Tag Archives: ethereum

What is Ethereum? Ethereum Price Value

What on earth is Ethereum? I mean, I keep hearing about it all the time, I’ve seen it’s the second largest cryptocurrency around but I just can’t seem to wrap my head around it. Is it as revolutionary as Bitcoin? Can it actually change the world as we know it? If you want to have a better understanding of Ethereum, but are tired of explanations that sound like complete technical gibberish, stick around… Here on Crypto Swami Sunday, or should I say Ethereum Sunday we’ll answer these questions and more.

Before we get into Ethereum coin we need to do a quick recap about Bitcoin, since it’s the basis from which Ethereum token was born.

By now you probably know that Bitcoin is a form of decentralized money, and if you still have some questions about what that means or how it works, then you might consider revisiting our original video, “what is Bitcoin”. Before Bitcoin was invented, the only way to use money digitally was through an intermediary like a bank, or Paypal. Even then, the money used was still a government issued and controlled currency. However, Bitcoin changed all that by creating a decentralized form of currency that individuals could trade directly without the need for an intermediary.

Each Bitcoin transaction is validated and confirmed by the entire Bitcoin network. There’s no single point of failure so the system is virtually impossible to shut down, manipulate or control. Pretty neat huh? Well, now that we know that money can be decentralized, what other functions of society that are centralized today would be better served on a decentralized system? What about decentralized voting?

Voting requires a central authority to count and validate votes. Real estate transfer records currently use centralized property registration authorities. Social networks like Facebook are based on centralized servers that control all of the data we upload to them.

What if we could use the technology behind Bitcoin, more commonly known as Blockchain, to decentralize other things as well? The interesting thing about Blockchain technology is that it’s actually the by-product of the Bitcoin invention.

Blockchain technology was created by fusing already existing technologies like cryptography, proof of work and decentralized network architecture together in order to create a system that can reach decisions without a central authority. There was no such thing as “blockchain technology” before Bitcoin was invented. But once Bitcoin became a reality, people started noticing how and why it works and named this “thing” blockchain technology. Blockchain is to Bitcoin what the Internet is to email; a system on top of which you can build applications and programs. A currency like Bitcoin is just one of the options.

So this got people very excited, and they began to explore what else can we decentralize. However, in order for a system to be truly decentralized it needs a large network of computers to run it.

Back then the only network that existed was Bitcoin and it was pretty limited. Bitcoin is written in what is known as a “turing incomplete” language which makes it understand only a small set of orders, like who sent how much money to whom. If you want to create a more complex system, you’ll need a different programming language, which means a different network of computers.

Imagine for a second you wanted to build your own decentralized program, just like Bitcoin, at home. You’d need to understand how Bitcoin’s decentralization works, write code that mimics the same behaviour, get a huge network of computers to run this code and so on…. And that is a lot of work. Enter Ethereum and Ethereum token. Ethereum was first proposed in late 2013 and then brought to life in 2014 by Vitalik Buterin who at the time was the co-founder of Bitcoin Magazine.

Ethereum is the Do It Yourself platform for decentralized programs also known as Dapps – decentralized apps. If you want to create a decentralized program that no single person controls, not even you even though you wrote it, all you have to do is learn the Ethereum programming language called Solidity and begin coding.

The Ethereum platform has thousands of independent computers running it meaning it’s fully decentralized. Once a program is deployed to the Ethereum network these computers, also known as nodes, will make sure it executes as written. Ethereum is the infrastructure for running Dapps worldwide.

It’s not a currency, it’s a platform. The currency used to incentivize the network is called Ether but more on that later. Ethereum’s goal is to truly decentralize the Internet. Wait? The internet is centralized?

I thought the Internet already was decentralized and that anyone can start their own site. While in theory that might be true, in practice Amazon, Google, Facebook, Netflix and other giants control most of the world wide web as we know it. There’s almost no activity on the web that happens without some sort of intermediary or 3rd party.

But once the concept of digital decentralization was demonstrated by Bitcoin, a whole new array of opportunities became available. We can finally start to imagine and design an Internet that connects users directly without the need for a centralized 3rd party.

