What is Ethereum?

Born out of the desire to expand on the basic principles of Bitcoin, Ethereum has quickly become one of the most popular cryptocurrencies in the world. It’s unique smart contract functionality allows for decentralized applications to be built on top of it, making it a highly versatile platform. With its widespread adoption and dedicated community, Ethereum is quickly becoming the go-to choice for developers and investors alike.

Unlike traditional systems that rely on centralized servers, Ethereum is decentralized, meaning that data is stored on a network of computers rather than a single location. This makes it virtually impossible for hackers to compromise the system, ensuring that valuable information remains secure. With Ethereum, developers can build decentralized applications, or dApps, that allow for efficient peer-to-peer transactions, smart contracts, and much more.

Smart contracts are code-based programs that are stored on the Ethereum blockchain and automatically carry out certain functions when predetermined conditions are met. They’re essentially self-executing contracts with the terms of the agreement between buyer and seller being directly written into lines of code. The deployment of smart contracts has been made possible through the Ethereum network, which allows for the creation of decentralized applications. The beauty of smart contracts lies in its ability to cut out intermediaries and reduce the need for trust between parties.

A young programmer named Vitalik Buterin created Ethereum. Buterin, born in Russia but raised in Canada, was just 19 years old when he first introduced the concept of Ethereum to the world. His vision was to create a decentralized platform that could be used to build a wide range of applications, from simple financial contracts to complex decentralized autonomous organizations.

Resources

White paper

Official website

Ethereum blockchain explorer

How does Ethereum work?

Ethereum is a decentralized open-source blockchain platform that allows developers worldwide to build and deploy decentralized applications (DApps). The Ethereum network enables developers to create smart contracts, which are self-executing contracts with the terms of the agreement written into the code. Smart contracts are immutable, meaning they cannot be changed once they are deployed on the Ethereum network. Ethereum’s use of smart contracts differentiates it from other blockchain platforms like Bitcoin and Bitcoin Cash. The Ethereum platform uses a cryptocurrency called Ether as a means of payment for transactions and to incentivize developers to process transactions on the network. Ethereum’s design addresses some of the scalability issues of other blockchain platforms through the implementation of sharding, a process that breaks the network into smaller groups of nodes that can process transactions independently.

All transactions carried out via Ethereum are a matter of public record much like Bitcoin. The miners are responsible for ensuring that the change is confirmed and the entire network updated. No tampering is allowed, making it a perfect record of all transactions. The question arises, how miners get paid for their efforts. To explain it, each transaction is charged a fee called “gas,” which is paid by the corresponding user. The miner that completes the task and confirms the transaction collects the gas fee, incentivizing more mining activities, enhancing network security, and restricting network spam.

Ethereum 2.0

Ethereum 2.0 is the latest version of the popular blockchain technology, Ethereum. This brand new version consists of multiple updates and improvements that will help to make Ethereum more reliable and scalable. One of the significant upgrades is the transition from Proof-of-Work to Proof-of-Stake consensus mechanism, which ensures faster transactions and a better energy-saving mechanism. Another exciting feature is the implementation of sharding, which allows for more transaction processing capacity and helps in reducing the load from the Ethereum network. With numerous enhancements, Ethereum 2.0 will make the platform more accessible and beneficial for developers, businesses and users alike. The Ethereum 2.0 upgrade is rolling out in multiple phases. The initial ones include:

• Phase 0: Beacon chain and proof-of-stake launch
• Phase 1: Merging the old and new Ethereum blockchains
• Phase 2: Introduction of “shard” chains and roll-up technology
• Phase 3: Security improvements

Ether and gas

Ether is the cryptocurrency that runs on the Ethereum blockchain and is used to pay for transactions and smart contract executions. It’s like the fuel that drives the Ethereum network. Gas, on the other hand, is the unit of measurement used to calculate the amount of computational power required to execute a given transaction or smart contract. Essentially, gas is the cost associated with performing any action on the Ethereum blockchain.

How much gas you pay for each action on the Ethereum blockchain is calculated based on two things:

• Gas cost: The computational energy an operation on Ethereum requires to be processed and executed on the network. This is denominated in units of gas.
• Gas price: The rate set by the user for converting gas into units of ether. These units are usually denominated in “gwei,” which is a unit of Ethereum equivalent to 0.000000001 ether.

Cost of an operation on Ethereum = gas cost x gas price

How to buy Ether (ETH) on XT.COM?

Ether (ETH) can be purchased directly from XT.COM by using a debit or credit card. Ether (ETH) can also be traded for other cryptocurrencies on the XT.COM Crypto Exchange. Live Ether (ETH) price is updated in real-time on XT.COM. Buy Ether (ETH) on XT.COM in four simple steps:

1. Create your free XT.COM account
   Sign up or download the XT.COM app and start the sign-up process. Provide your email address, country of residence and secure your account with a strong password.
2. Secure Your Account
   Ensure stronger protection of your account by setting Google 2FA code and anti-phishing code.
3. Choose how you want to buy the Ether (ETH) asset.
   Click on the “Buy Crypto” link on the top left of the XT.COM website navigation, which will show the available options in your country.
4. Buy Ether (ETH)
   Use a variety of payment options to buy Ether (ETH) on XT.COM.