Ethereum (ETH): what is it, overview of the cryptocurrency and platform, price and ETH rate chart

Ethereum (ETH) — a platform for creating decentralized applications (smart contracts or smart contracts) on the blockchain. It has diverse applications in many areas, but among the main ones are use as a cryptocurrency, writing smart contracts, and conducting ICOs. The editors of Profinvestment.com will try to understand in detail what Ethereum is, why it is needed, the principle of operation and will talk about the process of obtaining the ETH cryptocurrency.

The Ethereum project started in 2014; money for the development of the platform was collected through the Initial Coin Offering process. A total of 31,549 BTC were collected through the token sale. The project was successful, so investors made good money. One of the founders is a Canadian with Russian roots - V. Buterin.

The cryptocurrency Ethereum (eng. Ethereum, short symbol ETH) or, as it is also called, simply Ether, is the second most capitalized after Bitcoin. It is the internal currency of the platform. The market value (capitalization) of coins as of December 17, 2021 is more than $465 billion, which is almost 20%; cost of 1 ETH = 3920 USD. Traded on almost all crypto exchanges, including Binance, EXMO, Currency.com, OKEx, Huobi, Bybit, Cex.io, FTX.

Unlike Bitcoin, Ether has unlimited emission, although the annual number of new coins is 18 million. The number of coins already issued is more than 103 million ETH. Compared to Bitcoin, it has faster transaction confirmation times on the network. According to the developers, Ethereum does not compete with Bitcoin, but complements it in the digital ecosystem.

Characteristics

Name	Ethereum (Russian: Ethereum)
Ticker	ETH
Type	Cryptocurrency
Market capitalization	465 616 504 841 $
Well	$3920
Current issue	118,778,182 ETH
Maximum emission	Not limited
Consensus algorithm	Proof of Work
Mining algorithm	Ethash
Number of transactions per second	15
Time to process one block	0,25
Website	https://www.ethereum.org/
CEO	Vitalik Buterin
Blockchain Explorer	https://etherscan.io/
Twitter	https://twitter.com/ethereum
Cryptocurrency exchanges	EXMO, Binance, Currency, Bybit, Gate.io, Huobi Global, etc.
Launch year	2014

What will happen when Ethereum 2.0 comes out?

Buterin called mining, which requires huge amounts of energy, one of the serious disadvantages of Bitcoin. It got to the point that the total electricity consumption by miners exceeded the needs of a small European country. So far, the PoW consensus algorithm is used, which requires serious power to mine ether.

Hashrate ownership statistics

PoW also has one more drawback - a 51% attack potentially becomes possible. Currently, the top 3 pools own a combined hashrate of 62.1% of the total network hashrate. In theory, by uniting, they can control the network.

PoS is good because mining will be carried out essentially by wallets. That is, nodes that own a certain amount of ether (above the minimum allowable value) will act as validators. The power of the equipment will not play any role in coin mining.

The likelihood of a double spend attack is reduced to zero. Vlad Zamfir in the Casper protocol solved this drawback due to the fact that the attacker loses his money during the attack. So the very point of carrying out such attacks disappears. Miners will place bets with their ether, and if they attempt a Nothing to Stake attack, the bet will simply be burned.

The movement towards PoS began back in 2014 and there is every chance that the Casper protocol will finally be fully completed in 2019. It is being implemented in stages:

• Casper FFG is a kind of hybrid of PoS and PoW. The bulk of blocks are mined using PoW, but every 50th block is obtained through PoS and this cannot be changed;
• CBC (Ghost) – pure PoS with Nothing to Stake protection.

The protocol looks promising. The introduction of PoS will bring Ethereum closer to what Buterin originally intended it to be. In addition, there will be no speculation on the part of ASIC manufacturers, which will remove part of the speculative component from the course.

Ethereum wallet for storing cryptocurrency

Before purchasing Ether, you need to create an Ethereum wallet to store them securely. There are several ways for this purpose, but before making a large purchase or transfer of ether coins, be sure to check their functionality by entering a small amount and do not forget about the safety of passwords and keys:

• Download the EthereumWallet client program from the official website of the platform developers: ethereum.org.

It is used to store the Ethereum cryptocurrency and other ERC-20 coins created in the Ethereum application. For each operating system and its bit level there is its own version of the EthereumWallet program. After downloading the archive to your computer, unpack it into the desired folder and run it.

After launching the program, the synchronization process with the Ethereum network will begin, and information on all transactions will be downloaded. The process is lengthy and takes several hours. You also need a lot of free space on your computer - several tens of Gigabytes, so it is advisable to buy an external hard drive. When synchronization is completed, we assign a name to the wallet and use it.