People can “rent” hard drive space directly to other people and make Dropbox obsolete. Drivers can offer their services directly to passengers and remove “Uber” as the middleman. People can buy cryptocurrencies directly from one another without the need for an exchange that can get hacked or steal your money. Ethereum allows people to connect directly with each other without a central authority to take care of things. It’s a network of computers that together combine into one powerful, decentralized supercomputer.

Ok, So now you know what Ethereum does but we haven’t touched upon HOW it does it. Ethereum’s coding language, Solidity, is used to write “Smart Contracts” that are the logic that runs Dapps. Let me explain…

In real life, all a contract is, is a sets of “Ifs” and “Thens”. Meaning a set of conditions and actions. For example, if I pay my landlord $1500 on the 1st of the month then he lets me use my apartment.

pexels photo 1108313

That’s exactly how smart contracts work on Ethereum. Ethereum developers write the conditions for their program or Dapp and then the ethereum network executes it.

They are called smart contracts because they deal with all of the aspects of the contract – enforcement, management, performance, and payment. For example, if I have a smart contract that is used for paying rent, the landlord doesn’t need to actively collect the money. The contract itself “knows” if the money has been sent. If I indeed sent the money, then I will be able to open my apartment door. If I missed my payment, I will be locked out.

However smart contracts also have their downsides. Going back to my previous example, instead of having to kick out a renter that isn’t paying, a “smart” contract would lock the non-paying renter out of their apartment.

A truly intelligent contract on the other hand, would take into account other factors as well, such as extenuating circumstances, the spirit with which the contract was written and it would also be able to make exceptions if warranted. In other words, it would act like a really good judge. Instead, a “smart contract” in the context of Ethereum is not intelligent at all.

It’s actually uncompromisingly letter strict. It follows the rules down to a T and can’t take any secondary considerations or the “spirit” of the law into account like what commonly happens with real world contracts. Once a smart contract is deployed on the Ethereum network, it cannot be edited or corrected, even by its original author. It’s immutable. The only way to change this contract would be to convince the entire Ethereum network that a change should be made and that’s virtually impossible.

This creates a very serious problem since unlike Bitcoin, Ethereum was built with the ability to create really complex contracts, and complex contracts are very difficult to secure.

With any contract, the more complicated it is, the harder it is to enforce as more room is left for interpretations, or more clauses must be written to deal with contingencies. With smart contracts, security means handling with perfect accuracy every possible way in which a contract could be executed in order to make sure that the contract does only what the author intended. Ethereum launched with the idea that “code is law”. That is, a contract on Ethereum is the ultimate authority and nobody could overrule the contract.

Well, that all came to a crashing halt when the DAO event happened.

“Dow” or DAO stands for “Decentralized Autonomous Organization” which allowed users to deposit money and get returns based on the investments that the DAO made. The decisions themselves would be crowd-sourced and decentralized. The DAO raised $150M in Ethereum currency, ether, when ether was trading around $20. While this all sounded very good, the code wasn’t secured very well and resulted in someone figuring out a way to drain the DAO out of money.

Now you could say that the person who drained the DAO was a “hacker”. But some would argue that this was just someone who was taking advantage of the loopholes he found in the DAO’s smart contract. This isn’t very different than a creative lawyer figuring out a loophole in the current law to effect a positive result for his client.

What happened next is that the Ethereum community decided that code no longer is law and changed the Ethereum rules in order to revert all the money that went into the DAO. In other words, the contract writers and investors did something stupid and the Ethereum developers decided to bail them out.

The small minority that didn’t agree with this move stuck to the original Ethereum Blockchain before its protocol was altered and that’s how Ethereum Classic was born, which is actually the original Ethereum. We’ve covered a lot up until now and the last thing I want to talk about is Ethereum as a currency. We’ve already established that Ethereum is basically a large bunch of computers working together like one super computer to execute code that powers Dapps. However this costs money – Money to get the machines, to power them up, store them and cool them if needed. That’s why Ether was invented.

When people talk about the price of Ethereum they actually are referring to Eth – the currency that incentivizes people to run the Ethereum protocol on their computer.

This is very similar to the way Bitcoin miners get paid for maintaining the Bitcoin blockchain. In order to deploy a smart contract to the Ethereum platform, its author must pay to do so. That payment is made in the form of ether. This is done so that people will write optimized and efficient code and won’t waste the Ethereum network computing power on unnecessary tasks.

