What Is Ethereum?
Ethereum is both a cryptocurrency and a functional blockchain in one guise. Ethereum is an open universal platform for developing decentralized applications based on blockchain and smart contracts. Ethereum raised the potential of blockchain technology in the financial industry to a new level. The main value of Ethereum is its Ethereum Virtual Machine (EVM) which allows developers to build various projects using a Solidity programming language.
To date, Ethereum is still functioning ифыув щт the Proof of Work (PoS) consensus mechanism. Nevertheless, to reduce energy consumption and allow Ethereum unlimited scalability and low gas fees, the developers plan to switch to Proof of Stake (PoS). The full transition to PoS is scheduled for around September 15, 2022. As a result of the transition, the Ethereum mainnet will merge with the PoS-based Beacon chain.
Ethereum Use Cases
- Various blockchain projects are being created on the Ethereum platform, such as DeFi apps, crypto-lending platforms, yield farming, and many others. The most famous Ethereum-based projects are MakerDAO, Lido, Uniswap, Aave, and Compound.
- On the basis of the Ethereum platform, many ICOs (Initial Coin Offering) are held. Developers use a single standard of issued tokens ― ERC-20. In addition, Ethereum is used to tokenize real-world assets (pegged to precious metals, fiat currencies, etc.). Thousands of NFTs based on the ERC-721 standard are also mined.
- Ethereum is the leading platform for launching DAOs. Hundreds of projects use Ethereum for various targeted DAOs: charity, freelancing, venture investments, and much more. All this is due to the generally recognized reliability, decentralization, and security of the platform.
- ETH is accepted as a payment option by thousands of merchants worldwide. Users can pay for airBaltic travels, Time Magazine subscriptions, Phillip Plein clothing, and many other goods and services.
- Despite slow transactions, ETH is often used for peer-to-peer transactions. Users send ETH to their friends, relatives, and business owners to business partners. With the transition to PoS, fees are expected to decrease, and the transaction speed will increase, making ETH an even more popular coin.
- Since Ethereum is the second most popular cryptocurrency and the first most important smart contract platform, many users use ETH to store value. It is expected that the value of ETH will only grow with the transition to PoS.
A key component of the network is the ETH coin. In fact, it is the “fuel” on which the network and the EVM run. ETH is used to pay gas fees and to access all Ethereum-based applications and services. In Ethereum, there is no clear mechanism for determining the number of coins in the system and the reward for the block. Instead, the minimum required emission is used. Ethereum automatically reduces the block reward to the level necessary to guarantee the security of the network. Thus, the number of coins in the system is not fixed, but the minimum required.
After the Merge, ETH will become a PoS coin that users can stake to ensure the safety of the network.
How to Store ETH?
The rules for storing ETH do not differ from those for storing other cryptocurrencies. It is crucial to always remember that whoever owns the private keys owns the cryptocurrency. There are four main types of wallets:
- Hardware. Hardware crypto wallets are physical devices. The devices themselves do not allow conducting cryptocurrency transactions. To access transactions, developers of such vaults usually create separate applications.
- Mobile. Such wallets belong to the software category. They are downloaded and installed on customers’ smartphones or tablets. Usually, developers of mobile wallets create versions only for iOS and Android. Such wallets are very convenient since transactions can be performed on the go.
- Desktop. They can be downloaded and installed on personal computers (PCs). At the same time, developers of desktop crypto wallets often create three versions — Windows, Linux, and macOS.
- Browser-based. This type is often referred to as web storage. From a technical point of view, these are software wallets. Such cryptocurrency products do not need to be downloaded and installed. They are available in popular browsers.
Most users store ETH in hot wallets to have quick access to the Ethereum blockchain. Therefore, if you need a wallet to perform everyday transactions, then a mobile or browser wallet will be the best choice. SimpleHold is a non-custodial wallet that has two versions: mobile application and browser extension. Our wallet is characterized by simplicity, transparency, and security, since we do not have access to your keys or transactions, providing you with maximum privacy.
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