The website also has the ability to download the EthereumWallet to a mobile phone that supports iOS or Android.

But to quickly start working with cryptocurrency, use other wallets that do not require downloading the blockchain. They are called "light" and "thin". We will talk about them below.

• We use a cryptocurrency exchange to store Ethereum.

After opening an account on the exchange, wallets are created where you can store the purchased cryptocurrency. But it is recommended to use this method for short-term exchange transactions (buy cryptocurrency or sell it) and subsequently transfer virtual coins to other wallets.

For example, on the EXMO exchange, immediately after registration, a wallet is created in 12 currencies, including Ethereum (ETH). On this exchange you can buy Ethereum for rubles, hryvnias, dollars and euros.

• Create a wallet for Ethereum using online services.

For example, MyEtherWallet or Blockchain sites. The registration procedure is simple. Follow the instructions on the sites carefully and keep the keys or files in a safe place. You don't have to download anything to your computer, which saves free space and time.

• Using local third-party wallets (desktop and mobile applications). They are usually used to store many cryptocurrencies. For example, multi-currency wallets - JAXX, Coinomi, Exodus, etc.
• Buy hardware wallets. This is the safest way to store coins. The most popular device is the Ledger Nano S.

What does the company/project do?

Ethereum is a decentralized platform with smart contracts: applications that run exactly as programmed without any possibility of downtime, censorship, fraud, or third party interference.
These applications run on a custom blockchain, an extremely powerful shared global infrastructure that can move value and represent ownership of property.

It allows developers to create markets, maintain ledgers of debts or promises, transfer funds according to instructions given in the past (such as a will or futures contract) and many other things that have not yet been invented, all without middle man or counterparty risk.

The project was downloaded via air pre-sale in August 2014 by fans around the world. It is developed by the Ethereum Foundation, a Swiss non-profit with many supporters around the world.

Possibilities:

1. The Ethereum Wallet is a gateway for decentralized applications on the Ethereum blockchain. It allows you to store and protect ether and other crypto assets built on Ethereum, as well as write, deploy and use smart contracts.
2. Create a commercial digital token that can be used as a currency, a representation of an asset, a virtual stake, proof of membership, or anything at all. These tokens use a standard coin API, so your contract will be automatically compatible with any wallet, other contract or exchange also using this standard. The total number of tokens in circulation can be set to a simple fixed amount or varied based on any programmed set of rules.
3. Using the platform, you can create a contract that will hold the investor's money until a specific date or goal is reached. Depending on the result, the funds will either be transferred to the project owners or returned back to the participants. All of this is possible without requiring a centralized arbiter, mediation, or trusting anyone. You can even use the token you created earlier to track the distribution of rewards. (Smart contract)
4. Once you've developed your idea and secured funds, what next? You have to hire managers, find a reliable CFO to handle the accounts, hold board meetings, and create a ton of paperwork. Or you can just leave it all in the Ethereum contract. It will collect suggestions from your supporters and present them through a completely transparent voting process. One of the many benefits of having a robot running your organization is that it is immune to any outside influence as it ensures that only what it sets out to do is accomplished was programmed. And since the Ethereum network is decentralized, you will be able to provide services with a 100% uptime guarantee.

Many projects are built on Ethereum: https://www.stateofthedapps.com/

Founder Vitalik Buterin

(since the age of six, he has lived in Canada, where his parents emigrated. In 2014, leaving his studies at the University of Waterloo to realize his idea, Buterin received a $100 thousand grant from the foundation of PayPal founder Peter Thiel and won the World Technology Awards, beating Mark Zuckerberg) about the platform:

“Bitcoin is simply a digital currency, and our platform is a common decentralized world computer, the application of which is much wider. Ethereum also has a cryptocurrency, but we don't focus on it. The goal of the project is to do what Bitcoin does not do.

Ethereum executes program code, accepting and processing transactions from any person in the world, and does this according to clear rules, with a guarantee of results. Using this platform, even those people who do not trust each other can interact reliably. The idea came to me in 2013, when it became clear that blockchain technology could be used not only in cryptocurrencies.

Then there were many niche blockchain projects, and I decided to create one common, unifying platform on which this technology could be used in any area. This could be working with money - financial contracts, insurance, crowdfunding, all types of investments... The only condition is that all operations can be described as mathematical rules. Ethereum began with this basic idea...”

Vitalik continues about the benefits:

1. Cheap. Many projects on Ethereum can be done without significant investments. There is no need for a centralized IT infrastructure to support services.

2. Lack of intermediaries. People can interact with each other in a trusting environment. There is no need for an intermediary to control everything.