Ether was first distributed in Ethereum’s original Initial Coin Offering back in 2014. Back then it cost around 40 cents to buy one Ether. Today, one Eth is valued in hundreds of dollars since the use of the Ethereum network has grown immensely due to the ICO hype that started in 2017. Still Confused? Don’t worry; we’ll get more into Ether and mining in a later video.

Ethereum’s network and Ether are a whole new rabbit hole that we’ll cover but I think this will do for now as an intro to Ethereum. This concludes this week’s episode of Ethereum Whiteboard Tuesday. Hopefully by now you have a better understanding of what Ethereum is – A network of computers working together to replace the centralized model of programs and companies which run the Internet today. You may still have some questions. If so, just leave them in the comment section below.

And if you’re watching this video on YouTube, and enjoy what you’ve seen, don’t forget to hit the like button. Then make sure to subscribe for notifications about new episodes. Thanks for joining me here at http://cryptoswami.net

ethereum news

Cryptocurrency For Dummies

More than 2,000 cryptocurrencies currently exist at the time of
writing. Cryptos gained a lot of mainstream hype, when Bitcoin’s value
explode. This surge was nothing compared to the gains of some other
digital assets.These returns are more than what a stock investor could
normally make in a lifetime, and they generated enough interest to
create a true frenzy.

However, the bubble burst at the beginning of 2018, leaving many late
investors, who bought cryptocurrencies at a very high price, at a loss.
That was enough for some newbie investors to label the whole industry a
scam and either give up on investing altogether or go back to
traditional financial assets like stocks. Regardless, the cryptocurrency
market continued evolving, became more stable, and caught the attention
and support of many major financial institutions globally and in the
United States. As more people get their hands on cryptocurrencies, more
sellers feel comfortable accepting them as a payment method, and that’s
how the whole industry can flourish.

What is blockchain?

Blockchain it’s the infrastructure that cryptocurrencies are built on.

The unique thing about cryptocurrency investing and trading is that a
crypto is a cross between an asset (like stocks) and a currency (like
the U.S. dollar.) Analyzing the fundamentals behind a cryptocurrency is
very different from analyzing any other financial asset. The traditional
ways of measuring value don’t work in the crypto industry, mainly
because in many cases the crypto data isn’t stored in a central hub
somewhere. In fact, most cryptocurrencies and their underlying
blockchain are decentralized, which means no central authority is in
charge. Instead, the power is distributed among the members of any given
blockchain or crypto community.

You may have heard of some of the famous cryptocurrencies, like
Bitcoin, but the industry doesn’t end there far from it. And although
the crypto market has a ton of volatility, it also has potential for you
to make real money by investing wisely and developing strategies that
suit your personal risk tolerance. In this article , I tap into the
risks involved in cryptocurrency investing and show you the different
methods you can use to get involved.

The topic of cryptocurrencies and their underlying blockchain
technology can be a bit confusing. That’s why I try my best to keep
Cryptocurrency  For Dummies easily accessible and relatable and free of
intimidating terminology. But it does contain some serious information
about strategy development, risk management, and the whole industry in
general.

It contains a lot of web addresses to get you additional information
about certain topics. Some of the web addresses are affiliate links,
meaning that if you click them and start using a company’s services
through that specific web address, I may earn an affiliate payment for
making the introduction.

Risks

Just like anything else in life, cryptocurrencies come with their own
baggage of risk. Whether you trade cryptos, invest in them, or simply
hold on to them for the future, you must assess and understand the risks
beforehand. Some of the most talked-about cryptocurrency risks include
their volatility and lack of regulation. Volatility got especially out
of hand in 2017, when the price of most major cryptocurrencies,
including Bitcoin, skyrocketed above 1,000 percent and then came
crashing down. However, as the cryptocurrency hype has calmed down, the
price fluctuations have become more predictable and followed similar
patterns of stocks and other financial assets. Regulations are another
major topic in the industry. The funny thing is that both lack of
regulation and exposure to regulations can turn into risk events for
cryptocurrency investors. I will create a new article talking more in
details about Risks

Cryptocurrency wallets

There are two type of Wallets one Software which is digital one Hardware Wallets.

