On Ethereum, Wallets and Mining

What is Ethereum?

Ethereum is an open-sourced blockchain cryptocurrency founded by Gavin Wood and Vitalik Buterin.

The company was officially released on July 30, 2015.

Buterin was originally a programmer and co-founder of the Bitcoin Magazine which explains the Bitcoin influences integrated within the creation.

The early development funding was provided by a crowdscale online in 2014. The rest of the project was financed by Gavin Wood himself, Charles Hoskinson, and Anthony Di Lorio; unfortunately, a few years later Hoskinson left the project.

The name Ethereum was inspired by science fiction and articles about elements that Buterin was exploring during that time.

The Ethereum Growth

Since Ethereum’s initial release the company has become the second-largest cryptocurrency following closely behind Bitcoin according to statistics gathered in 2019.

Ethereum is used to trade digital currency, run applications and monetize work.

Ethereum was originally a single open-sourced blockchain system but the exploitation of a flaw founded in the DAO Smart Contract resulted in the theft of $50 million during 2016.

This breach caused Ethereum to be split into 2 blockchains Ethereum (ETH) and Ethereum Classic (ETC).

Although there is a 2 blockchain system, Ethereum mining has a Microsoft partnership with ConsenSys to provide the clients and developers with a single blockchain click environment.

Ethereum mining requires a place to securely store Ether known as Ethereum Wallet and the 4 different types.

Various Ethereum Wallets

Desktop Wallets: runs on PC or laptop allowing clients to store an entire copy of Ethereum blockchains. This wallet takes days to process transactions and will only increase as Ethereum grows. The only pitfall is that desktop wallets require to stay in constant sync.

Mobile Wallets: requires fewer data. This wallet doesn’t require full Ethereum clients to trust in miners to send accurate information.

Private keys are harder to hack and store large holdings thus makes it more convenient and easier to use rather than the other.

Unfortunately, this isn’t the safest route.

Hardware Wallets: are small. They have the ability to be detached from the internet. You have the ability to sign transactions offline although it is difficult to use Ether on the move.

Paper Wallets: you are able to print or hand write private key on paper. The online tools generate key pairing directly on the computer and if left vulnerable it is capable of being hacked.

Keys are generated using a command line and cryptographic packages. It is recommended to create multiple copies and store in secure various locations.

How to obtain Ethereum?

Ethereum is purchased directly with money or Bitcoin which generally requires a signup process.

It requires identification numbers similar to debit funds. 2 main identification components are public and private keys which are a series of numbers and letters linked by cryptography.

The public key is generally used to send money to others. In order to receive coins, you must have an address for them to send it to. To spend your Ether you must sign over funds using your private key.

Smart Contracts

Ethereum users create and join smart contracts to eliminate the need for relying on a 3rd party. Smart Contracts can create decentralized applications.

Smart Contract was conceived in 1993 by computer scientist and cryptographer Nick Szabo. Smart contracts function as multi-signature accounts, manage agreements between users, utility to other contracts and store information about the application.

Ethereum’s main concern is its safety and the safety of its clients especially after its previous encounters. But although it is focused on safety, clients should still be mindful of their investments and the private information they have in order to access these accounts.

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