What is Ethereum? The Complete Guide

What is Ethereum? This is one of the most important questions you can ask when looking into cryptocurrency and blockchain for the first time. Ethereum has emerged as one of the most compelling cryptocurrency project due to the fact that they opened up a platform in which teams can begin their own cryptocurrency and token projects. Ether, as it is called, is one of the most forward-thinking and compelling driving forces in the financial and technology industries today.

This guide is for learning everything about Ethereum. We’ll cover the basics from the creation of ETH to the possible future of the well-known blockchain projects. This guide is purely educational.  Just the facts straight to you.

Table of Contents

  1. What is Ethereum?
  2. History of Ethereum
  3. Ethereum vs. Bitcoin: What’s the Difference?
  4. Advantages and Disadvantages of Ethereum
  5. Ethereum Common Use Cases
  6. Who are Ethereum’s Competitors?
  7. How to Buy ETH
  8. How Do I Store Ethereum?
  9. Additional Ethereum Resources

1. What is Ethereum?

Ethereum was created by former Bitcoin Magazine co-founder, Vitalik Buterin , and British programmer, Gavin Wood, in 2013 (an ultimately released in July, 2015). It’s an open-source, public, decentralized computing platform and operating system on the blockchain, supporting:

  • Smart contract functionality, and the
  • Deployment of decentralized applications.

If that’s not ringing any bells, another popular comparison is to that of a “world computer” via cryptographic architecture and Turing completeness.

What are Smart Contracts?

Broken down further, Ethereum’s smart contracts can be thought of as a vending machine, where instead of seeking out a lawyer, notary, or transcriptionist – just one of the industries blockchain technolog tackles – users spend their cryptocurrency (tokens) in exchange for a drafted contract, escrowed transaction, or other transactional function.

Based on different computer languages (Solidity, Serpent, LLL, and Mutan), smart contracts are all-encompassing computer protocols, not only defining the parameters and penalties governing transactions, but automatically enforcing them as well, ultimately, eliminating “downtime, censorship, fraud or third-party interference.”

What are Decentralized Applications (DApps)?

Commonly referred to as DApps, decentralized applications are based on the Ethereum platform and its smart contracts, running on a peer-to-peer network and boasting four key characteristics:

  • Open-source and autonomously controlled,
  • Use of the blockchain to store data,
  • Use of a cryptographic token to store value, and
  • Generation of such token through a cryptographic algorithm.

What separates decentralized applications from standard applications is the infrastructure of their back-end servers, omitting the use of programming languages such as Rails or Django in favor of blockchain technology – removing centralized hosting services and putting power and voice back in the hands of its users.

As of January 2018, there are more than 250 live DApps on the Ethereum blockchain, including (but not limited to) DApps for:

  • Digital signatures,
  • Smart locks,
  • Digital proprietary rights management for copyrighted works,
  • Prediction markets,
  • Crowdfunding platforms,
  • Remittance,
  • Online casinos and gambling,
  • Electric and clean energy car charging,
  • Secure identity systems, such as KYC controls, and
  • Cryptokitties – a popular blockchain-based video game for kitten collection and rearing.

Ethereum Virtual Machine (“EVM”)

Fueling Ethereum’s security and code execution is the Ethereum Virtual Machine (“EVM”) – the protocol handling computation and its internal state.

The EVM is a key innovation separating Ethereum from its narrowly functioning big brother (Bitcoin), which was constructed with one function in mind – to act as a currency.
The EVM however, was designed to act as a runtime environment for smart contracts based on Ethereum, allowing any user or developer to create applications via a friendly programming language (such as JavaScript or Python), while ultimately,

  • Automating transactional processes,
  • Performing specific actions,
  • Preventing Denial-of-service (DoS) attacks, and
  • Ensuring uninterrupted communication across the network.

The EVM’s distribution of computing across the network “gives Ethereum extreme levels of fault tolerance, ensures zero downtime, and makes data stored on the blockchain forever unchangeable and censorship-resistant.”

