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What is a Ethereum and how does it work?
Ethereum is a decentralised platform that runs smart contracts. It is different to other platforms in that applications will run exactly as programmed, without downtime, censorship, fraud or third-party interference. To put it simply, Ethereum is an open software platform that is based on blockchain technology that enables developers to both build and deploy centralised applications.
The cryptocurrency that Ethereum runs is called Ether, and is used to pay for computation time, as well as transaction fees. The Ethereum protocol states that there is a blockchain and a price for each operation. So, in order to get things transferred or executed by the network, you must consume or burn gas.
With Ethereum, there are other ways in which you can earn benefits. You can join the network as a minor, which will allow you to earn block rewards from the network. Although there are a number of different ways in which you can do this, although the easiest is to buy an Ethereum mining contract. It is worth noting though that this, although easy, is a more expensive way of becoming a minor.
The way that Ethereum runs is very simple. All the while you have enough funds to pay for your code to continue being run by the network, your contacts will stay up and running.
Unlike a lot of other cryptocurrencies, Ethereum is developed and maintained by ETHDEV, along with contributions from across the globe. Along with that, there is a Ethereum foundation, and multiple start-ups working with the Ethereum blockchain.
Ethereum is currently in the ‘Homestead’ stage, and until the release of the next stage ‘Metropolis’, the related software is still considered to be Beta. That said, you can still use the Ethereum Wallet DApp, but do so carefully.
How do you buy a Ethereum?
Ethereum is one of the more popular cryptocurrencies and is available in most of the exchanges. Coinbase and Bitstamp are two of the market leaders if i was to recommend. We have accounts with both and we have never had any problems. Once bought you can leave the Ethereum in the Exchange or export them to a Wallet for safe keeping. Generally, I have left them in the exchange but you will be prone to hacking attempts. There are several new security features that we highly recommend you implement to cover yourself to the next level of security. Using the Google Authenticator and setup will really protect you. I have also implemented an email authentication before funds can be moved or sold. Nothing is 100% secure but in my mind the exchange is very secure. Obviously, if the Exchange company gets hacked or decides to defraud you there is nothing you can do.
Most experts will tell you to move as soon as you can to an external wallet. And i do not disagree.