Ethereum (ETH)

Ethereum is a popularised digital asset, Created by Vitalik Buterin. Although it's commonly compared to Bitcoin, the two differ greatly in application. 

Network

The Ethereum network allows developers to create and deploy apps or dApps on the Ethereum Virtual Machine which include a very useful feature called “Smart Contracts.” 

Ether

Ether is the main currency of exchange within the platform, with users having the ability to create their very own, unique ERC20 tokens on the platform, which is why Ethereum is by far the most popular platform to conduct an ICO on.

Company Message

“Ethereum is a decentralized platform for applications that run exactly as programmed without any chance of fraud, censorship or third-party interference.”

Further Explaination

You might be wondering what the difference is between Ethereum and Ether. Although they sound similar they are not synonymous, Ethereum is the network which contains distributed applications and Ether is the token used to pay for the bandwidth used by the applications and is earnt by the miners when processing transactions.

Smart Contracts

A smart contract describes code that has been deployed to the Ethereum network. The code works as any program would, When it is deployed to network the program acts as a self autonomous part of the network. When conditions are met the program fires up and produces an autonomous unbiased result.

We have seen this been used to create casinos such as Edgeless where each game is an application run as a smart contract. It provides for a full transparency and uncheatable system in which players can see the operations and behind the scenes functions of the code.

ERC20 Token Standard

ERC20 allow developers to create new “coins” on the Ethereum Network making it very popular for ICO’s. It is a standard used for smart contracts that make Etherium a preferred option when creating new tokens or coins.

Both of these are ways in which a blockchain can confirm that transactions are valid and honest. Proof of Work validates transactions by solving very complexed problems on the Ethereum network and shows validity of the transaction with the proof of work the computer has put in via a hashing function. Vitalik Buterin has been talking about switching to Proof of Stake as a validation process for the network since Proof of work has issues with scalability and consumes a lot of power even tho it works as a way of utilising the networks processing power there are more effective systems out there.

PoS transition

This is why Vitalik Buterin is working to create Proof of Stake for the Ethereum network. Proof of Stake randomly allocates the creation of the next block to a random stakeholder in the network. Proof of Work creates blocks through the mining process. Ethereum switching to Proof of Stake has been in the works for a while. It was rumored to be released around November last year, and at time of writing Proof of State is still in the works. When this is released the Ethereum network will fork again creating 3 states of Ethereum.

The idea of Ethereum came about in late 2013 in a white paper written by Vitalik Buterin. Vitalik wanted to create a network with a general scripting language for application deployment.

DAO Hack

The DAO hack was an infamous step in Ethereum’s history that happened around 2016. The Decentralised Autonomous Organisation ( A collection of smart contracts ) called the DAO raised 150 Million dollars in crowdfunding. The DAO was exploited and and an anonymous user claimed 50 Millions dollars worth of ether.

This kicked off a debate, whether the network should be rolled back and recover the stolen funds or keep the network the way it is and let the hacker have the funds. The former goes against the fundamental idea that Ethereum is based on. People should not be able to modify the network and so a fork was created. Ethereum and Ethereum Classic. Ethereum classic decided to not roll back the network while Ethereum rolled the network back and forked before the funds were stolen.

The Ethereum Virtual Machine

Programs are used constantly within the Ethereum network, each time a program is used, a complex network of thousands of computers processes it.

Contracts written in a smart contract-specific programming languages are compiled into ‘bytecode’, which a feature called the ‘ethereum virtual machine’ (EVM) can read and execute.

Every node in the network holds a copy of the transaction and smart contract history of the network. Every time an action is performed, all of the nodes on the network need to come to agreement that this change took place.

The goal here is for the decentralized network of miners and nodes to take responsibility for transferring the shift from state to state, rather than a centralized entity like a bank . The EVM executes a contract with whatever rules the developer initially programmed.

General Overview

Ethereum is a network designed to be used for distributed application deployment for both commercial and personal use. Ethereum aims to grow enough to be a common adoption for every enterprise in the near future. 

The structure of the Ethereum blockchain is very similar to that of bitcoin, as both have every transaction avaliable to the public, both present and past. Every node on the network stores a copy of this history. The big difference with ethereum is that its nodes store the most recent state of each smart contract, in addition to all other transactions on the ethereum network. The process is quite more complex than it's description.

For each application on the Ethereum platform, the network keeps information about the current state along with any relevant information like user balance, smart contract code and its storage. Etheruem uses account to track who has how much ether.

Similar to bank account funds, ether tokens appear in a wallet, and users can conduct transactions to another account. 

There are a few more famous people than the man behind Ethereum himself and its creator, Vitalik Buterin. Other than that, Ethereum is a decentralized project with hundreds of independent developers working on its infrastructure, creating dApps and smart contracts.

