What is Ethereum (ETH), and how can you get it? Guide for beginners!

What is Ethereum? Ethereum (ETH), one of the most ambitious blockchain projects ever, aims to use cryptocurrency to decentralize products & services for a broad range of uses other than money.

Ethereum is a more generalized approach to Bitcoin, which aims to be digital gold. It allows its users to create any number assets and programs that regulate their operations.

This has resulted in (perhaps imperfect) comparisons of Bitcoin and email. While Ethereum is a powerful, special-use tool that can be used for a variety of purposes, it has more in common than the web browser. Its purpose is to authorize programs that users can use to interact with them.

This analogy communicates the purpose of Ethereum’s team, which created its own virtual machine (and scripting language) to run its programs. It also raised funds by selling its own money (ether) and introduced a concept known as “state” in cryptocurrency.

Simply put, Ethereum tracks both changes (confirmed transactions made on the blockchain) and potential changes to come. This is a key part of its vision.

These multi-step calculation functions, also known as “smart contract” on Ethereum, are called multi-step calculations. Decentralized applications (dapps) are the larger, more complex constructs of multiple smart contracts.

Even though these programs are primitive, it is possible that they could be used to one day create software that replicates the behavior of some the largest Internet companies.

Amazon can be viewed as a type of state service. It connects buyers via a simple web interface with a vast, constantly updated inventory stored in databases. A for-profit company is the technology administrator and intermediary in this instance.

This is how Ethereum can be understood as a first attempt at using cryptocurrencies to create markets that regulate different parts of these monopolized services.

Ethereum developers are currently in the early stages for implementing this idea. They are preparing a revision to its core code, “Ethereum 2.0”, that will bring new changes.

What is Ethereum?

You can say that there are two Ethereums: the Ethereum currently in use and the Ethereum the developers plan to finish one day after they have completed their roadmap.

Although Ethereum has made a lot of progress since its launch in 2015 it is important that you remember that not all the features proposed have been implemented.

What is Ethereum? : Ethereum Blockchain

Ethereum today uses proof-of work mining (where computers use energy to solve puzzles to create blocks) as its power source. Each 12 second, miners combine transactions to create new blocks.

Developers create smart contracts (programmes) in Solidity and Vyper programming languages. Then, they implement the code on the Ethereum Blockchain.

All nodes (computers that run the software) have a copy the Ethereum Virtual Machine, (EVM). This compiler converts smart contracts written in Solidity or Vyper and executes the changes in transactions on blockchain.

A group of Ethereum users rejected an attempt to update the code in 2016, and instead chose to run older code. A new cryptocurrency, Ethereum Classic, was born.

What is Ethereum Proof of Stake?

Ethereum 2.0 will see a fundamental overhaul of its operating system. It will migrate to a proof-of-stake system (PoS), or proof-of-stake system.

A proof-of-stake model allows any user to hold at least 32 ETH to lock these funds into a contract. The contract would then be eligible for rewards for solving the calculations required to add new blocks on the blockchain.

You can find more information about this transition in the 2020 Kraken Intelligence Report.

Why Ethereum?

Ethereum stands out in a world where many cryptocurrencies struggle to find a single use case. It has been through multiple phases of strong demand, which is something that makes it unique among cryptocurrencies.

Private Blockchains

Major banks and institutions were among the first to adopt the Ethereum platform. They used its open-source code in 2015 and 2016 to create proofs and develop research and development projects.

Even though they did not copy Ethereum’s code, many were inspired by it, such as the Linux Foundation’s Hyperledger or R3’s Corda. These projects copied some parts of the architecture, but decided that they didn’t need a new cryptocurrency.

The Enterprise Ethereum Alliance was a non-profit organization that was created by major banks and corporations to support Ethereum. Its goal at its 2017 inception was to connect the various private bank blockchains with the main Ethereum blockchain.

What is Ethereum?

In 2017, entrepreneurs began to flock to Ethereum with the belief that it could be used to raise capital by creating new cryptocurrency and selling them to global customers in what was called “initial coins offerings.” (ICO).

ICOs took advantage of the Ethereum’s ability to allow developers to create new crypto assets using token standards, without having to start a new code base.

Entrepreneurial projects now have their own blockchains. Live cryptocurrencies such as Tron or OmiseGo were launched as tokens on Ethereum.


Decentralized finance (DeFi) is the latest innovation in the network. It has been created by entrepreneurs using Ethereum to replicate traditional financial services.

MakerDAO was one of these projects. It designed a protocol to decentralize the management and control of a cryptocurrency that is tied to the US dollar. Others DeFi projects also aim to automate or decentralize financial services like loans and credits.

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