All you need to know about Ethereum

After the launch of NFT’s, Ethereum has received even more traction. Although, Ethereum was a rock-star ever since it was launched. In this short guide we will cover what is Ethereum, how it works and what are the Ethereum killers. After reading this guide, you will develop a fair amount of knowledge on the nitty-gritty of Ethereum Network.

So let’s get started.

What is Ethereum?

Just like Bitcoin, Ethereum is another peer-to-peer network driven by many connected computers across the globe. What makes Ethereum blockchain different from others is it’s programmable nature. Ethereum allows it’s users to run pretty much any code they would like to. This code is then stored on the blockchain for other users to interact with. More technically, this is called smart contract.

The Ethereum Virtual Machine (EVM)

Interestingly, unlike Bitcoin nodes which only maintain and update the blockchain. Ethereum nodes also run Ethereum Virtual Machine (EVM) – a supercomputer which combines all of the computing power in the network. This computing power is used to run the user-submitted code otherwise known as smart contracts.

To smoothly run these operations and incentivize nodes, the EVM charges a small amount of Ether also known as gas against the computational power used by these smart contracts.

Understanding Ethereum smart contracts

Smart contracts, a term initially coined by Nick Szabo, is simply a program that runs on the ethereum blockchain. It’s basically a computer program stored on ethereum blockchain to run our traditional contracts into digital parallels. They are more like Ethereum accounts with a balance but uncontrolled by a user instead a pre-coded program runs it.

In simple words, they are digital contracts automatically executed by the code when certain conditions are met.

Decentralized Applications

What are Dapps? Dapps are decentralized applications. They are a more complex version of many smart contracts together working in cohesion. In simple words, it’s just like any other software application. The only difference is that they run on a decentralized network i.e; Blockchain.

When you’re developing your own Ethereum smart contracts, you’re actually writing a piece of the back-end code for your Dapp. And while your Dapp will have a user interface like a traditional app, either all or part of the back-end is built on top of Ethereum.

Dapp = front-end + smart contract back-end

What are Tokens?

Tokens are digital assets built on top of the Ethereum blockchain for the purpose of governance on a particular Dapp. If one had to create their own token, they will have to go through building a complete blockchain. Ethereum solves that issue by letting you run your own code, building a dapp and issuing a token. Thus, you can benefit from the existing infrastructure of Ethereum, saving time and resources.

Once created these tokens are often issued to public via Initial Coin Offerings (ICO’s). These tokens can be issued against Bitcoin, Ethereum or Fiat money.

What is Ethereum mining?

Ethereum network needs a global system of computers to compile and verify each batch of transactions (i.e; blocks) within the blockchain. These computers (also known as nodes), use the computing power of dedicated hardware to solve complex puzzles. This process not only allows the ethereum network to function but also protects it from hacking and other malicious attacks. In exchange for their services, miners receive a transaction fee — a predetermined amount of ether once a valid block is found.

This whole process of transaction validation and block exploration is known as mining.

How to mine Ethereum?

There are many methods to mine ethereum. We will take a look at each of them.

Pool mining: Mining ethereum with a pool is the easiest and simplest way. There are different online services which let’s many individuals to use their hashing power collectively and solve cryptographic puzzles. The rewards are later on shared according to your hashing power contribution.

Cloud mining: This is a service against pay. All you need to do is to find a cloud mining service and pay them. They will do all the hassle on your behalf while you receive your minted coins. In cloud mining, you don’t need to buy any equipment or dedicate your time.

Solo Mining: Solo mining is where you do all the hardwork. You will have to buy powerful GPUs and setup your own node. All you need to do is to take care of he electricity bill, equipment and maintenance. In return, you keep all the rewards. For successful mining of Ethereum you will require powerful mining rigs.

How to mine?

1. Create Ethereu wallet (Metamask or myetherwallet)
2. Update your GPU drivers to the latest versions
3. Install Ethereum mining software (Claymore etc)
4. Choose a mining pool. (There are many. Make a google search and choose the one with the best fee’s & service)
5. Collect your rewards.

Original link: Your go to Crypto place