What is Ethereum
Many people are aware of the cryptocurrency world; many are familiar with the term, Bitcoin. But if you are one, then Ethereum will not be so foreign to you. If you are not aware, no need to worry, see this as your guide to the internet world where transactions are carried out without cash as the currency.
Ethereum is a decentralized (open source, public) blockchain-based computing forum for money and new forms of applications featuring it affords you the opportunity to write codes that can monitor and control money and also develop applications that are accessible anywhere around the globe.
In order to avoid confusion, this article will make an effort to distinguish between Bitcoin and Ethereum, there are some similarities but also there are qualities unique to each; Bitcoin and Ethereum is a distributed public block-chain network, Bitcoin proffers one particular application of block-chain technology (peer-to-peer electronic cash system that facilitates online Bitcoin payments) and is used to monitor and track ownership of bitcoins while Ethereum is concentrated on running of program codes on any decentralized application. As in the case of bitcoin, it is mined but for Ethereum, miners work to earn Ether which is the crypto token that is used in the Ethereum network. Ether is also used to develop applications in paying for transaction fees and services using the Ethereum system. There is also another token in this system known as ‘Gas’ which is also used to pay the miners’ fees.
There are Four important features of Ethereum that make the concept easier to grasp:
- An online platform where transactions and payments are built in.
- An online platform where everyone has the right to use to an open financial system.
- An online platform where users can own their data and build their own applications that are lock-sure.
- An online platform controlled by no company or owned by a single person; it is built on impartial, open –access structure.
Ethereum was proposed in late 2013 by Vitalik Buterin, a cryptocurrency researcher and programmer and then launched on 30th July 2015. Development was funded by an online crowdsale that took place between July and August 2014.
Smart Contract in Ethereum Mining
Smart Contract is a phrase used to define a computer code that can enable the interchange of money, content, property, shares, or anything of worth. When running on the blockchain, a smart contract turns out to be just like a self-operating computer program that mechanically implements when precise conditions are in place. Due to the fact that smart contracts run on the blockchain, they operate just as programmed devoid of any likelihood of downtime, fraud, censorship or third-party interference. This is evidenced by a quote from Don Tapscott which states that Ethereum] blockchain has some extraordinary capabilities. One of them is that you can build smart contracts. It’s kind of what it sounds like. It’s a contract that self-executes and the contract handles the enforcement, the management, performance, and payment”
Ethereum is not limited in the ability to process several codes as compared to other blockchains. It allows developers to create and develop their unique operations instead of limiting them to a provided set of codes. This implies that developers can build thousands of various applications that are beyond anything that exists before and this trend is fast moving in the internet world.
Step-by-Step Mining Process
Ethereum mining is the practice of sustaining the Ethereum ledger through deciphering multifarious mathematical problems in a bid to win Ether. In other words, the internet will not reach a consensus about the authenticity of a notebook (if a note is included or excluded) if the computational power to process the proposed changes is not put in place. All you need to start is a Graphical Processing Unit (GPU) as it boasts of a higher hash rate and can solve puzzles more quickly than CPUs. It is also the only option presently for ether miners. The GPU to make use of should be one of the high likelihood of profitability based on hash rate performance, starting expense of the card and power consumption.
Mining profitability calculators indicate the probable sum of ether you’ll make at a specified hash rate, and if that ether is sufficient, when fixed against setup and electricity expenses, to make a profit. In contrast to bitcoin, powerful and fast ethereum ASICs aren’t available right now. After picking out some mining hardware, the next step is to install the mining software.
To start with, it is required that miners install a client to connect to the network. Programmers acquainted with the command line can install ‘geth’, which operates an ethereum node written in the scripting language ‘Go’, or any of a number of clients.
Easy Steps to Mining Ethereum
- Step 1: Install your GPUs and set up your computer
- Step 2: Get an Ethereum wallet (preferably MyEtherWallet)
- Step 3: Join an Ethereum mining pool
- Step 4: Start Mining.
As earlier said, Bitcoin and Ethereum are similar in some ways and one of which is mining. The only means of updating a new block of Ethereum transactions is by mining the block, Ethereum blocks are added every 15 seconds approximately while Bitcoin blocks take 10 minutes to be added approximately. Users thereby, receive 2 ETH as a reward with all transactions made and code-processing fees like ‘Gas’ included in their block. Also, Ethereum uses a hashing algorithm known as Ethash which is different from Bitcoin’s hascash.
Reasons to mine Ethereum
- Ethereum can be easily traded for Bitcoins, therefore, it is a cheap way to gradually develop a holding position in Bitcoin.
- Mining is a great way to maximize profits in the cryptocurrency market because Etherum is well accepted for its high volatility rate. It's mining, therefore, is considered as an easy entrance into the cryptocurrency world.
- Major exchanges such as Coinbase, Gemini, CEX, Kraken amongst others accept ETH as a direct payment or exchange for cash.
- Having a solid position in the Etherum Mining system will give you the upper hand when it moves from the Proof of Work mining phase to Proof of stake mining phase.