The digital one most Exchanges offers them but there are others as well.

Good wallet software has more functionality, including the ability to
back up private keys (encrypted with a passphrase) either to a user’s
hard drive or to a cloud storage server somewhere, to generate one-time
use addresses for privacy, to hold addresses and private keys.

The Hardware Wallet

Private keys are stored in chips on small handheld devices. Two
popular hardware wallets are called ‘Trezor’ and ‘Ledger Nano,’ but
there are others.

These devices are specifically designed to store private keys
securely and only respond to certain pre-programmed requests, for
example, ‘Please sign this transaction,’ and not, ‘Show me the private
key you are storing’. Because the private key is stored on hardware that
is not connected to the internet and can communicate with the outside
world only via a limited set of pre-programmed interfaces, it is much
harder for a hacker to gain access to the private keys.

You can’t get involved in the cryptocurrency market without a crypto wallet.

Making a Plan Before You Jump In

You may just want to buy some cryptocurrencies and save them for
their potential growth in the future. Or you may want to become more of
an active investor and buy or sell cryptocurrencies more regularly to
maximize profit and revenue. Regardless, you must have a plan and a
strategy. Even if your transaction is a one-time thing and you don’t
want to hear anything about your crypto assets for the next ten years,
you still must gain the knowledge necessary to determine things like the
following: What to buy, When to buy, How much to buy, When to sell. I
will make an article regarding that.

finance

There are many cryptocurrencies and lots of other tokens on Ethereum, but there are some things that only ETH can do.

Created by Vitalik Buterin, it has scored itself the second spot in
the hierarchy of cryptocurrencies. This digital currency launched in
2015 is predicted to surpass Bitcoin and may be the cryptocurrency of
the future. Is Ethereum similar to Bitcoin? It is in a way, but not
really. Like Bitcoin, Ethereum is a part of a blockchain network.

The main difference between the two currencies is that Bitcoin
blockchain focuses on tracking ownership of the digital currency while
Ethereum blockchain focuses on running the programming code or network.

Instead of having to build an entirely original blockchain for each
new application, Ethereum enables the development of thousands of
different applications in a single platform. In the Ethereum blockchain,
miners work to earn Ether.

Ether is a crypto token that helps run the network. Another use of
the Ethereum blockchain is its ability to decentralize any services that
are centralized.

For instance, Ethereum is capable of decentralizing services like
loans provided by banks, online transactions using Paypal as well as
voting systems and much more. Ethereum can also be used to build a
Decentralized Autonomous Organization (DAO). 14 A DAO is a fully
autonomous organization without a leader.

DAOs are run by programming codes on a collection of smart contracts
written in the Ethereum blockchain. DAO is designed to replace the
structure of a traditional organization and like Bitcoin, eliminating
the need for people and a centralized control. What are the most obvious
benefits of Ethereum? Firstly, a third party cannot make any changes to
the data. The system is also tamper and corruption proof.

This is because Ethereum is built based on a network formed around a
consensus as a result, making censorship impossible. Secondly, just like
Bitcoin, Ethereum is backed up by secure cryptography. Therefore, the
applications are well protected against any form of hacking.

cryptonews

How To Get Free Bitcoin

There are four techniques you can use to get free Bitcoins legally.

1. Play online games

You can find some online and mobile games that reward players in Bitcoins. The only downside is these gaming sites are full of lengthy ads that frequent-ly interrupt the game.
Some casinos accept bitcoins but you will have to spend fiat currency until you win a pot.

2. Perform online services

Some online jobs do pay in bitcoins. Some of these jobs often include taking surveys, testing websites, and retweeting posts. The pay is usually minimal but it is an easy way to get started investing in cryptocurrency.

3. Earn Bitcoins by reading books

A surprising way to earn free bitcoins is by reading classic novels. If you love reading the classics, you might want to consider getting paid to do it with cryp-tocurrency.

4. Write about cryptocurrency

Several websites are looking for writers to add content to their blogs. Just by writing about cryptocurrency, you can get paid in free bitcoins. However, the posts you supply have to be high-quality to be accepted by the website. If the article isn’t accepted, you won’t receive any compensation.