When looking into virtual currencies, you will
often hear about a currency called "Ethereum". It is the second most
famous currency after Bitcoin.
One of the significant currencies featured on
global exchanges is Ethereum.
In this article, if you read this article, you
will be able to explain what Ethereum is, such as an overview of Ethereum, its
features, and how it works, so don't forget to read it to the end!
Ethereum is a platform with decentralized
applications and smart contract functionality.
It is easy to understand if you can build an
application using Ethereum.
The project has been in open-source development
since December 2013, and the first stable version (Homestead) was released on
March 14, 2016.
The cryptocurrency used within this platform is
called Ether (ETH).
features and mechanisms of the Ethereum
From here, we will explain the features and
processes of Ethereum.
A smart contract is implemented
The most prominent feature of Ethereum is smart
Ethereum is built on smart contracts and can
automate transactions. Specifically, it contains a program that automatically
performs a predetermined action when the user takes a specific effort.
With this smart contract, you can guarantee
contract transparency without third-party intermediaries.
Ethereum is the foundation of DApps
Ethereum was created as a platform for developing
decentralized applications called DApps.
Ether serves as a "utility token" that
pays for DApps.
Ethereum is also in the spotlight for NFTs
A hot topic in recent years has been the adoption
of Ethereum as the main transaction currency for "NFTs".
When you buy and sell digital artwork as NFTs on
the Ethereum platform, all transactions take place on the blockchain and can be
The following article explains NFT in detail, so
please take a look.
Here are some of the benefits of using Ethereum.
Fast remittance speed
In order to complete a virtual currency transfer,
the transaction must be approved.
Approvals occur once every 10 minutes for
Bitcoin, while once every 15 seconds for Ethereum, making it possible to send
It is easy to maintain a stable price with no upper limit on issuance
Ethereum does not have a problem limit.
Bitcoin has a "half-life" where the
supply decreases as the number of coins issued increases, whereas Ethereum has
no such limit and is relatively stable.
Blockchain technology, which is used in
cryptocurrencies like Ethereum, is known for its strong security and anti-fraud
Ethereum, which combines blockchain technology
with smart contract technology, can be said to be a system with strong
Issues of Ethereum
From here, we will introduce the future
challenges of Ethereum.
Have scalability issues
Scalability issues refer to bottlenecks caused by
blockchain's limited processing power.
Although Ethereum has a fast processing speed, it
has a problem in that the processing cannot keep up with the transaction demand
and cannot respond.
In other words, the more popular Ethereum
becomes, the bigger the scalability problem becomes.
There are adverse effects due to smart contracts
In Ethereum, although security is strengthened
through smart contracts, program and data errors are difficult to deal with.
In the past, when 3.6 million ETH was stolen,
there was a case where the only way to deal with it was to make the data
Gas prices are soaring
A "gas fee" in virtual currency is a
fee that occurs during transactions.
Ethereum charges a fee in addition to a
remittance fee for executing smart contracts, so gas prices will increase
proportionally as transaction volume increases.
Ethereum works and its relationship with the blockchain
As we said, Ether is the cryptocurrency of the
Ethereum platform. It is something like 'Petrol' that replaces Ethereum. This
is why ether is known as 'gas'. Every transaction, every movement that takes
place within the Ethereum network, requires gas. And when more important, a
bigger, more gas you will need. Logical, right? Gas, in short, is the unit of
measurement used in transactions with ETH.
We are going to do an example. I request you to
do something. That task costs 3 Ether. Well, that "job" will be
linked to a smart contract where it will say that, if X person does that job
for Y, they will be sent 3 Ether. It is sealed and immutable on the blockchain
of the Ethereum network.
So, this task will be done automatically,
efficiently, and almost instantly.
the difference between Ethereum, Ether, and ETH?
Ethereum: The name of the
Ether: Native cryptocurrency that
uses the Ethereum network. Of course, calling the cryptocurrency Ethereum is
natural, normal, and even 'correct'. You will find it in many cryptocurrency
exchanges (buying houses).
ETH: Abbreviation that you will find when
the difference between Ethereum and Bitcoin?
Obviously, Bitcoin and Ethereum are two popular
cryptocurrencies. Yes, in that order. And they have a lot in common, like not
reporting to any government or regulatory agency. But there are many
differences between them too.
The Ethereum blockchain is like Bitcoin, this is
true because it also serves as a kind of historical record of transactions.
But, with the Ethereum network, so-called 'apps' or decentralized applications
can also be developed.
But, let's go over the main differences between
Bitcoin and Ethereum:
The main difference between these
two cryptocurrencies is their purpose. Bitcoin wants to be a digital currency
with which goods, products, and services can be acquired, something like money.
Ethereum, on the other hand, has another purpose: executing these smart
contracts within the blockchain network.
The cryptocurrency supply of
Bitcoin is limited to 21 million. That is, it is finite. But, the supply of
Ethereum is endless.
Although Bitcoin is more famous,
Ethereum is actually used on more websites for transactions. For example, if
you like football, you can look at advertising websites that use the Ethereum
network to buy or sell player cards.
While bitcoin is considered a
global digital currency accepted for some payments, ether currency is only
accepted for transactions in digital applications that run on the Ethereum
network and others that use its blockchain technology.
How to buy
Now that you have a general overview of Ethereum,
we will show you how to purchase it.
1. Select a virtual currency
exchange and open an account
Choose an exchange that suits you from domestic
and foreign virtual currency exchanges and open an account.
To open an account, you'll need documents such as
identity verification, so it's a good idea to prepare them in advance
Also, opening an account can take some time, so
it's a good idea to have plenty of time to complete the process if you want to
invest in virtual currency.
Also, fees and transaction units differ depending
on the exchange, so it will be easier to manage if you compare and choose
2. Deposit your local currency
into the account
your currency to trade in the virtual currency exchange account opened at ①.
The deposit procedure is done from the exchange's
browser or application.
After making the payment, don't forget to check
the payment amount.
3. Purchase Ethereum at a sales
office or exchange
Once you deposit your coins, you can finally buy
Ethereum in your desired unit.
When buying and selling virtual currencies, there
are cases where a significant fee called the spread is incurred, even in fees
declared by virtual currency exchanges.
The spread is the difference between the selling
price and the buying price of the virtual currency. And the bigger the
difference between the selling price and the buying price, i.e. the bigger the
spread, the higher the fee.