3. High level of trust. This is the most important benefit for users. A high level of security and trust between participants is ensured, in particular, by smart contracts.

Where to buy Ethereum or exchange

Ethereum cryptocurrency can be purchased in several ways, the main ones are:

• Purchasing electronic currencies from online exchangers is the fastest way to get Ether, and the rate will be a weighted average.

Today, almost every exchanger offers to exchange your usual currency for cryptocurrency. For example, buy Ethereum for Sberbank rubles or other payment systems.

The main thing is to choose a reliable exchange office. List of verified services:

1. Prostocash.
2. 60sec.
3. Platov.
4. Ramon Cash.

For example, the Prostocash exchange service. Reviews on the Internet are positive. In addition to Ethereum, you can buy Bitcoin (BTC), Dash (DSH), Zcash (ZEC), Litecoin (LTC), Dogecoin (XDG), and other coins.

For example, we change in the direction “Sberbank - Ethereum”. For 5000 rubles RUB we get 0.8 Ether ETH.

Thus, exchange transactions can be performed with other currencies (Advcash, Payer, Perfect Money:

Exchanger website - prostocash.com

• Buy Ethereum on a cryptocurrency exchange.

You can use any reliable and top crypto exchanges to exchange fiat currencies (rubles, dollars, etc.) for any cryptocurrencies.

Let's consider purchasing Ethereum on the EXMO exchange, since there are ways to top up with Russian rubles, dollars, hryvnia (from any Visa or Mastercard of a Ukrainian bank) and other fiat money.

We register on the official exmo website (the procedure is simple and takes a couple of minutes). Then we replenish the wallet using the proposed methods: for a wallet in rubles - Qiwi, Advcash, Payeer, OKPAY, MoneyPolo (the list changes periodically, payment systems can be added or removed). For an account in dollars: Perfect Money, Neteller, bank transfer wire transfer and others are added. You will see all this in the “Wallet” section.

After depositing money into your account, go to “Exchange” and complete the conversion operation by selecting the desired directions and amounts:

Or go to “Trading”, select a trading pair at the top (for example, ETH/USD) and buy at the limit - we indicate our own purchase rate, and if the market rate of Ethereum becomes equal to it, the placed order will automatically be triggered. In the same way, you can put the item on hold for sale at a price that interests us.

Or we buy on the market, which is similar to the “Exchange” tab - we indicate how much the purchase was made for, and we immediately see how much Ethereum (ETH) we will receive:

The exchange rate is more favorable than in exchange offices, but the whole process will take some time.

After purchasing Ethereum, you can transfer it from the exchange to another wallet for further storage by simply indicating its address.

Continuing the article: Bitcoin exchangers.

Ethereum (ETH)

In the modern world, Ethereum is the most practical cryptocurrency. Smart contract technology, which is still actively used in DeFi applications, was used here for the first time. Also, most financial transactions in the digital asset industry are carried out using the ERC-20 protocol. At the time of writing, there is no reason to believe that demand for ETH will decline in 2022, rather the opposite, since Ethereum 2.0 is planned to be launched in the foreseeable future.

Features of cryptocurrency:

1. Ethereum is a key platform for building innovative DeFi applications. There are no analogues today.
2. In 2022, the artificial “burning” of tokens was initiated to combat inflation.
3. The ERC-20 protocol is the underlying platform for hundreds of altcoins, 40 of which are in the TOP 100 by capitalization.
4. The transition to the improved Ethereum 2.0 blockchain will solve a number of pressing problems related to scaling and more. This should definitely have a positive impact on the growth of the asset's value in the medium term.
5. The innovative NFT industry is closely connected to the ETH blockchain.

Taking into account the above, as well as the ETH/USD price chart, we can conclude that the growth potential for Ethereum in 2022 could exceed 100%.

When looking at the ETH/USDT price chart, it is important to pay attention to the following points:

• despite the fact that Ethereum has been highly popular among investors since 2014, during 2022 its value increased by more than 400%;
• Trading volumes are steadily increasing;
• Ethereum accounts for more than 20% of the market capitalization.

Since the full launch of Ethereum 2.0 is planned for 2022, the cryptocurrency has every chance to repeat the rapid growth in value that was observed in 2022.

How else to get and earn Ethereum cryptocurrency

In addition to purchasing at an exchanger or on a stock exchange, you can get Ether coins :

• For the provision of services or for payment for some goods.
• Doing mining. If you have free money and time, then it may be profitable to assemble a “farm” by purchasing special equipment (Asic or powerful video cards) for mining cryptocurrency. Due to the increase in complexity, it is no longer profitable to mine ether using a regular computer.
• Earn Ethereum for free on special sites - Ethereum faucets, where a couple of coins drop after a certain time.

