These applications can be, among others, security programs, voting systems and payment methods that belong to the cryptocurrency market. Like bitcoin, ethereum is not regulated by central authorities, such as banks and governments.
Vitalik Buterin is the creator of the idea embodied in ethereum. He launched the first version of the platform in 2015 with the help of several co-founders. Since then, it has quickly gained popularity and contributed to the rise of new rivals for bitcoin. The price of ether (the cryptocurrency of ethereum) can be very high since it is one of the most popular cryptocurrencies. Therefore many cryptocurrency traders choose to invest in ether instead of bitcoin.
Ethereum works as an open-source platform based on blockchain technology. This blockchain is hosted on many computers in the world, so it is decentralized. Each computer has a copy of the blockchain, and there must be a general agreement before applying any changes to the network.
The ethereum blockchain is similar to that of bitcoin in that it also functions as a record of the transaction history. However, developers can also build and deploy decentralized applications or “apps” with the ethereum network. These are also stored on the blockchain along with the record of transactions.
How does ether work?
Ether, like other cryptocurrencies, uses a shared digital book where all transactions are recorded. It is publicly accessible, wholly transparent and complicated to modify afterwards.
This ‘digital ledger’ is called a blockchain, and it is built through the data mining process.
Miners are responsible for verifying groups of ether transactions to form “blocks” and encode them by solving complex algorithms. These algorithms can, in turn, be more or less complex as a way of maintaining a sure consistency in the processing time of the blocks (around one every 14 seconds).
The new blocks are then linked to the old blockchain, and the miner in question receives a reward, that is, a fixed number of ether tokens. Usually, it is five ether units, although this figure can be reduced if the cryptocurrency continues to rise.
How to trade with ether?
To start trading the movements in the price of ether, access your CFD trading platform. If you do not have it yet, you must first open your real account. You will find ‘Ether’ by selecting the cryptocurrency market in the menu on the left or through a direct search. Keep in mind that what you will do then is operate with a derivative contract on the price of ether, but you will not directly own the cryptocurrency.
How does Ethereum work?
The Ethereum blockchain is very similar to bitcoin, but its programming language allows developers to create software to manage transactions and automate specific results. This software is known as a smart contract.
If a traditional contract describes the terms of a relationship, a smart contract ensures that those terms are met by writing them in code. They are programs that automatically execute the contract once the predefined conditions are met, eliminating the delay and cost when executing an agreement manually.
To take a simple example, an Ethereum user could create a smart contract to send a set amount of ether to a friend on a specific date. They would write this code on the blockchain, and when the contract is completed (that is, when the agreed date arrives), the ether will be sent automatically.
What are apps?
Dapps are open-source computer programs that use blockchain technology. Unlike traditional applications, they do not need an intermediary to function. As this concept is still relatively new, it isn’t easy to give an exact definition. However, their common characteristics include the fact that they are open-source and decentralized.
Dapps are created from groups of intelligent contracts. Smart contracts are code scripts that facilitate the exchange of money, stocks, content or anything of value. Intelligent contracts are formed with the virtual machine called Ethereum Virtual Machine (EVM in English). When a smart contract is active on the blockchain, it acts like a computer program that runs automatically. Its execution occurs as scheduled, without censorship, crashes, or third-party influences.
Is ethereum a cryptocurrency?
Ethereum is not correctly a cryptocurrency: the word ethereum refers to the digital platform. The currencies themselves (used for online payments) are called ethers. In other words, others are the “crypto gasoline” (or cryptocurrency) of the ethereum network. When it comes to trading, the quotes that you will see are those of ether. However, you will see that it is common to refer to the cryptocurrency by ethereum.
