What is Ethereum (ETH)?
Ethereum is a blockchain known for supporting smart contracts. Its open-source and decentralized platform allows developers to program smart contracts. This makes it possible to build and run decentralized applications, abbreviated as dApps, on Ethereum.
The smart contracts can be compared to digital contracts. The execution of these smart contracts happens completely automatically when the smart contract notices that the predetermined conditions are met. This eliminates the need for an intermediary to perform certain actions. Products and services can be executed decentrally on the blockchain since the advent of smart contracts, leading to the advent of DeFi (Decentralized Finance).
Ether, abbreviated as ETH, is Ethereum's cryptocurrency. ETH is a utility token used to reward validators. Anyone who wants to make a transaction on Ethereum pays their transaction fees with Ether. Thus, it is possible to stake Ether.
What can you use Ethereum (ETH) for?
You can use Ethereum for the development of dApps. In that case, you can use the Ethereum Virtual Machine (EVM). Within the EVM, you will find a special Software Development Kit (SDK). This kit makes it easier to develop applications with Solidity, Ethereum's programming language.
You can also use Ethereum when you want to stake crypto, because the network uses Proof-of-Stake for validation of transactions. This makes Ethereum suitable for earning a passive income.
But above all, use Ethereum for all its applications. Many developers have used their application on Ethereum. This has made you find games, gambling websites, lending and borrowing platforms, insurance platforms, etc. on Ethereum.
When you want to use the dApps on Ethereum, you need an external Ethereum wallet, such as Metamask. You link this wallet via your browser to the application you want to use. You often need the native token of the application you want to use to deploy the dApp. You can also send Ether to other users from your wallet. You pay the transaction fees, called gas fees in this case, with Ether. Therefore, it is important that you always have Ether in your wallet when you want to conduct transactions on Ethereum.
How does Ethereum work?
The Ethereum network uses Proof-of-Stake as its consensus mechanism. Before that, it used Proof-of-Work. However, the Ethereum 2.0 upgrade, which began in 2021, caused a change in consensus mechanism. The high transaction costs and long processing times were the reason for this switch.
Anyone can develop an application on Ethereum. This is because the blockchain is open-source. To develop applications, you pay Ether. The nodes in Ethereum's network then take care of hosting the applications. They also process all transactions performed by users.
Can you stake Ethereum?
Because Ethereum uses Proof-of-Stake, you can stake Ether. By staking ETH, you contribute to the security of Ethereum and help create new blocks. You don't have to set up a validator node yourself for this, because you can also outsource your stake to another validator. You can do that at Coinmerce, for example.
Ether (ETH) cryptocurrency
Ether (ETH) is the cryptocurrency and utility token of Ethereum. People see Ether as the fuel of Ethereum, because without this cryptocurrency, the blockchain would not work. Validators use Ether for staking. Revenue comes from the transaction fees users pay when they make a transaction.
There is no maximum supply of Ether, but there is currently a total supply of 120,527,651 Ether, all of which are in circulation. Some 83.33% of Ether is publicly traded, while 16.68% is owned by the Ethereum Foundation and team members.
During the Ethereum 2.0 upgrade, a large number of tokens were burned, which is called a token burn. Reason was to reduce the number of Ether in circulation.
Ethereum vs Bitcoin
Ethereum is often compared to Bitcoin. Despite the many similarities, there are major differences between these two cryptocurrencies. Let's take a look at the main differences between ETH and BTC:
Ethereum uses Proof-of-Stake (PoS) as its consensus mechanism, while Bitcoin uses the Proof-of-Work (PoW) algorithm.
Bitcoin is a digital currency, while Ethereum is a blockchain for developing decentralized applications (dApps).
Ethereum was developed for programming smart contracts, while Bitcoin is not optimized for this.
BTC is mainly used as a payment method or for value storage, while ETH is used for using all applications and protocols on Ethereum.
You can earn ETH with staking, while you can only earn BTC with mining.
Where to buy Ethereum (ETH)?
Do you want to buy Ethereum (ETH)? At Coinmerce you buy Ether crypto with iDEAL, SEPA, Bancontact, Giropay, MyBank, Coinmerce Coins and credit card (Mastercard and Visa). So buy Ethereum in the Netherlands and Belgium at Coinmerce.
It is possible to buy Ethereum crypto coins with a market order, stop limit order or repeating order. This makes Ethereum an ideal platform for both the novice and advanced crypto trader.
You need an account with Coinmerce to buy Ethereum (ETH). This is where you create an account with Coinmerce.
In which crypto wallet to store Ethereum (ETH)?
You store Ethereum (ETH) in an Ethereum crypto wallet. Metamask is a well-known crypto wallet for storing Ether and ERC20 tokens, but is not the most secure choice. When you buy Ethereum from Coinmerce, you can store your ETH tokens in your personal Coinmerce wallet.
It is also possible to store Ethereum in a hardware wallet. For example, Ledger and Trezor cold wallets offer support for Ethereum. You can send Ethereum from Coinmerce to a cold wallet after validating the wallet address. You do this within your Coinmerce account.