As far as hardware wallets go, there are two obvious choices- Trezor and Nano Ledger S.

Hardware wallets are also called "cold storage", they are dedicated wallet devices, often in the form of a USB stick. Just plug it in to an internet-enabled device to transfer assets. Even though transactions are made online, the keys are stored offline. Thus, hardware wallets are one of the most secure methods of storing cryptocurrencies, in addition to being portable.

Ledger

As for using the Nano Ledger S, the first step towards setting up your device is unboxing it and checking if you have received all the accessories with the device. Once you have it unboxed, you need to configure it and initialize it before being able to use it. The process is quite simple and will hardly take about 20-30 minutes post which you will be set to use your Ledger Nano S device.

Setup guide video: here

Trezor

As for Trezor, installing is really simple. To properly install it users should attach the unit to the computer. After that continue with installing the  bridge which allows the Trezor to join with the computer. The first step is to connect the Trezor to device’s USB slot with the cable given in the box.  After that, go to myTrezor.com and proceed with installing the browser extension. Trezor can also be used on Android or an iPhone, or on a Windows or Mac computer. Now, initiate the extension and myTrezor will direct you to pick a PIN. After this, you will notice nine buttons but the numbers are hidden. After this, users should check the Trezor’s screen to recognize which numbers are in which place because it switches every time. Now set the PIN. Shortly after, Trezor should present a 24-word wallet “seed”. In short, one word at a time. Note down this seed and save it carefully. If your Trezor device malfunctions or is lost, you can utilize the seed to reconstruct the complete wallet. 

Setup guide video: here

Desktop wallets are one idea safer than online wallets. They're free to use and can only be accessed on the machine they're installed on, that's why they're widely used and universally loved. Ethereum is one of the biggest and well known cryptocurrencies as we said many times before, which automatically translates to being supported by pretty much any desktop wallet provider out there.

Two great choices for desktop wallets would be either Jaxx or Exodus.

Jaxx

What's really great about jaxx.io is  that it doesn’t store the private keys on its servers but on the device of your choosing. Another reason to love Jaxx is the cross platform functionality. It is available on 9 different platforms and can be interlinked with all these platforms which means that the same balances and wallet is available when a different device is being used.

Exodus

Another good example of a desktop wallet that supports Ethereum is Exodus, which supports numerous other cryptocurrencies along with ETH and is pretty straightforward and easy to use. Just download the app from the official site(exodus.io) and get straight into creating your wallet.  Exodus stores your Private Keys on the machine you choose and not on any server, providing you with a relative peace of mind when it comes to the security of your coins. 

MyEtherWallet

Our number one choice when it comes to online wallets is of course MyEtherWallet(MEW). The wallet offers a brilliant combination of speed, trustworthiness and simplicity, making it the most popular online wallet for ether and any ERC20-based tokens.

Simply visit myetherwallet.com and set up your wallet with a method of your choosing, just make sure to store your private key somewhere safe. It's wise to have it written down on paper in case your PC/notebook malfunctions.

The only downside to using an online wallet like MEW is that there are literally hundreds of phishing scams out there to get your eth, so you better double check the address everytime and make sure to watch out for any malicious activity on your browser or PC.

As with any other top cryptocurrency, the are numerous ways to store your ether depending on your risk tolerance and the amount you're holding. As always, it is recommended you do not store any excessive amounts in an exchange, as you have no hold of your private key. Also, many exchanges suffer from security breaches or you may become a victim of one of the many phishing scams that come in various forms like emails or an exact replica of the exchange's front end. It's important to note that ether is the most prevalent currency when it comes to scams, with tonnes of fake twitter profiles, fake sites and many others all trying to rip you off from your currency.

Being the second most popular cryptocurrency, it's needles to say that there are multiple ways to obtain it. Coinbase and Coinmama are the two most popular exchanges to obtain ether with fiat currency. You can either use a credit/debit card or with a bank transfer.

Coinmama

Coinmama is a renown worldwide exchange for Ethereum and other cryptocurrencies that has been working in the cryptospace since 2014. The site allows you to buy Ethereum with your credit card or SEPA transfer if you live inside the EU. Exchange rates are relatively fair especially if you use SEPA transfers.

Coinbase

Coinbase is a convenient and cheap way to buy Ethereum (if avaliable in your country). Coinbase will charge a fee of between 1.49% and 3.99% depending on your payment method (credit cards have a higher fee than wire transfers). The buying process itself is very simple. Just create and account and add your payment method, then go to the Buy/Sell section and simply input the amount you wish to buy.

Exchanges

Either way these two are the easiest and quickest ways to get your hands on some ether, however there's also the alternative of exchanging another cryptocurrency for it on an exchange like Bittrex or Binance.