In simple terms, the EVM could be viewed as one giant environment conducive for building bigger, better, and powerful smart contracts. Instead of the creation of an original blockchain for each new project, the EVM allows applications and users to build in one place and on top of previously laid foundations.

Ether (ETH) and Mining

When understanding Ethereum, it’s important to differentiate between the Ethereum blockchain and the fundamental cryptocurrency for its operation – ether, abbreviated by the code ‘ETH’.

Ether is not the technology, but the token which pays computational costs – also known as gas – and transactional fees. It’s the fuel that keeps the car running.

Anytime a user wants to execute a smart contract or send ether to another user on the network, there needs to be confirmation and recordation of such event – such task is not executed by a centralized server or company per se, but by thousands (and growing) of computers around the world – known as Proof-of-work (PoW).

As reward for validating and processing transactions via PoW – also known as mining –  users – commonly referred to as miners – are rewarded in ether (ETH), as their computational resources have not only solved a complex algorithmic problem, but contributed towards maintaining the security, integrity, and validity of the network.

In simple terms, the more complex and sophisticated the computational commands you want to execute, the more gas (ether) you will be required to pay.

Once again, it’s important to understand that when purchasing Ethereum, you aren’t actually purchasing “Ethereum,” you’re purchasing “ether” – the token powering transactions across the network.

Worth noting is that in late 2017, Vitalik proposed Ethereum’s transition away from PoW to Proof-of-stake (PoS) due to PoW’s consumption of exorbitant amounts of energy and resources. With PoS, instead of miners validating transactions via the solving of mathematical problems, transactions are validated by “stakers,” “forgers,” or “validators,” who place their coins and tokens in a specialized wallet to validate transactions, and are determined by their wealth or stake in the network.

Ultimately, PoS serves as a far greener and cheaper consensus mechanism than PoW, making it a practical alternative for Ethereum’s mass adoption.

To read up further on Proof-of-work vs. Proof-of-stake, you can check out this article on HackerNoon.

2. History of Ethereum

In late 2013, a then 19 year-old Vitalik Buterin published the Ethereum whitepaper, addressing Bitcoin’s need for a scripting language for app development.

TechCrunch invites Vitalik Buterin to Discuss Ethereum at Disrupt

Vitalik Butenrin at TechCrunch’s Disrupt event in London, 2015

Buterin ultimately proposed a revolutionary platform with a “more general scripting language” that allows anyone to build programs such as smart contracts, financial agreements, personal identity registries, and much more.

The idea wasn’t well received at first, but soon gained traction in the following year.

In 2014 came the Ethereum Foundation (Stiftung Ethereum), a nonprofit foundation created to promote and support the Ethereum platform, shortly followed by an initial coin offering (ICO), and development of core technology.

Subsequently, excitement began to build as the technology began to solidify, and developers flocked to the platform – Ethereum was progressing rapidly.

DAO Attack

All was smooth, until one event in 2016 threatened the very existence and future of the Ethereum project – The DAO Attack.

A Red Logo of The Dao

Short for the ‘decentralized autonomous organization’, The DAO was a set of smart contracts developed on the Ethereum platform, raising a historic US $150 million in crowdsale funding.

In order to influence development of the project, investors were required to purchase DAO tokens with ether, also known as ETH (the fundamental cryptocurrency fueling Ethereum’s operation).

Not long after close of the crowdsale, The DAO was exploited – resulting in over USD $50 million in ether being drained from DAO funds, and leaving the Ethereum community wondering whether to perform a divisive “hard fork” in order to reappropriate the lost funds.

Hard Fork

Ultimately, the network hard-forked, and split into two, giving us what we now know as Ethereum (ETH) and Ethereum Classic (ETC) – and thus, bringing us into present day.

To read up further on The DAO Attack, and Ethereum’s successive hard fork, check out this comprehensive timeline and article here.

This post addresses the former (ETH), and will only briefly touch on Ethereum Classic and its core differences to Ethereum.

