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...
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.