While blockchain technology is mainly associated with Bitcoin, there are other applications that surpass digital currencies. Creating blockchain requires complex cryptography, mathematics, and coding. However, times have changed rather fast and tools for making blockchains a reality more easily can now be possible with new technologies such as Ethereum. Here is a comprehensive review of Ethereum.
What is Ethereum?
Ethereum is one of the open-source software platforms blockchain modeled distributed platform with varying smart contracts functionalities. It provides a specially decentralized Turing complete virtual machine that executes scripts in their international networks of specific nodes.
Ethereum goes a step further by providing Cryptocurrency token referred as ether that is transferable between different accounts. It can also be used for compensating user nodes based on completed computation.
Ethereum was founded by Vitalik Butein late in 2013. Butein, a computing programmer, was initially involved with Bitcoin with the main target of creating decentralized applications. In his argument, Butein posited that Bitcoin was lacking and a new Cryptocurrency was necessary. Specifically, the core objective for crafting Ethereum was to remedy the Bitcoin shortcomings including the following;
- Use of scripting languages for app developers
- Designing a new platform within the blockchain system for general scripting
Later in 2014, Ethereum development got a shot in the arm through funding from a Swiss company, Crowdsale that bought ethers using Bitcoins. Initially, Ethereum released some prototypes that ultimately yielded more cohesive platforms such as The Olympic, Frontier, and the latest Homestead that is considered most stable.
How does Ethereum work?
When using the Ethereum, a user does not need to store data or even control it from one point. Up to this point, the application works like Bitcoin, but the operation surpasses money focus. By aiming to move away from the Bitcoin model, the Ethereum can include additional rules, alternative transaction formats, and diversified transfer states.
Applying Ethereum might look a little intimidating at first. However, it will be very rewarding once you get used to the system. With time, it is thought that Ethereum could give alternatives to Google and other top computing platforms such as Facebook and Bing. As far as you have a computer or advanced smartphone, it is possible to start using the platform to own and store ethers.
This brings us to the next step of application; ether wallets. These are places to store private keys that allow the user to update ledgers in the blockchain. You can pick the wallet based on personal experience.
Selecting the Ethereum wallets
- Desktop wallets: These run from your laptop or desktop computer after downloading a copy of Ethereum blockchain (Ethereum client). They only require a couple of days and updating in sync with the most recent transactions in Ethereum blockchain.
- Mobile wallets: These wallets are designed for light clients. The platform requires fewer data downloading to connect to the blockchain network when processing transactions. Though this option may look convenient, it is considered less safe for receiving transactions because they do not require nodes for sending accurate info.
- Hardware wallets: These are usually very small (about finger size) but considered the best for Ethereum platforms. The devices are easy to use because they can be detached and even sign transactions when one is offline. However, it is not the best option for people who are frequently on the move.
- Paper wallets: This is one example of the best Ethereum cold storage options that allow users to handwrite private keys on paper slips and lock them. The keys can also be generated with a command line as far as the user has the right Cryptocurrency package installed on the computer. To ensure that the keys are always safe, it is advisable to store them in different locations because once lost; they are gone for good.
Buying ether on Ethereum platform
To buy ether, the process varies by country or currency. First, one must identify another user with ethers and willing TO sell. You use the Meeting in-person to sell or buy ether. This is highly convenient especially for people residing in cities with Ethereum meetings such as Toronto and New York.
For people living in less populated areas, Ethereum allows users to buy and sell directly using Bitcoin or dollars.
The main features of Ethereum
- Smart contracts: This is a deterministic exchange model that is digitally controlled to complete transactions between two or more trusted agents. The contracts are used for facilitating, verifying, and enforcing performance of different procedures while helping to counter risks. The smart contracts are autonomous scripts and stored in various blockchains.
- Democratic autonomous organization: Ethereum can help users to source funds but can also be used to define structures for starting various ideas. For example, one can collect proposals from those supporting the project and then follow the votes to establish how it should proceed. This is also a great way to protect the project from outside influencers.
- Users do not need kickstarters in Ethereum: One of the greatest features of Ethereum is its ability to help users set up contracts and ask for pledges from members of particular community. The cash raised is held until a specific date when the project is expected to roll and run towards a specific goal. Note that if the goal is not met, the funds are refunded and the kickstarter drops off.
Pros of Ethereum
- It allows users to design unique applications without the risk of downtime, censorship or fraud.
- Ethereum allows users to hold and secure their ethers as well as other crypto-assets that are engineered on the Ethereum.
- Users can also create and issue their own cryptocurrencies that are compatible with the selected wallet.
Cons of using Ethereum
- It presents a risk of investment fraud such as Ponzi schemes.
- When compared with other cryptocurrencies, Ethereum is complex to start and apply.
- This platform is still young, and new traders might feel insecure when putting their resources in it.
Where to Buy and Sell Ethereum in Australia?
Crypto Currency for Fun recommends buying Ethereum at CoinSpot. CoinSpot is a multi cryptocurrency wallet with built-in trading features. Users can store many coins, including Ethereum and they offer Instant Delivery or your coins right into your account.
The design of Ethereum demonstrates the fast evolving nature of cryptocurrencies. Though it also has a few shortcomings, it is a great improvement over the previous models and is expected to continue attracting a lot of attention because of its unique operations especially the application of scripting languages for developers.