experience on both desktop and mobile apps. The trading interface is fully customizable to the assets you trade most often and is very easy to navigate while still having a modern feel on both desktop and mobile. This is a very popular and suitable choice, especially for new traders.
In addition to looking good, Uphold’s trading platform allows you to place trades with great ease. With just a few clicks, you can place trades directly from your deposit method without having to wait for funds to be credited to your account. This one-step ordering is another innovation from a company that prides itself on the usability of its platform. Uphold also provides the ability to execute limit orders.
2. Coinbase
Coinbase (COINS -10.2%), founded in 2012, is a leading platform for buying, selling, and managing over 250 cryptocurrencies. As a Nasdaq-listed company, Coinbase offers transparency and trust to users. The platform supports advanced trading tools, no trading fees for Coinbase One members, and a rewards program that allows users to earn up to $400. With $226 billion traded each quarter, Coinbase is a major player in the global crypto market.
Coinbase operates in over 100 countries, including Australia, Canada, France, Germany, the Netherlands, Singapore, the United Kingdom, and the United States (excluding Hawaii). With top-tier security, cold storage, and educational tools, it is a trusted platform for both beginners and advanced traders. Easily accessible, secure, and user-friendly, Coinbase is a global leader in crypto management.
3. Kraken
Founded in 2011, Kraken is one of the most trusted names in the cryptocurrency industry. The company has over 9,000,000 users and a quarterly trading volume of over $207 billion. From humble beginnings, Kraken now offers over 200 digital assets, including Ethereum (ETH). For more sophisticated investors, Kraken also offers futures and margin trading.
Kraken continues to grow its platform and commitment to the industry by becoming one of the first exchanges to offer the opportunity to purchase new tokens. Kraken provides trading access in over 190 countries, including Australia, Canada, Europe, and the United States (excluding New York and Washington states).
4. Binance
Binance is one of the largest and most well-known cryptocurrency exchanges in the world. The benefits of buying Ethereum (ETH) here include lower fees than competing exchanges and increased liquidity, allowing you to buy and sell quickly to take advantage of market-moving news.
Use Discount Code: EE59L0QP for 10% cashback on all trading fees. This exchange is best for investors residing in Australia, Singapore, the UK, and internationally. Canadians and US residents are prohibited.
5. KuCoin
KuCoin is a well-known name in the industry and one of the most competitive when it comes to fees and trading costs. The exchange has grown exponentially since it initially offered only crypto-to-crypto trading. It now offers a variety of services, including P2P exchange capabilities and credit or debit card purchases.
KuCoin currently offers cryptocurrency trading for Ethereum (ETH) and over 300 other popular tokens. KuCoin is often the first to offer buying opportunities for new tokens.
6. Gate.io
Founded in 2013, Gate.io has grown into a reputable trading platform. While not the most popular exchange, it provides an easy-to-use interface for beginners while maintaining robust and advanced charting for a variety of skill levels – including technical traders. The exchange offers a wide range of altcoins, including Ethereum (ETH), and is often the first to add new tokens. Notably, Gate.io maintains a strong stance against any form of market manipulation.
Conclusion
ETH can be used as digital money or to make various transactions on the Ethereum blockchain. Ethereum is one of the most widely used blockchains to create decentralized applications, because more programs can be written on the Ethereum blockchain compared to Bitcoin.
With its function as a gas fee that must be paid to perform computations on various applications built on Ethereum, ETH is the second largest cryptocurrency after Bitcoin in terms of market value.