Ethereum is the second largest cryptocurrency in the world and has some unique characteristics that make it different from Bitcoin and a highly sought-after investment for crypto enthusiasts. But what makes Ethereum so unique? Here’s a closer look at this project and how Ethereum became popular.
What is Ethereum?
Vitalik Buterin invented Ethereum in 2013. He saw that Bitcoin had some severe limitations and set out to build a better blockchain. He wanted to create an immutable ledger that could be used to store any data and execute smart contracts without any downtime, fraud, or third-party interference. This blockchain would act as the infrastructure for other developers exploring decentralized technologies.
Ethereum is a decentralized platform that runs smart contracts: applications that run exactly as programmed without any possibility of downtime, censorship, fraud, or third-party interference. These apps run on a custom-built blockchain, an enormously powerful shared global infrastructure that can move value around and represent the ownership of property. This enables developers to create markets, store registries of debts or promises, move funds per instructions given long in the past (like a will or a futures contract), and many other things that have not been invented yet, all without a middleman or counterparty risk.
Smart Contracts
The most important innovation brought by Ethereum is its concept of smart contracts: computer programs that directly interact with other people’s money on the blockchain without any intermediary. Smart contracts allow you to exchange money, property, shares, or anything valuable transparently while avoiding intermediaries and ensuring security through cryptography.
In the Ethereum whitepaper, Buterin describes Ethereum as “a platform that runs smart contracts.” Smart contracts are built with snippets of code that can be deployed on the Ethereum blockchain. Smart contracts are executed by the network of nodes and miners using an algorithm called consensus, which ensures that all participants in the network agree about what happened (or didn’t happen) when a smart contract was executed or interacted with.
Stake your ETH
You can stake your ETH to earn rewards over time as the Ethereum blockchain network continues to work. Any stakeholder in a proof of stake blockchain network, such as Ethereum, can become a node on the network with their personal machines. These node operators will put their tokens up for collateral in a stake pool for a chance to be selected to verify transactions on behalf of the network. Any other stakeholders can also add their coins to an existing stake pool to increase that particular node’s odds of being selected for verification. If the node operator successfully verifies those transactions in time, then all stakeholders in the pool will receive a portion of the rewards generated. Staking is a great way to earn up to 10%-20% rewards on your investment, but it also comes with risks. If your node operator is untrustworthy and does not complete the verification process in time, all stakeholders will suffer for it with their coins as collateral.
How to Buy ETH
Ethereum is the second largest platform by market capitalization, right after Bitcoin. Since its launch, it has become the second largest platform by market capitalization and one of the most popular.
There are several ways to buy ETH USD. The most common way is through an online cryptocurrency exchange or broker, but you can buy it from other people directly via peer-to-peer platforms. To do so, you’ll need a wallet that supports Ethereum and the cryptocurrency of your choice. Consider exchanges with low transaction fees, such as FTX. FTX offers access to the Ethereum blockchain, the NFT marketplace, and over 300 other cryptocurrencies for investors to utilize in their digital portfolios. You can use ETH to buy other cryptocurrencies or NFTs stored on the Ethereum blockchain.
Ethereum is not just a cryptocurrency but a platform that allows developers to build their own apps using smart contracts. You can learn about Ethereum and ETH by joining an online crypto community like FTX and begin your investment journey today.
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