Ethereum

Reviewed by Komal | Updated on Sep 30, 2020

Introduction

Ethereum is an open-source computing platform and operating system, blockchain-based, decentralised software used for its own cryptocurrency, ether. It was launched in the year 2015. It helps the smart contracts and Distributed application to be built and run without any downtime, fraud, interference from the third party and control. It is not just a platform but also a programming language.

Understanding Ethereum

Ethereum runs applications on a platform-specific cryptographic token, ether. It has announced a pre-sale for ether in the year 2014, and it received an overwhelming response from the investors.

Ether is like a tool for transporting the Ethereum network and is mostly used within Ethereum by developers looking to build and run applications.

Ether is commonly used for two purposes: it is traded, like other cryptocurrencies, as digital or virtual currency exchange, and it is used within Ethereum to run applications and even to monetise research. It can be used to code, decentralise, secure and trade just about anything.

Factors to consider before you invest

Similar to other cryptocurrencies, the validity of each ether is provided by a blockchain, a continuously growing list of records, called a block that is linked and secured using cryptography. It is an open, distributed ledger, which effectively and verifiably and permanently records transactions between two parties.

Unlike Bitcoins, Ethereum operates in a manner called state transitions using accounts and balances. That is not based on unspent transaction outputs (UTXOs). A cryptocurrency wallet stores the""keys"" ""or" ""addresses"" public and private, that can be used to collect or spend ether. These can be created for a BIP 32"" ""HD Wallet"" with BIP 39 style mnemonics.

This is unnecessary in Ethereum because it does not run in a UTXO system. You can write in the blockchain with the private key, essentially doing an ether transaction.

You need the Keccak-256 hash of that account's public key to transfer ether to an account. Ether accounts are pseudonymous in that they are not affiliated with individuals but with one or more unique addresses.

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