To understand Ethereum, let’s compare it to a currency we already understand – Bitcoin. Ethereum is a decentralized platform for applications. Both Bitcoin and Ethereum are decentralized platforms, but they differ in a…
December 5, 2017
To understand Ethereum, let’s compare it to a currency we already understand – Bitcoin. Ethereum is a decentralized platform for applications. Both Bitcoin and Ethereum are decentralized platforms, but they differ in a few key ways.
While Bitcoin is designed to process transactions and help people exchange money, Ethereum aims to function as a kind of decentralized computer, supporting a new type of application (a “dApp”) in the process. A good analogy is to think of Ethereum as the blockchain version of the “App Store”.
What is Ether?
Ether is the currency that allows the Ethereum network to run. In the same way that your computer uses electricity to run, Ethereum requires small amounts of Ether to process transactions. Ether powers the Ethereum network and is a unit of currency that you can buy and sell.
Technically, you aren’t buying Ethereum when you try and buy their token online, Ethereum is the name of the network – you’re actually buying Ether, Ethereum’s unit of currency.
Who created Ethereum?
Ethereum was first proposed by Canadian programmer Vitalik Buterin in 2013, when he was only 19 years old. When first publicly announced in January 2014, the core Ethereum team was Vitalik Buterin, fellow Canadian Anthony Di Iorio, Mihai Alisie, and Charles Hoskinson. The system officially went live on July 30th, 2015.
Is Ethereum like Bitcoin?
Well, sort of, but not really. Like Bitcoin, Ethereum is a distributed public blockchain network. Although there are some significant technical differences between the two, the most important distinction to note is that Bitcoin and Ethereum differ substantially in purpose and capability.
Bitcoin offers one particular application of blockchain technology, a peer to peer electronic cash system that enables online Bitcoin payments. While the Bitcoin blockchain is used to track ownership of digital currency (bitcoins), the Ethereum blockchain focuses on running the programming code of any decentralized application. These decentralized applications have a wide array of use cases, including but not limited to financial transactions.
How does Ethereum work?
Ethereum’s core innovation, the Ethereum Virtual Machine (EVM) is a Turing-complete software that runs on the Ethereum network. It enables anyone to run any program, regardless of the programming language given enough time and memory.
The Ethereum Virtual Machine makes the process of creating blockchain applications much easier and efficient than ever before. Instead of having to build an entirely original blockchain for each new application, Ethereum enables the development of potentially thousands of different applications all on one platform.
What is a decentralized application?
Any services that are centralized can be decentralized using Ethereum. Think about all the intermediary services that exist across hundreds of different industries. From obvious services like loans provided by banks to intermediary services rarely thought about by most people like title registries, voting systems, regulatory compliance and much more.
Some notable decentralized applications today are hoping to decentralize industries like cloud storage, home rentals, and even social media.
How do I buy and sell Ether in Canada?
In Canada there are a few options for buying and selling Ether.
Online Exchange: If you want to buy or trade Ether at the best avialable rate, you‘ll want to use an online exchange like Coinsquare. Exchanges act as an escrow by storing both Ether and fiat currency on behalf of their customers. Here you can make your own orders to buy or sell Ether at the best rates with the click of a button. On exchanges, fees and the spread are low, however you are required to submit personal information like your address to comply with Canadian regulations.
ATM: Maybe the most private method to acquire Ether is a Bitcoin ATM. They are referred to as Bitcoin ATMs only because that is the most popular digital currency. Most of these ATMs work with Ether as well. These machines where you can get money with your card. Some companies also produce ATMs where you can buy Ether with cash. ATMs have very high fees of 5-8% percent or even more.
Gift Cards/Voucher: This is another easy method to buy Ether. In Canada you can use cash or debit to buy a Flexepin voucher at thousands of retail purchase locations. These vouchers can be redeemed on exchanges like Coinsquare for Ether. Like ATMs, these voucher cards tend to charge relatively high fees.
How do I store Ether?
To store your Ether, you will use some form of an Ether wallet. Ether wallets function similar to traditional wallets except it’s not a physical wallet and it doesn’t actually store currency – digital currency wallets simply interact with the blockchain to keep track of your funds. Ether wallets work almost exactly the same as Bitcoin wallets.
You’ll find wallets come in many types including desktop, mobile, web, paper and hardware wallets. Each of these has its advantages and disadvantages.
When you buy Ether on Coinsquare, you are automatically given a web wallet to track your Ether so you don’t have to worry about setting one up.