Ethereum Smart Contract Functions

The smart contract system in blockchain technology is quite practical and performs the following functions:

• Permanent storage of information. The contract may store data that would be useful to others.
• Transmission contracts perform the transmission of messages to a specified address while meeting the specified task. It may be waiting for a response from a certain party and, until it receives the necessary confirmation, not forward the message (multi-signature). A good example of such a contract is a withdrawal limit. After reaching the limit, you need to go through another set of procedures.
• Each of them is a kind of software library that others can use.
• All contracts have an algorithm for interacting with each other. It is called a “challenge” or “message” and contains a certain amount of ether (the internal currency that the Ethereum network uses, mainly to pay the cost of transactions). When the smart contract receives the message, it returns some other information. Thus, any message calls the following function.

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ICO on the Ethereum platform

Conducting an ICO on the Ethereum blockchain involves attracting investments in projects by issuing a new cryptocurrency - tokens, which, after the ICO (initial coin offering) procedure, will be traded on exchanges.

Tokens have an initial cost and are offered for purchase to investors. The main currency for ICOs is Ethereum, then Bitcoin and other altcoins. After collecting funds, the cryptocurrency is usually transferred to fiat currencies and used for the development of the project. An increase in the value of the new coin on the exchange will mean that investors who purchased the tokens receive a return on their initial investment.

Companies that do not have their own funds for development resort to ICOs of cryptocurrencies. For them, this is an opportunity to attract investment, and for society, it is possible to obtain an innovative product and new technologies. For an ordinary person, this is a good opportunity to buy tokens and thus become a co-owner of the company and receive income.

Currently, this procedure for raising money in this way has become very popular. As can be seen from the picture, in 2022 there was a sharp increase in the number of ICOs conducted and funds raised (over 1.8 billion US dollars for all time).

ICO is somewhat similar to the usual IPO, but there is no legal protection for the investor, since this procedure is not controlled by the state, so fraudulent projects may appear, the purpose of which is only to raise money and deceive the investor. Therefore, you need to carefully study the project, documentation, whitepaper, development team and clearly understand that any investment is always a risk.

ICO attracts investors because you can get very good profits if you choose the right project. There is a risk, but it can pay off in the form of, for example, 1000% profitability.

Bitcoin (BTC)

The world's first cryptocurrency, which, despite a number of shortcomings, still remains the financial engine of the industry. The annual and significant increase in the value of BTC makes the asset attractive to investors with different levels of capital even in 2021-2022. The forecast of leading analysts that by 2030 the value of Bitcoin may approach the 1,000,000 USD mark is still relevant.

At the time of writing, the market value of BTC is about 50,000 USD.

Attention! Beginning investors with small capital should not be afraid of the significant value of Bitcoin. For passive investment in Bitcoin, it is possible to buy Satoshi. In this case, the minimum investment amount will be 0.5 USD. It is still possible to make money on the pricing of Bitcoin in the Forex market. Today, many brokers offer their clients this opportunity through CFDs (contracts for differences). In this way, it is possible to profit from both the growth and decline in the value of the cryptocurrency. The significant profit potential is due to the high leverage provided by Forex brokers. Its maximum value for cryptocurrency trading is on average 1:50, and on specialized crypto exchanges it is only 1:5.

Factors that could affect the growth of Bitcoin's value in the long term:

1. The first cryptocurrency whose value dynamics reflect the development of the digital currency industry as a whole.
2. Bitcoin is the highest-valued digital asset, which is bound to attract media attention.
3. BTC has the most significant capitalization on the crypto market.
4. Since 2022, BTC futures have been traded in significant volumes on global stock markets.
5. BTC-ETF is available for purchase on major American and Canadian exchanges.
6. The first cryptocurrency to be legally recognized as a means of payment in 2022 (El Salvador).
7. One of the few cryptocurrencies in which large investors and international corporations publicly invest (Elon Musk’s Tesla, for example).

Of course, Bitcoin also has a number of significant disadvantages:

• low speed of processing financial transactions;
• high commissions during periods of increased demand for transfers;
• low payment processing speed;
• new and quite promising tokens are confidently winning back part of the capitalization from Bitcoin.

As you can see, from December 2022 to the present, the value of BTC has increased by more than 100%. It is also important to note that Bitcoin trading accounts for over 40% of the market capitalization.

Conclusion: Bitcoin remains a fairly promising instrument for long-term and medium-term investments. It is important to pay attention to the fact that due to the high capitalization of this altcoin, it is no longer as easy for large trading participants to influence its value as it was 2-3 years ago. Therefore, BTC today can be called one of the safest cryptocurrencies for short-term trading.