Ethereum

What Is Ethereum and What Are Its Use Cases? | OriginStamp

When bitcoin was launched in 2009, it caught the interest of many people. One of which was Vitalik Buterin, a programmer who later co-founded Ethereum, with his crowdfunding done in 2014. This article takes a detailed look at Ethereum, its use cases, how to buy, and why you should opt for Originstamp.

what is ethereum?

ethereum is a decentralized blockchain-based software that has smart contract functionality. Ethereum is open source and is mainly used to support the second largest cryptocurrency in the world known as Ether. Ethereum enables smart contracts and applications built on its blockchain to work seamlessly, without fraud, downtime, monitoring, or third-party interference.

Reading: What is the main use of the ethereum network

ethereum is also a programming language that helps developers build distributed applications. one of the major projects with ethereum is microsoft’s partnership with consensys offering ethereum blockchain as a service on microsoft azure to enable developers and enterprise customers to have a cloud-based one-click blockchain development environment.

ethereum was split into two different blockchains in 2016, namely ethereum and ethereum classic. this was due to a hack earlier that year in which the hacker made off with $50 million worth of ether. The hacker took advantage of a flaw in a third-party project and exploited a doa (a set of smart contracts that originated on the ethereum platform).

ethereum was already the second largest digital currency in the market as of September 2019. the idea of ​​ethereum is to renew the process of using applications on the internet today. Today, many third-party intermediaries help us to do the things we want on the internet.

As a result, essential data, such as financial data of users of various applications, is stored on servers controlled by these third parties. this implies that third parties are in control of the data and can do anything with the data without the user’s consent. In addition, it represents a considerable risk of hacker attacks.

how to make use of ethereum

Blockchain is decentralized because its public ledger is not stored in one place. the public ledger is stored on thousands of volunteer computers around the world, each of which is called a node. the verification of the data stored in the blockchain involves more than half of the nodes before being certified as correct. Cryptography is used to keep transactions on the blockchain network secure and also to verify them.

computers are used to solve complex mathematical equations that help confirm transactions on the network and add new blocks to the chain.

Ether, just like any other cryptocurrency, can be used in financial transactions as a digital currency. ether also serves as a medium through which users can perform any task on ethereum.

ethereum aims to provide a system that gives users more control over their data, and also allows applications to be built and run on the blockchain. To run these applications and have this level of control on the ethereum platform, ether is required. the greater the number of people using the platform, the higher the rates.

how to store ether

To store ether, a user requires an ethereum wallet. Most of these wallets are digital and can be accessed through a laptop or smartphone. the ethereum wallet stores the private key (secret keys with which the user can access the ether) of the user.

See also: 100 cryptocurrencies described in four words or less – TechCrunch

If a user loses their private key, they have lost their ether and there is no such thing as a help desk or customer service to contact to retrieve their private key.

There are several types of wallets.

  • hardware wallets: are electronic devices such as thumb drives that can be used to sign and send ether transactions offline. they are separate from the internet and provide a higher level of security. it is not easy to hack and is more suitable for storing a large amount of ether. On the downside, hardware wallets can be lost just like any other key.

    Desktop and Mobile Wallets: Desktop wallets are wallets that run on a laptop or PC, while mobile wallets run on a smartphone. These wallets can be custodial or non-custodial. escrow wallets rely on third parties to keep a user’s private key secure. this, however, has its risks as these third parties can be hacked. Noncustodial wallets do not rely on third parties to safeguard your private keys. the user keeps them safe.

    Paper wallets:This option consists of printing or writing the private key on a piece of paper and keeping it somewhere safe. it is the most outdated storage method. the only thing about this is that you have to remember where it is saved.

    web wallets: are the least secure storage method that involves storing private keys online.

    A wallet connected to the internet is called hot storage, while a wallet that is not connected to the internet is called cold storage. It is recommended to combine hot and cold storage wallets for maximum security.

    how to buy ether

    There are different ways to buy ether.

    • Online exchange platforms: This is usually the easiest method to buy cryptocurrencies. it is a platform that buys and sells ether for a fee. you can buy ether from these platforms with fiat currency (dollar, euro, pounds) with a bank transfer or a debit or credit card. The platforms are compliant with know-your-customer (KYC) laws, which means that a user’s identity must be confirmed before the user can transact on the platform. an example of such a platform is coinbase.

      trading platforms:these platforms connect sellers and buyers through an intermediary, and can also exchange one cryptocurrency for another.

      peer-to-peer:This method involves the buyer contacting the seller directly and negotiating prices. There are no middlemen involved in this process, and no fees are paid. there are some cities like toronto and new york that have ethereum meetups frequently. there are also sites like localcryptos that help connect users who want to exchange peer-to-peer methods of ether.

      how ethereum works

      smart-contracts-vs-traditional-contracts

      Ethereum is not controlled by any third party or entity. Instead, they are controlled by codes. Several pieces come together to ensure that Ethereum is functioning accordingly.

