Ethereum – Definition, Benefits and How it Works

Crypto or cryptocurrency investment is a type of investment that offers high returns . Cryptocurrency itself is a digital currency that only exists and can be used in cyberspace. Crypto investment, especially bitcoin was first introduced by Satoshi Nakamoto in January 2009.

Cryptocurrency is a digital or virtual currency that is guaranteed by cryptography . With the existence of cryptography , making crypto currency almost impossible to counterfeit. Cryptocurrencies can also be used for transactions such as payments or transfers from one person to another online.

In addition, cryptocurrency can also be used as a means of payment for online purchase transactions by being exchanged for other currencies such as Dollars, Yen, Rupiah and other currencies.

Used for various transactions, such as purchasing game services and accessories to shopping for other things such as goods to wear. From there, buying and selling bitcoins became more widespread and popular until other cryptocurrencies emerged. One of them is Ethereum.

So what is Ethereum?

Understanding Ethereum

Ethereum

Ethereum is a decentralized software platform that allows Smart Contracts and Distributed Applications (DApps) to be built and run without downtime , fraud, control, or interference from third parties. This definition is contained in the book Digital Economics and Business.

While ether is a crypto currency that comes from the open-source blockchain – based , Ethereum. Ethereum is a decentralized software platform that also created the cryptocurrency Ether (ETH).

Ethereum is a major project started by Vitalik Buterin in 2013. The first Ethereum block was created on July 30, 2015. Ether is the token unit of the Ethereum platform.

The Ethereum cryptocurrency type has a smart contract feature that is useful for ensuring integrity across all nodes. Each code on one node, executed the same way on all nodes. This allows Ethereum to spread various applications.

In addition, Ethereum can be used to change the way securities trade because it allows more developments that generate various digital money creativity.

Advantages of Ethereum

As one of the most popular digital currencies, of course Ethereum has several advantages that make it a favorite currency among crypto investors and traders. Here are some of the advantages:

1. Fitur Smart Contract

Ethereum provides a Smart Contract feature that is executed automatically. Smart Contracts are in charge of binding agreements between a number of parties. Once the contract has been made, its contents can no longer be changed.

The existence of Smart Contracts makes Ethereum not only suitable for use in the cryptocurrency environment, but can also be applied to other sectors such as supply chain management.

2. Liquid Investment Assets

You could say that Ethereum is a liquid investment asset thanks to the existence of exchanges, trading platforms, and online brokers around the world. With a simple process, owners can exchange Ethereum into gold or cash.

3. DeFi Technology

Entering the Ethereum 2.0 ecosystem, this network will use DeFi, which is a decentralized finance technology so that it can create an open financial system for users.

The term refers to a peer-to-peer cryptocurrency platform that facilitates lending outside of traditional banking institutions. Many sites run on the ethereum network, using open source code with an algorithm that sets rates in real terms based on supply and demand.

How Ethereum Works

Interested in playing crypto with the digital currency Ethereum?

Before buying Ethereum crypto assets, it’s a good idea to know how the following Ethereum works, so that the Ethereum crypto investment or trading process becomes more efficient.

1. Implementing a Decentralized Transaction System

Ethereum digital currency uses the concept of decentralized transactions or decentralized applications (DApps).

Ethereum works as a platform where later everyone can upload code called smart contracts. So, anyone can issue smart contacts and send transactions.

That is, Ethereum and smart contracts are like computer programs that run automatically according to the orders contained in the contract. The use of this smart contract feature tends to be cheaper to execute and safer, because there is no supervisor in the program.

2. Using Blockchain Technology

Just like other digital currencies, Ethereum also uses blockchain technology. With blockchain , all Ethereum transactions will be verified and recorded on a transparent and secure public ledger or ledger.

3. Ethereum Mining

To be traded, this Ether or ETH currency must go through a mining process, the process of adding transactions to the blockchain so that everyone can approve the series of transactions. This ETH as a digital currency can be used to transact or to invest.

How to Register an Ethereum Wallet

To be able to buy and transact Ethereum you have to register an Ethereum wallet. An Ethereum wallet is an application that allows you to interact with your Ethereum account. Think of it like an internet banking application.

An Ethereum wallet lets you read balances, send transactions, and connect to apps. Your wallet is just a tool for managing Ethereum accounts. Here are the steps to create an Ethereum wallet:

  • Download the Ethereum wallet application from Google PlayStore or AppStore such as Jaxx, Indodax, Coinbase and so on.
  • Open the app then click the “create new wallet” option
  • Then create a password with a combination of letters, numbers, and symbols to make it as strong as possible.
  • Then click “create a new wallet”
  • Download the keystore to get the private key (Keystore is used to open your wallet, keep the Private Key in a safe and easy to remember place.)
  • Save your keystore file in a safe location and click continue.
  • Save the private key and don’t forget to write it down in a safe place, either on your cellphone or in a notebook because there is no other alternative to restore your account password if you suddenly forget it.
  • Use the private key or keystore file to open the wallet. Select and paste the private key or upload the keystore file to unlock your wallet.
  • Wallets for Ethereum assets are now available.

How to Get Ethereum

After having a place to store Ethereum, then how do I get Ethereum? Here are some ways to get Ethereum:

1. Mining Ethereum

Mining Ethereum is creating new ether coins and keeping records of all digital money transactions. Mining is carried out with sophisticated computer equipment by verifying and adding to all ether transactions in a public ledger.

2. Faucet

Basically, Ethereum faucets work the same way as bitcoin faucets. The difference is, users get rewards in the form of ETH tokens. Some of the tasks given are completing captcha , mining data, watching ads to playing games.

3. Games

You can use games to get Ethereum you know! Games that use Ethereum and are quite popular, one of which is cryptokitties.

4. Airdrop/Bounty

The Airdrop/Bounty program is the favorite choice of traders to get Ethereum, apart from being easy and simple, the amount of Ethereum offered is also decent. Bounties in digital terms are taken from online gaming platforms that offer rewards for participating in game development.

5. Buy Ethereum

How to buy ethereum can be through the Exchange or Exchange. Exchange itself is a kind of market for various types of cryptocurrencies (crypto currencies). The method is as follows:

  • Create an account on Exchange online.
  • Identity verification.
  • Depositing fiat money (dollars or rupiah).
  • Start trading through the exchange.
  • Withdraw ETH or money to ETH wallet.
  • After completing the registration and verification / the account is ready. Then you can buy and sell any crypto, including Ethereum (ETH).

Buying and selling Ethereum is also quite easy, just select the asset and determine how much you want to buy. Finally click buy and to sell also vice versa.

Be Careful with Investment Risks so You Can Maximize Money

There is no investment without risk. Likewise with crypto investments. The risk of cryptocurrency itself is highly volatile, minimal regulation and the threat of cyber crime is quite high.

However, this risk can be minimized if you use an investment platform that is supervised by the OJK and has obtained permission from CoFTRA (Commodity Futures Trading Supervisory Agency). The point is that whatever type of online investment you want to pursue, the main thing is to ensure the legality of the investment platform to avoid fraud.

 

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