What to do with Ethereum?
The functionality of Ethereum can be viewed from the perspective of a user and a developer. The platform gives users an opportunity to conduct transactions, and ether acts as an internal currency here. Meanwhile, a programmer can use the capabilities of the Ethereum Virtual Machine (EVM) to create their own products. This is what makes Ethereum special and different from Bitcoin.
What to do with ether?
Theoretically, all PC owners can mine, even if they do not hold ethers yet. However, this is quite expensive, because ether coins are distributed among all miners in accordance with the Proof-of-Work principle, which requires the use of a powerful computer. Another type of expenditures is electricity, which is necessary for the operation of computers.
Since the process of solo mining is not cheap, many people prefer joining mining pools. A mining pool is a server that distributes a computational task among all participants and as soon as a new block is closed, it also distributes a reward. It is a centralized organization that unites many devices (computers) and has a high hash rate.
However, everyone who intends to become a miner, should take into account an upcoming upgrade of the platform to Ethereum 2.0. The new version will use Proof-of-Stake mining algorithm, in which the size of the hash rate will no longer matter.
Ether can be used as a store of value. Keep in mind that ETH's demand and supply are a lot determined by any changes on the platform. Changes in the Ethereum protocol, the number of used apps and smart contracts contribute to the popularity of ether. The exchange rate may fall sharply and the savings will depreciate if the network users consider changes to be unfavorable at some point.
In order to trade ETH, you can choose any crypto exchange you like. The majority of the world's leading platforms allow trading ether in pairs with other cryptocurrencies and sometimes fiat.
Projects that raise money via the initial coin offering (ICO) accept payments in cryptocurrency. Many startups are still focused on BTC, but there are many companies that already accept ETH.
Note: ICO is a high-risk investment, so it is recommended to think twice before making a decision.
Pay for goods and services
The list of firms that accept ether is still short, but it is constantly expanding. Ether can be used to pay for hosting (Hostinger, LovingHosting, QHoster, Hostwinds, and others), acquire VPN services (TorGuard VPN, EarthVPN, DeepWebVPN), or make purchases in some stores.
Services that accept ethers:
- Overstock, the largest retailer.
- Vaposhop and 101vape, online stores for people interested in the vaping culture.
- Bitgild, a platform that sells precious metals.
- Cryptomercado, a store offering coffee and snacks for cryptocurrency.
- Cryptopet, offers goods for pets.
- Sheldon.store, gift cards and certificates for any occasion.
- Bitcoincards, physical wallets for storing bitcoins.
A few more companies that accept ether payments
The owners of online stores can add ether payment option to their website. For instance, you can use ethPay or PayWithEther, implemented in the form of a plugin for WordPress.
Features Of The Ethereum Platform
The invention of the Ethereum platform allowed simplifying financial relationship between parties as much as possible. The absence of centralization and the use of smart contracts make it easy to perform a transaction no matter how far apart the participants are.
Automation of decision-making process
The use of smart contracts is universal, and one of their advantages is speed and the absence of additional costs. Any financial cooperation can be automated and remain transparent, impartial, and accurately executed.
This is useful both for ordinary platform users and for company representatives. For instance, a smart contract can be used to send an automatic payment if certain conditions are met.
When it comes to payments to company's clients, a customer does not need to fill in an application any longer, and a clerk does not have to process payments if a smart contract is used. If the conditions of an agreement are met, money will be transferred to a client's account automatically, quickly, and without bureaucratic issues.
Ethereum for Developers
The Ethereum Virtual Machine provided developers with opportunities that were previously unavailable. Now any programmer can create a personal token and write a smart contract or a decentralized app.
Tokens, which were created on the Ethereum basis, can function as an independent unit of value. For this purpose, technical standards adopted to optimize the functioning of smart contracts are used. They are called Ethereum Request for Comment (ERC). ERC-20 is the most common standard used to create tokens.
Creation of Smart Contracts
A smart contract is a computer protocol based on "if - > then" cycles. These cycles describe the conditions under which certain actions are to be performed. Smart contracts are predominantly written in a special programming language called Solidity.
Notes for programmers:
- if a smart contract is already deployed, it cannot be canceled;
- the code of a smart contract cannot be changed during the working process.
This entails the need to thoroughly test a program before launching it. Bugs (software errors) in the code of a smart contract can lead to enormous losses. There are many examples of users and companies whose total losses amounted to millions of dollars.
Creating Decentralized Apps
Decentralized apps (dApps) have a more complex structure than a smart contract. This is an app, that uses the computing power of its users' devices for launching and maintaining its operation. Just like a centralized app, dApp has a user interface and an internal program structure.
Note: specific businesses mentioned here are not the only options available, and should not be taken as a recommendation.