Ethereum Guide

Ethereum Guide

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Ethereum: The Cryptocurrency Platform With A Difference

Taking the current world scenario into account, it becomes apparent that people need to look at alternatives to dealing in cash. Plastic money, cryptocurrency etc., provide good opportunities for the same. Digital exchange platforms are fast becoming very popular. While Bitcoin is said to be the largest cryptocurrency platform, in terms of market capitalisation, there is another cryptocurrency which is fast gaining momentum. Ethereum is currently holding the distinction of being the second-largest cryptocurrency platform today.

What is Ethereum?

Founded in the year 2014 by a team of developers headed by Vitalik Buterin, Ethereum is a programmable blockchain or decentralised software program that:

  •         Enables money exchange and payments,
  •         Allows users to control their data and where apps cannot be used with malicious intent,
  •         Provides users access to a global open financial system and
  •         Uses a neutral, open-source infrastructure and can be controlled neither by a company or an individual.

The native cryptocurrency of this platform is known as Ether or ETH. Thus Ether is the digital money which allows users to perform various financial activities.

How does Ethereum work?

In computer parlance, it can be called a transaction-oriented state machine. Thus it essentially reads all inputs provided by the user and then transitions itself on their basis.

The initial stage is known as the “genesis state” or the blank state. This is before it takes inputs. As transactions take place, it transitions into the final stage. At any point in the whole process, the final state is the current state.

These states individually refer to millions of transaction; they are further grouped into blocks and all individual blocks are chained to their previous blocks.

The transitioning from one level to the next is based on validated transactions. This validation process in Ethereum is known as “mining”. Any device or node in a network can become the miner. Thus at any given point of time, there are thousands of miners attempting to validate a block. Whenever a miner successfully validates a block, he gets rewarded in the form of digital tokens or Ethers.

What is Ether (ETH)

People make the mistake that Ethereum is the name of the cryptocurrency. Ethereum is actually the name of the entire ecosystem. It’s native currency is called Ether. 

Ether has the following essential utilities:

  1. Mode of payment
  2. Store of value
  3. Rewards for miners for the services
  4. Staking (soon)
  5. Open 24/7
  6. Decentralized
  7. Permissionless 


Ethereum differs from the other cryptocurrencies. It undergoes a technological expansion to enable the creation of a new network complete with a new internet browser, a new coding language and even a new payment method.  Thus it offers many advantages like:

  •         Backing of an excellent, innovative and talented team
  •         The blockchain infrastructure advantages
  •         Varied functionality and applicability
  •         Colossal community of developers
  •         High per day traffic
  •         Relatively more secure
  •         Clear regulatory views
  •         Geographic diversity
  •         Truly decentralised
  •         Proven reliability
  •         Successful Venture Capitalist backing etc.


  •         Sluggish transaction speed
  •         First-mover disadvantage
  •         Susceptible to market hoaxes
  •         Pending pivot to PoS or Proof of Stake.

For Ethereum, it has been statistically proved that the advantages far outweigh the disadvantages. This accounts for its fantastic community size and user base.  

Investing in Ethereum

Since Ether trading is not associated with any stock platforms globally, it cannot be bought from an online discount broker. It requires a digital wallet for converting money into Ethers.

Investing in ETH is risky but it is also potentially very lucrative. However, since it is internet currency, it is always advisable to proceed with caution.


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