Bitcoin may be the number one cryptocurrency in the market, but there is a fast-rising and promising crypto coin that can give BTC a run for its money. Rated as the top BTC alternative, Ethereum ranks as the second most liquid and large-scale digital asset by market capitalization.
If you are looking to expand your crypto portfolio, the Ethereum cryptocurrency is a great option for you. It does not only have a special token called Ether (ETH) you can use as currency but also a powerful network that gave way to unique crypto tech such as smart contracts.
Ethereum has a strong base from both its developers and community. Thus, ETC has a greater chance to become a stable virtual asset that can grow in value over time. It is not too late to take part in the action of the Ethereum cryptocurrency trade.
Build your ETC holdings with the help of BTC Post. Stay up to date with the latest Ethereum news, investing tips, market trends and more here! Learn all you need to know about the cryptocurrency in this Ethereum 101 guide.
Ethereum history: How it all started
In late 2013, Russian-Canadian programmer and writer Vitalik Buterin worked on a white paper idea based on Bitcoin with the goal of building Decentralized Apps (DApps). Ethereum was then announced at the North American Bitcoin Conference in Miami in January 2014.
Buterin later formed a team to further develop it. The team consisted of Mihai Alisie, Anthony Di Iorio, Charles Hoskinson, Joe Lubin, and Gavin Wood. The group of developers also became the founders of the Ethereum software project.
To fund project development, the founders held a crowd sale of the native token, ETH. By August 2014, it raised about 18 million USD. Frontier, its first platform, marked its tentative experimental launch in July 2015.
Ethereum backers believe the crypto’s main edge over Bitcoin is its ability to do more than money transfers between two parties.
‘Instead of creating a device that just does a specific number of things, you have a device that understands and supports this programming language, and whatever people want to do can potentially be implemented’, Buterin once explained in an interview.
How does Ethereum cryptocurrency work?
Ethereum’s founding developers built its blockchain design based on Bitcoin’s protocol. However, they made some additions to support more functions other than money systems. Therefore, the Ethereum cryptocurrency is not just a digital bearer asset but also the lifeblood of the blockchain that runs through a global network of computers.
Another feature that sets Ethereum apart from other crypto tokens and altcoins in the market is its use of smart contracts. This makes Ethereum the world’s only programmable blockchain that is also a decentralized and community-built system.
Smart contracts are reusable snippets of code published into the Ethereum Virtual Machine (EVM) memory. They automatically carry out conditions that have been met to allow ‘trustless’ transactions. These self-fulfilling contracts remove the need to use a third-party platform. This means that the blockchain is safe from any alteration and fraud.
Moreover, the cryptocurrency also allows developers to build and deploy DApps, as well as Decentralized Autonomous Organizations (DAO). Crypto users can make arrangements with each other, including buying, selling, and trading without a middleman.
How is Ethereum different from Bitcoin?
It may be true that Ethereum was largely based on Bitcoin. Thus, the crypto coins share many similarities, but there are also significant features that separate them from each other such as:
- Trading options – Bitcoin solely trades in cryptocurrency. On the other hand, Ethereum supports a wide range of exchange methods from crypto (ETC), smart contracts, and its EVM.
- Security protocols – Bitcoin uses the ‘proof of work’ system while Ethereum employs the ‘proof of stake’ system. The ‘proof of work’ system aims to prevent hacking attacks such as a distributed denial-of-service attack (DDoS). Meanwhile, crypto miners have to solve complex puzzles by using computational resources in the ‘proof of stake’ protocol.
- Transaction support – Bitcoin only allows users to transact publicly (permissionless or censor-proof) whereas Ethereum supports both permissioned and permissionless transactions.
- Average block time – Bitcoin has an average of 10 minutes in block time while Ethereum has 12 seconds. This means there are more block confirmations in Ethereum.
- Coin supply – Bitcoin has a supply capped at 21 million BTC in contrast to Ethereum’s 90 million ETH. It is speculated that the majority of BTC would have been mined by 2021 while it will only be half for ETH supply.
- Reward system – Bitcoin miners run the platform and confirm transactions to get block rewards. The first computer that solves each new block gets the BTC. On the other hand, Ethereum allows miners to take a transaction fee.
Where to get Ethereum cryptocurrency
As mentioned earlier, you can get Ethereum cryptocurrency in many ways. Here are two main ways to obtain ETH:
- Ether mining – ETH mining requires computing power and solving complex math problems to seal off and approve a block of actions within the network. Miners who complete the task are given a reward for every block they mine. For each new block processed, a miner is paid 2 ETH while a miner’s hash rate depends on the mining hardware.
- Ether trading – Buying and selling is the most common way to get Ethereum cryptocurrency. There are two types of Ether trading:
- Peer to peer trading – You transact with other Ethereum users and pay for the token with any currency you agreed upon.
- Crypto exchanges – It is the most convenient trading option. There is a wide range of ETH trading sites that operate in different jurisdictions you can choose from such as:
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Bitcoin (BTC) $ 63,462.00 5.08%
Ethereum (ETH) $ 4,133.28 0.67%
Binance Coin (BNB) $ 476.43 5.62%
Tether (USDT) $ 1.00 0.03%
Cardano (ADA) $ 2.17 1.31%
Solana (SOL) $ 184.53 8.57%
XRP (XRP) $ 1.11 3.1%
Polkadot (DOT) $ 43.18 3.26%
Dogecoin (DOGE) $ 0.246840 2.3%
USD Coin (USDC) $ 1.00 0.12%
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