What is Ethereum, and how does Ether work?
So you know about Bitcoin i.e the revolution, the future of money, the most prominent cryptocurrency in the world, but you’re wondering what Ethereum or Ether is?
If you want to know how to get more value for your crypto, or you really want to see how this Ethereum thing works, then this article is for you. We’ll look at the Ethereum blockchain, how it came to be, what you can do with it, and how you can convert your Ether to Naira, Pesos, Rupee, etc, or vice versa.
You can start your crypto journey with the latest tools, resources, latest news and more by joining our community on Telegram. We are global, thanks to crypto. So, it doesn’t matter what country you’re in because regardless you can join us to learn.
Ethereum: A brief history.
After the launch of Bitcoin in 2009, many people didn’t want to exchange their dollar or Naira for Bitcoin. People speculated about it, and because it was nearly traceless, criminals often used it.
Luckily, a few people saw potential in the cryptocurrency beyond criminal activities. One person intrigued by the cryptocurrency was a man named Vitalik Buterin, a Russian-born Canadian programmer and writer. He would later become one of the co-founders of the Ethereum blockchain. He is part of the reasons why you can exchange your Naira for Ether or anything of value on ValorExchange.
Buterin was fascinated by Bitcoin. In a later interview with Business Insider in 2019, he stated, “I thought [Bitcoin] was something exciting. I started getting into the community more and more.”
In 2012, Buterin would co-create a magazine publication titled “Bitcoin Magazine”. He would travel around the world meeting Bitcoin developers and start conceptualizing a better Bitcoin, a new one with more functionality. This was the foundation for the Ethereum blockchain. In 2013, Buterin attended a Bitcoin conference that convinced him to drop out of school and pursue cryptocurrencies full-time.
In late 2013, Buterin would release the white paper for the Ethereum Blockchain detailing smart contracts, Decentralized Apps (DAPs), and automated immutable statements. He was 19.
Although DAPs already existed, Buterin wanted to unify how they worked and interacted to improve adoption.
Buterin, his co-founders Gavin Wood, Joseph Lubin, Charles Hoskinson, Mihai Alise, Anthony Di Iorio, Jeffery Wilcke, and Amir Chetrit would hold an Ether token presale to raise funds and would raise a total of $18,439,086. This would fund Ethereum’s activities for the foreseeable future.
As time passed, more developers joined the team with their decentralized ideas. A system was set up whereby a majority had to vote on changes on the network instead of all power being placed on a single CEO.
Unfortunately, hackers would later steal over $40 million from the DAO’s holdings. This would result in all Ethereum activities being moved into a new, more secure protocol under the same name. This newly upgraded system would be called Ethereum, while the original network would be referred to as Ethereum Classic.
The founders would go on to create The Ethereum Foundation to maintain and create networks.
How does Ethereum work?
Ethereum exists in a decentralized network, meaning it doesn’t exist in one place. There are no centralized servers, making it immune to a total crash. Ethereum has a currency called Ether, which you can use to make payments, transfers, etc. Ethereum works with a decentralized computation engine called the Ethereum virtual engine that handles millions of projects on the blockchain.
When people make a transaction on the Ethereum blockchain, the transaction has to be verified by some special people known as miners. These miners must be compensated for their efforts and expensive equipment, so specific fees are charged for each transaction. These fees are known as gas fees.
So for every time you buy a shoe or purse with Ether or make a transfer, the gas fee is added to the total amount.
When a transaction is successfully verified and added to the blockchain, the miners responsible are also rewarded with more Ether for their work by the network. This is how the Proof Of Work (POW) consensus operates.
What is Ethereum 2.0?
Ethereum is upgrading to a better version. This upcoming integration would help with Ethereum’s scaling problems and use another consensus mechanism called Proof of stake.
The belief is that with Proof of stake, Blockchain operations would be able to move quicker with lesser gas fees.
Uses of Ethereum
Decentralized apps (DAPs): Ethereum hosts a wide range of decentralized apps for gaming, investing, P2P transfers, social media and many more.
Smart contract: They are contracts that automatically execute when the contract’s terms or conditions have been met. They operate mainly on the Ethereum network and have a wide range of applications in the Agric, law, etc industries.
Non Fungible Tokens(NFTs): NFTs powered by the Ethereum blockchain allow artists, writers, musicians, etc., to sell their art, among other things, on the blockchain network.
Decentralized Finance(Defi): This is a growing financial technology. It aims to provide decentralized financial services directly to those who need them. There are thousands of Defi projects on the Ethereum network.
Currency: Ether, Ethereum’s currency, can be used to make payments, international transfers, save to fund a business idea and more on ValorExchange.
How do i get Ether
It’s simple, for you to be able to access Ether, you’ll need an exchange. We’ve already told you all you can do with ValorExchange. But did you know that you can also exchange your fiat currency for Bitcoin, Ether or Tether on ValorExchange.
All you need to do is create an account for free and the rest is history.
The Ethereum blockchain is incredible and fast-growing. There is so much to know or learn on the subject, and we have a community that we inform about the industry’s daily happenings. We share articles, resources, tools, and more on our Telegram community. So, if you’re a little curious or genuinely want to learn more about the crypto world, join us.