In this short comprehensive Ethereum tutorial, we will explain what is Ethereum, the difference between Bitcoin and Ethereum as well as explain what is Ethereum mining. This guide is designed for people who do not yet have a solid grasp of what is Ether but would like to know more.
What is Ethereum?
Ethereum is both a cryptocurrency and as a decentralized platform based on the blockchain technology. It was proposed by Vitalik Buterin in late 2013 and was released on July 30, 2015, with 72 million premined coins. The developers wanted to improve upon the blockchain technology that was created alongside Bitcoin.
Ethereum is a decentralized platform focusing on the use of smart contracts to try and build a fully autonomous world computer that supports decentralized applications, or DAPPS, and software. The goal is to get rid of third parties that store, control, and potentially leak or abuse your data such as tech giants like Facebook, Twitter, or even Google.
This would give back the ownership of all data to the users as no one could ever ban you and impeach you from accessing the app, your information, or assets. A DAPPs could never be taken off meaning you would never, for example, lose all the files you worked so hard on. Best of all Ethereum provides tools for developers to develop their applications on the network without having to hire entire teams of dedicated coder and blockchain engineers.
Ethereum, ETH, is the cryptocurrency that fuels the entire network and allows the transaction and smart contracts to be processed.
Now that we have covered what is Ethereum we would like to give out a little tutorial on how to get started with Ethereum. First, there are several ways to earn your first coins; either mine (explained further below), buy, win, or exchange them.
For details on Ethereum mining please refer to the what is Ethereum mining section of this article.
To buy the coins it is recommended to head to a reputable crypto-to-fiat exchange such as Coinbase, Binance, or ZB.com. Ether can be bought using most common currencies such as USD, EUR, or RMB.
Winning Ether can be done either as part of an airdrop, a promotional campaign in which companies give out coins to raise awareness, a marketing activity, betting, subscription/ registration, or by playing/ participating in some games DAPPs. There is almost always a ways to earn cryptocurrencies going on around you and some twitter and youtube channels dedicate themselves to finding these ways and spreading the word.
Exchanging for Ethereum can be done either directly as peer-to-peer or through dedicate exchanges such as Coincola, or localbitcoins. It is recommended to check the price of each coin and the reputability of both the exchange the trader you will deal with before agreeing to any trade.
What is the Difference Between Bitcoin and Ethereum?
As previously mentioned Ethereum does not solely serve as a cryptocurrency but also as a platform for DAPPs and other applications. While Bitcoin was made specifically as a means of exchange and store of value Ethereum focuses more on the blockchain technology applications and its uses. Ethereum as a cryptocurrency still functions as a store of value and has the potential to overtake Bitcoin as the most valuable of cryptocurrencies, but it also has a value as a fuel for the network and as such, while not the original crypto, will likely remain one of the top cryptocurrency for a long time.
The improvements and uses of smart contracts are, thus, what differentiates Bitcoin and Ethereum the most as Ether is necessary to run the contracts’ ensuring developers optimize both their applications and their protocols to achieve the best possible results.
What is Ethereum Mining?
Ethereum mining is the process of block verification using miners which is done in every blockchain as block first need to be verified before a consensus can be reached. Ether uses the Proof of Work but will soon move to a Proof or Stake concept following the Casper protocol as scalability can be more easily managed using a PoS.
Mining works by having individuals participate in their computing power as a node in the network. Each block needs to be approved by a miner before being sent and added to the blockchain. To gain the right to approve a block miner need to resolve a complex computational problem, or hash, using cryptographic technology. The first miner solving this problem gains the right to approve the block and gains a reward in the form of both new ETH being created and a transaction fee from all the transaction approved in the block.
Contrary to some other cryptocurrencies like Bitcoin, Ether does not have a cap limit but it does have a limited supply in time as only 18 million new ether can be created through mining every year.
This concludes today’s article about what is Ethereum, how it works, how to get it, how it differs from Bitcoin, and what is special about its mining process. We hope you learned a lot, enjoyed the read, and stay tuned for more great content.