Ethereum (ETH): 5 fundamental points that you absolutely must know before thinking about investing in ETH

Inspired by the Bitcoin blockchain, but nevertheless very different in its philosophy, Ethereum is a programmable and open source blockchain with its own cryptocurrency: Ether (ETH). It is now the second largest cryptocurrency in the world in terms of capitalization, representing around 20% of the market.

Ethereum (ETH): the essentials to know

1 – What is Ethereum (ETH) crypto?

  • Basic principle : Created in 2015 by Vitalik Buterin, a young Russian-Canadian programmer, the Ethereum platform is a decentralized virtual network that allows the development of decentralized applications, called “Dapps. As with Bitcoin, this protocol has its own token, which is called Ether. When talking about cryptocurrency, what is called Ethereum actually refers to Ether (ETH).
  • Functioning : Unlike Bitcoin, which is only focused on peer-to-peer payment, Ethereum allows thousands of developers to build applications (more than 3000 today) in various fields: finance, real estate, entertainment, etc. No central authority is necessary to operate these Dapps, which makes it possible to do without the giants who reign supreme over the servers, and in particular the GAFAM (Google, Apple, Facebook, Amazon, Microsoft).

2 – The project and the blockchain behind Ethereum

  • Project : Like Bitcoin, Ether exists as part of an autonomous peer-to-peer financial system, free from oligarchic control. Of all the cryptocurrencies, Ether seems the most likely to compete with Bitcoin as a major cryptocurrency. Nevertheless, there remains a major difference: their emission. In all, there will only be 21 million tokens for Bitcoin, while for Ether, there is no limit.
  • Blockchain: To ensure total decentralization, Ethereum uses a virtual machine (Ethereum Virtual Machine or EVM) running on each of the existing nodes within the network. Its unit of account, Ether, aims to remunerate validators, also known as miners, who guarantee the validity of the chain. Ether is also used to pay Dapps fees

3 – Analysis and opinion on Ethereum (ETH)

The +:

  • Ethereum is open source, which means that it is possible for programmers to create various decentralized applications.
  • It is one of the most active blockchains, with a much more active ecosystem than that of Bitcoin, and constantly innovating.
  • Similar transactions are processed faster on the Ethereum network than on the Bitcoin network (15 seconds, compared to more than 10 minutes).

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The –

  • Security vulnerabilities regularly put the network at risk, despite recent more robust updates that have strengthened the network.
  • First-generation smart contracts suffer from a real scalability problem.
  • Planned for many years, the passage of Ethereum to the “proof of stake” is accumulating delays. It is now expected for this summer.
  • It is impossible to modify a Dapps, or smart contract, which contains a flaw.

4 – How to earn or mine Ethereum (ETH)?

There are various ways to obtain Ethereum cryptocurrency. In addition to direct purchase via online brokers (eToro, Binance, Coinbase, Kraken etc.), the provision of computing power makes it possible to mine the cryptocurrency and obtain a reward in the form of ETH.

It is possible to mine solo, or via a mining pool, by sharing the rewards obtained. The Ethermine Mining platform is renowned for being one of the most intuitive, efficient and easy to use for mining ETH. For the past few months, the broker Binance has also been offering mining pools at reduced fees (0.5%).

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