Things to know about Ethereum before Investing
Ethereum is a decentralized digital currency build using peer-peer technology functioning without any central authority or agency controlling the value. Issuing, managing, valuing were managed by the network of users itself.
Ethereum community-run technology powering the cryptocurrency, ether (ETH), and thousands of decentralized applications. Ethereum was started in 2013 through crowdfunding. The currency started transactions in 2015. Each transaction will be verified through cryptography and recorded in a public ledger called the blockchain. Ethereum allows for the creation and exchange of NFTs, which are non-interchangeable tokens connected to digital works of art or other real-world items and sold as unique digital property.
It is the second valuable cryptocurrency. It reached the market capital of 400 Billion US Dollars in 7 years of its existence. It became popular in social media and every normal investor was at least holding few pieces of both Bitcoin and Ethereum. Ethereum’s decentralized finance (Defi) system never sleeps or discriminates. With just an internet connection, you can send, receive, borrow, earn interest, and even stream funds anywhere in the world.
How does Ethereum work?
An Ethereum transaction is verified in a ledger called the blockchain. Like any other currency, Ethereum should be mined, the transaction is done from one peer to another and stored in a ledger.
Ethereum should be mined or created by the process called mining. Mining is the process of solving the mathematical problem through hashing, this process indeed creates Mining that can be done using a high-end GPU. 267 Ethereum is provided as a reward every hour.
Thousand and thousands of miners will be competing for getting the reward, miners with better GPU as more chances of getting rewards. Mined Ethereum will be stored in crypto wallets. Miners can then sell the Ethereum in market place into Fiat currency like Dollars, Yen, Rupees, etc.
How coins created in a specified time frame:
Currently, 115 Million Ethereum were available. Ethereum network is creating and running decentralized applications and smart contracts. One Ethereum block is created and validated approximately every 12 seconds on Ethereum. There is no cap on the total number of blocks created.
Miners will not only receive the Ethereum but also receives the transaction fees of all peer-peer transaction performed.
Brief History of the coin and its holding:
Ethereum was initially described in a white paper by Vitalik Buterin,a programmer and co-founder of Bitcoin Magazine, in late 2013 to build decentralized applications
After early “proof-of-concept” transactions, “Olympic” was the last prototype and public beta pre-release. The Olympic network provided users with a bug bounty of 25,000 Ether for stress testing the limits of the Ethereum blockchain.
In 2015, the price started at $1.30 per Ethereum. The price rose to $10 in May 2016. The price remained below $10 in 2016.
In 2017, prices soared from $10 to $770. By January 2018, Ethereum ‘s price reached 4 figure mark of 1000 dollars. Later the price corrected to $400 by March 2018. By the end of December 2018, it was trading around $120.
Till July 2020, the price of Ethereum stayed around $300. The big bull run started in all of the cryptocurrency and Ethereum reached $4000 by April 2021. The price soared more than 1000% in 1 year. There is a lot of correction in-between. Ethereum proved to be one of the best cryptocurrencies only below Bitcoin.
In February 2021, Ethereum hit 4,200 marks for the first time. Once they start dumping all the Cryptocurrency, the price can fall drastically. Ethereum is a speculative currency. It is extremely volatile, it can lose 50% -60% of its value in a month and can double in a month unlike any other instrument in the market.
Market cap and ranking of the coin:
The current market cap of Ethereum is 300 Billion and it is the second-ranked cryptocurrency. It reached the peak market cap of 420 Billion in April 2021. Ethereum is traded in almost all crypto exchanges. People invest in Ethereum even to buy another cryptocurrency.
All Cryptocurrency tend to be volatile. Every week it moves at least 10-20% up or down. So if you planning on buying one of them, be prepared to face the quick change of prices. Online Influencers tends to exaggerate on every movement of price. If it Ethereum moves to $5000, influencer keep the target as $20,000 and speak the advantages of Ethereum. If Ethereum correct by 20%, they start to mention that cryptocurrency is spam and it will move to Zero. So have a basic understanding of how crypto works and buy only with money which is really not immediately required. Invest 5-10% of your wealth in cryptocurrency. Cryptocurrency as made so many new millionaire as part of this bull-run. So do not expect to earn millions in few months. If more people believe in cryptocurrency, more returns will be made. If people lose belief, it will go to ground.
How to Buy/invest:
Ethereum can be bought in any of the top crypto exchanges like Coinbase, Binance, wazirx. Ethereum will be bought using any other cryptocurrency or any fiat currency based on the currency day’s price. Transaction fees will be marginally around 0.1-0.5% of the total value bought.
How to mine:
Mining is a record-keeping service done through the use of computer processing power. Miners keep the blockchain consistent, complete, and unalterable by repeatedly grouping newly broadcast transactions into a block, which is then broadcast to the network and verified by recipient nodes. Each block contains an SHA-256 cryptographic hash of the previous block, thus linking it to the previous block and giving the blockchain its name.
Power consumption for Ethereum is about 0.1% of the total consumption of the whole world. It is the primary reason
Solo Miner:
Solo miners should have a room full of hard devices full of GPUs to solve the mining problems of Blockchain. The regard from the Blockchain will not be split between many people One person gets the reward based on the problem-solving.
For Example, Ethereum provides 12.5 Ether for every 1 min and it will be paid to a person who solves the problem at that time. The remaining millions of miners will not get paid. To get the reward, you need large hardware requirements to compete will large blockchain farms. Many software companies possess acres of mining farms with the latest GPU to get rewarded. If you are not having more hardware, it is better to start mining coins for a new blockchain where competition is low. So it increases the probability of getting the rewards.
Join the pool:
To solve the mining problem for solo people, Blockchain can be mined using a pool of miners. The pool consists of many solo miners using their hardware devices to solve blockchain problems. Miners get paid based on the performance and hash rate of their machine. You can use your existing computer to mine. You can use the CPU or GPU of the machine to mine for the pool. The reward from the pool may not be transparent but you will be paid in coins and you can use the rewards transferred to your digital wallet.
Best Pool for Ethereum Mining: https://ethpool.org/
Solo Mining Software: https://bitcoin.org/en/download
Best Exchange: https://www.coinbase.com/join/jayend_r
