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A Beginner’s Guide To Ethereum And Its Applications (pt. 1)

August 6, 2020

A Beginner’s Guide To Ethereum And Its Applications (pt. 1)

The post-Bitcoin era has seen the birth of several crypto-projects, including Ethereum, with goals ranging from purely tech advancements to to-the-moon aspirations.

As this whole scene is still at an embryonic stage, and, fancy terminology can be found in every corner of these projects, a beginner might have a hard way of introducing him/herself to it. And, if the goal is for laypeople to get more and more involved towards embracing a web3 future, this is – or should be – unwanted.

Given that your average blockchain-based project includes a whitepaper stating its goals, a native cryptocurrency, and some well-polished view of the(ir) future, it might be hard for a newcomer to even know where to start from, let alone personally benefiting from it!

Read More: An Overview of Digital Currencies’ Regulatory Landscape in 2019

Ethereum Is The Fastest Growing Crypto Community

As a recent article nicely explained, there are all kinds of crypto communities out there, each having different approaches and standards with regard to their principles, goals, and friendliness. And a community’s identity is important as most projects are dependent on their communities.

So, from a crypto-newbie’s point of view who is trying to get familiar with the world of cryptos, after getting attracted to a certain concept that is put forward by the project, I would first check the community – and, specifically, its character.

For the time being, the Ethereum foundation might be the most suitable project to get started with (and not only), as it has the largest, most active user community as well as some intriguing and promising tech involved.

In this guide, I will get you through the Ethereum Foundation, introduce you to its concept, and lay down the different possibilities it’s offering, as well as the several ways that you can interact with it, either as an uninformed individual or a veteran crypto tech guy. So, let’s get started right away!

Riding the way that Bitcoin opened, Ethereum is a blockchain-based platform running on a distributed ledger – that means it is decentralized by nature. On top of that, it is open-source, public, and global – so, not controlled or owned by anyone. But, don’t get excited yet.

Ethereum is the world’s leading programmable blockchain, allowing the possibility for the definition and execution of smart contracts on its blockchain. In simple words, you (or anyone) can write code that, based on its protocol, will be assigned to a digital asset, will run always as programmed and will be accessible by anyone, anywhere in the world.

Read More: EY: Avoid Private Blockchains, Use Ethereum Instead

You Don’t Have To Be A Programmer To Jump On Ether

Of course, not everyone is keen on casually writing some code, so as a user you can just utilize any smart contract that runs on Ethereum’s blockchain, which is usually manifested as decentralized applications (dapps). A ‘dapp’ is a powerful combo of the benefits offered by cryptography and blockchain tech; it is decentralized (so, no middleman managing your data here) and trustworthy, as once it gets uploaded to the blockchain, it keeps on running as programmed.

Many of these dapps can already be used today offering a wide range of possibilities, from playing games to investing in decentralized markets. But more on this in part 2!

As in most blockchains, every transaction within the network requires a ‘fee’ or gas. In Ethereum, the native cryptocurrency is called Ether (ETH) – Ether and Ethereum are two terms you might need to get straight by the way. ETH is the cryptocurrency generated by the platform as a reward to mining nodes for performed computations and is the only currency accepted in the payment of transaction fees.

You can use ETH to make payments, as a store of value or as collateral. But, how can you get some ETH? Well, you should either mine it or buy it from an individual owner in exchange for fiat/other cryptos. In case ‘mining’ leaves you clueless, the second can be done through crypto exchanges, such as Binance, Coinbase, Kraken, Gemini, Dether, etc.

Most of these exchanges have limited payment methods and require a personal account where some of your personal details have to be mentioned, while others offer more anonymous possibilities, even in-person cash trades. Again, more on this in part 2!

Being an open-source decentralized platform, Ethereum’s maintenance and improvements occur via a global community of contributors. Overall, you can use Ethereum as an individual, as a developer or even as an enterprise.