Home GuidesEthereum

Follow us on Twitter or join our Telegram

How does Ethereum work?

Whether you trade it, buy it or mine it, Ethereum (ETH) will surely grab your attention once you begin to ask yourself: how does Ethereum work, after all? For starters, you have to know that Ethereum, as a cryptocurrency, is inextricably linked to Ethereum the platform which gave birth to it.

If you are curious about the platform’s inner workings, you best imagine a super “computer” which consists of a network of PCs that power its daily operation. The network itself uses blockchain technology which also powers Bitcoin, with the twist that the platform itself is not only dedicated to managing payment. Actually, one of its intended purposes is to be used to create decentralized applications known as “smart contracts” which are not controlled by third parties and are resistant to censorship and frauds.

But, what is the process of Ethereum? Ethereum digital currency is derived from ether which is a means of payment for the computing resources the users on the network need to run applications on Ethereum network. At the same time, the developers use it to build their applications and smart contracts. That’s good, but how does ETH work in real-life cases, such as if you want to buy goods and services? The answer is simple: it will work, as long as the merchant accepts it as a means of payment.

Which brings us to the point: how to use Ethereum? Well, just like any other crypto, you can mine it, store it in your wallet or trade on exchanges for profit. If you are not using it to create or run applications on Ethereum network or buy stuff, your best bet is to try to buy and sell it on exchanges and try to profit from changes in its prices.

More Guides

What Is Ethereum 2.0?

Everywhere you look nowadays, there is an ‘Ethereum-killer’. At times, it seems as if protocol knights pop up monthly in fully-coded armor to slay the cyberspace dragon named Ethereum. Those who believe that Ethereum’s reign will come to an...

Read more

How to Stake ETH for Ethereum 2.0?

With the event of ether (ETH) launching above the USD 4000 threshold in May 2021, one couldn’t help but wonder whether decentralized applications are nearing mainstream adoption. Just a year ago it floated near USD 200. Right now, if that price...

Read more

How to Buy Ethereum?

In 2021, Ethereum (ETH) soared beyond all its previous all time highs to more than USD 4k. Everyone’s question suddenly became, “How can I get in on this?” As it turns out, buying ether, the...

Read more

3 Methods to Buy Ethereum with PayPal Instantly

PayPal has the benefit of being both fast and widespread enough so as to make itself an essential online payment system. Yet, can we make use of its qualities to buy Ethereum (ETH) without hassle? Luckily for you, there actually are 3 methods to...

Read more

5 Reasons Why Your Business Should Accept Ethereum

Ethereum (ETH) is predicted to become the most important global cryptocurrency after bitcoin in the short term. In the meantime, Ethereum currency is already gaining traction among various businesses which is why we give you 5 reasons why your...

Read more

3 Ways to Set Up an Ethereum Wallet

So, you have decided you want to mine, buy or sell Ethereum (ETH). Despite it being a cryptocurrency, this does not mean that you don’t need a place to store it. To be fair, you do not actually “store” your precious ETH in these wallets as...

Read more