      • See also: TikTok and Streaming Service Audius Partner – Rolling Stone

        smart contracts: the whole point of ethereum having a system not controlled by a third party but by code is induced by smart contracts. Smart contracts are executed automatically when certain set conditions are met without the help of any external body. smart contracts are involved in any cryptocurrency. they are not restricted and can be used outside of ethereum, but are popularly known for their use of ethereum. bitcoin also supports basic smart contracts, but its applications are limited compared to ethereum. some developers and researchers have criticized smart contracts because they open up possibilities for security vulnerabilities.

        Ethereum blockchain: This is where the history of all executed smart contracts is stored. Hundreds of nodes around the world store a copy of the entire blockchain. Thousands of computers process a smart contract each time it is executed to ensure all established rules are met. nodes don’t just store transaction details. accounts, smart contract code, smart contract status are also stored in a node. all nodes follow the same set of rules to verify a transaction and they are all connected.

        Ethereum virtual machine (evm):The ethereum virtual machine executes the smart contracts. it helps to translate the smart contract written on a computer from a language that it cannot read into a language (byte code) that it can read. the evm can execute at least 140 different codes with specific tasks.

        ether:As already stated, ether is the native cryptocurrency of ethereum. ether is stored in accounts, and there are two types of accounts. externally owned accounts are used to hold and send ether by users, and contract accounts are the accounts that have smart contracts.

        proof of work: When a block is created from a transaction, miners, in an attempt to get the correct value of the block, generate values ​​until they get it. then a hash value is sent over the network for nodes to verify when the miner finds it. if validated, the miner receives the ether they unlocked when they discovered the hash. however, there is a plan to switch to a new algorithm called proof of stake, which is designed to consume less computing power and electricity than proof of work.

        ethereum use cases

        here is a short video covering decentralized finance:

        decentralized finance (defi):decentralized finance is a term used to refer to financial services and products that are available and accessible to anyone who can make use of ethereum. No authority can deny a user access to anything or block payments, and markets are always open with defi. anyone can inspect the codes and there is no longer any risk of human error as the services are now automated and code driven. With traditional finance, some problems that exist include

        • denying a person the use of financial services
        • financial services may prevent a person from being paid.
        • limitation of trading hours to zones specific trading hours
        • centralized institutions and governments can close markets at will.

        In the defi system, the user owns and has full control over their own money, the transfer of funds takes only a few minutes, it is open to anyone and the market is always open. a user can also send money anywhere in the world, access stablecoins, borrow collateralized or unsecured funds, trade tokens, purchase insurance, and much more.

        non-fungible tokens (nfts):nfts are tokens that can be attached to unique items and are not exchangeable for any other item. They allow to give value to art, music, etc., in terms of digital currency. they are secured on the ethereum blockchain and can only have one owner at a time. a new nft cannot be copied and pasted and no two can be the same. they are compatible with anything that is built on the ethereum platform. nfts can be sold anywhere and owners have access to the global market.

        Decentralized Autonomous Organizations (DAOS): DAOS are collectively owned and governed by their members, and run on the basis of smart contracts. they are internet-based and have built-in treasures that cannot be accessed without the group’s permission. They make decisions by proposals and votes so that all members of the group can express their opinions. There is no CEO or CFO, and the rules governing their spending are part of the DAO code. the codes and all their activities are transparent and operate a democratic system. automatically counted votes are required before any changes can be implemented. examples of daos are charities, companies, networks of freelancers, etc.

        how originstamp uses the ethereum blockchain

        Like other blockchains, ethereum is an aggregate-only ledger, and all data stored within it is protected from tampering. originstamp uses the ethereum blockchain as one of the blockchains to create tamper-proof blockchain-based timestamps. Source stamp timestamps can be used to prove that a document or digital asset existed at a specific point in time and has not been modified since then. originstamp’s latest event api also uses ethereum to create transparent and hard-coded event chains.

        conclusion

        Just behind bitcoin, ethereum is also a growing platform. As of April 2021, it is the second largest blockchain in the world. In the next few years, Ethereum could become bigger than Bitcoin and be adopted by big organizations like Google and Facebook. this is mainly due to its wider range of applications.

        See also: Best way to buy Ethereum from Australia – Forbes Advisor Australia

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