The world’s cryptocurrency users began to scour in search of similar options to earn their capital after entering the Bitcoin market. One of these young, but very promising projects is Ethereum, which immediately took a strong position in the market. Large investors invest their considerable funds in this product — it suggests to become the main concurrent of the Bitcoin. We’ll tell in this review what is Ethereum actually is and some more — it’s main features and Russian version of development.
Introductory information about the Ethereum project
Ethereum (ETH) is a kind of public distributed computing platform that is based on blockchain technology. This development allows users to carry out operations with funds using smart contracts and their own crypto-tokens called Ethereum coins with the designation ETH.
Ethereum Project Development History
The founder of the Ethereum project — Vitalik Buterin — is the protagonist of this «cryptocurrency novel», who cooperated with Gavin Wood and squeezed out the utopian at first glance idea, embodying it in a digital reality. The first data that appeared on the network about this project refers to the 2013 year — White Paper was released for the Etherium. The young minds of the modern era also joined in almost immediately. The wished to invest their knowledge and skills in a new project that is ready for innovative solutions. Behind the scenes, the Ethereum was then called the “new generation Bitcoin” and the “Bitcoin version 2.0”. Waving to such heights, Buterin and Wood understood the need to attract a significant amount of investment funds for the implementation of all ideas and ideas. These funds served as an impetus for the launch of the crowd-funding campaign in order to raise funds for the development of the project. The first wave of the public sale of ETH tokens allowed to collect more than 31.5 thousand bitcoins in just 42 days, which amounted to more than 60 million Ethers at that time. The published data of the first wave of ICO drew attention to the Ethereum (ETH) and the platform itself. It was in testing mode at that time and was open for new investments. The growth of Ethereum was fast — the staff grew to 30 people, the company’s offices were opened in Berlin and Amsterdam. The main office was located in Switzerland, and the official project was launched on July 30, 2015.
Differences Ethereum from Bitcoin
Despite the fact that the currency and platform of Ether and are similar to the Bitcoin system — they both use blockchain technology and the organization of the security system, the main feature that determines the differences of these projects is the principle of operation and focus. Ethereum is represented by a flexible and extensive platform, operating on the principle of decentralization and with the availability of local cryptocurrency. Ethereum smart-contracts — is the idea of developers, which was realized within the framework of the project. A smart-contract is a mini-program that can be composed of both a few lines and a complex algorithm — it depends on the tasks.
The complexity of the Ethereum network is not the mystery of the developers, as in the case of Bitcoin — it is a multifunctional system with a well-thought-out algorithm. It is ready to provide the user with a lot of conveniences to work with cryptocurrency within its platform. At the same time, the company is an open society. The identity of developers is initially known to the public, which causes the high level of trust and encourages the user to buy ETH and become part of a new cryptocurrency network.
Bitcoin’s specialization is to conduct anonymous operations with the use of its crypto algorithm. The Ethereum can provide the ability to perform any transactions because it represents an analog of the “programmable module” with the broadest range of possibilities. They can be achieved through Ethereum smart contracts with the confidentiality of user data.
The dynamics of the Ethereum can be compared with the global Internet network, in which Bitcoin plays the role, for example, of usual E-mail.
Ethereum smart contracts
If we understand how Ethereum works, then we immediately face smart contracts. And what is it? It is a kind of contract for the difference in value: the two parties enter into an agreement for a deposit in a certain amount and its return but in a different equivalent — in accordance with the established agreements. This approach provides protection of the volatility of the cryptocurrency and also excludes speculation on the assets.
You can already form an idea of the wide range of possibilities and potential profitability of Ethereum — it can be unlimited. At the same time, each smart contract has its own program code when sending funds.
If we say that the cryptocurrency is Ether and its platform, it also an opportunity to carry out such types of operations:
- Escrow — an analog of the arbitration service, similar to Bitcoin. It uses multi-signature and a more complex scheme of work;
- P2P games — gambling based on the protocol can be implemented in any form;
- Own crypt creating — using the resources of Ethereum’s internal memory, you can develop your own tokens within the framework of the Ethereum platform. They can interact with each other and even create decentralized exchanges;
- Account savings.
What is 1 ETH worth?
The work of the Ethereum platform is impossible without the existence of an Ether coin. It has a fully functional and can be bought, sold, exchanged for other currencies — digital or phiatic. The cost of ETH on November 3, 2017 is 292.61 US dollars. The price of Ether in Bitcoin-equivalent is 0.04027470 MTC per one token. And this is with the capitalization of Ethereum in the volume of nearly 4 million MTC. You can find actual ETH cost rates by clicking on this link https://coinmarketcap.com/currencies/ethereum/.
Advantages of the Ethereum project
Disadvantages of the Ethereum compared with the merits of the product are negligible — some moments just require further development or implementation of innovative solutions. The world is constantly changing, new technologies are emerging, which leads to an increase in user requirements. But the advantages of Ethereum can be discussed in more detail.
Before you start the mining of the Ethereum cryptocurrency, you should understand that the main advantage of the project is a special scripting language that excludes any restrictions. This means that you can even manage the budget of large corporations within the framework of the platform, which will be confirmed through an appropriate contract. You can create your own capitalist systems to develop your own ecosystem based on Ethereum and much more.
Mining Ethereum tokens
The easiest way to get ETH is to mine. Ethereum uses a special algorithm called Dagger-Hashimoto for this purpose, which is based on two others, one of the developers of which was Vitalik Buterin. The uniqueness of the algorithm solves possible problems of Ethereum and provides the opportunity to mine ETH coins with high efficiency when creating mining farms and using the powerful equipment.
How to mine Ether? If you omit the standard part telling you that you need to register Ethereum purse for working with cryptocurrency. Also, you need to undergo verification procedures and get the private Ethereum wallet address, and so on. For ETH mining you need powerful equipment — the more powerful it is, the more efficient mining takes place, which affects the prospects of ETH revenue. It’s better if you get GPU farm ready for work but it costs a lot of money — be prepared to fork out.
How to earn Ethereum without mining
There are other ways to get ETH tokens, which do not involve the purchase of equipment for mining:
- Online faucets — with a daily visit to the platform, entering of the purse address and captcha, you get bonus tokens. They constitute your balance — it’s slow but free;
- Trading on exchanges — watch for an advantageous exchange rate of ETH coins and buy them by paying the deal in other currencies;
- Cloud Mining — virtual online mining. You can lease equipment and successfully procure blocks with the reward for each.