CoolWallet Storage Tip: If you’re holding more than one month’s salary in cryptocurrency on an exchange, we strongly encourage you to move it to cold storage. A small investment in security now, will pay dividends in the future. To read up more on cold storage, check out ‘Section 7: How Do I Store Ethereum?’

3. Ethereum vs. Bitcoin: What’s the Difference?

An Ethereum token surrounded by Bitcoins

Although striving to repair and fill different gaps and issues in present day society (and the economy), Ethereum and Bitcoin oftentimes can’t help but be mentioned in the same sentence by cryptocurrency enthusiasts and investors due to their decentralized nature and respective currencies (ether and Bitcoin).

To jog your memory, Bitcoin is considered the world’s first cryptocurrency, launched in 2009 to decentralize the financial sector and act as a universal payment system absent a central bank or administrator.

It should be no surprise by now to hear that Ethereum is offering much more than just a decentralized, P2P, payment system, but an application of the blockchain for smart contracts and decentralized applications  – or put more simply, the automatic execution of tasks.

Ethereum co-founder Gavin Wood even acknowledged the major difference between the two, stating, Bitcoin is first and foremost a currency; this is one particular application of a blockchain. However, it is far from the only application. To take a past example of a similar situation, e-mail is one particular use of the internet, and for sure helped popularise it, but there are many others. Ethereum takes a more comprehensive approach towards tackling societal, economical, and political deficiencies through one giant computational network, while the Bitcoin network tackles just a particular application of blockchain technology – payment.

Let’s take a look at several other core differences in their operation, purpose, and functionality.

Founders

One of the most notable differences between the two is in terms of leadership. While Bitcoin was founded by the ever-mysterious and yet to be uncovered ‘Satoshi Nakamoto,’ Ethereum has a face to the name, and well…several faces at that, including: Vitalik Buterin, Gavin Wood, Mihai Alise, Anthony Di lorio, and Charles Hoskinson.

As transparency issues are ripe within the crypto-sphere, anonymity may be seen as a downside of Bitcoin and another currencies, while having (several) faces to the Ethereum project’s name gives investors and users some assurance of accountability – for example, users can rest easy knowing Vitalik isn’t overtly manipulating the market and Ethereum prices.

Ether vs. Bitcoin

Terminology-wise, it’s important to nail down the difference between Ethereum and Ether, and Bitcoin and bitcoin. Ethereum refers to the Ethereum blockchain on which smart contracts and decentralized applications are deployed, while ether refers to the token powering the transactional and computational costs of the blockchain.

Similarly, Bitcoin refers to the protocol and payment network, and more comprehensively – the ecosystem, while bitcoin refers to the actual currency. For example, “I just purchased three bitcoins the other day.”

While both ether and bitcoin are cryptocurrencies and can be traded, exchanged, and transacted between users, ether is largely used to pay for services and transaction fees on the network – enabling the development and distribution of applications – while bitcoin is used more closely to an actual currency and alternative therein.

Supply

Bitcoin’s supply is diminishing, and quickly. Capped at 21 million coins, it’s already estimated the majority of bitcoins out there have been mined (80% as of January, 2018), with the block subsidy set to deplete at block 6,930,000, or around the year 2140.

Ethereum on the other hand has no maximum supply, and is capped at an annual rate of 18 million ether – meaning that the purchasing power of a deflationary currency (bitcoin) is expected to rise over time, whereas the value of an inflationary currency (ether) will drop. Currently, ether supply sits at just over 98 million and as such, boasts a much lower cost of entry for newcomers.

Transaction fees

A chart detailing transaction fee hsitory

A core difference that has become evident over the past year is in both protocol’s transaction fees. As the network began to bloat, and bitcoin’s price began to rise, so did transaction fees, topping out at a nearly $55/average transaction fee at its peak in early 2018.

During that same period (early 2018), Ethereum’s average transaction fee peaked at just north of $4, and some users began turning to ether as a more affordable and convenient form of transacting.

Mining

While Ethereum is positioned to fully move towards PoS “sometime in 2018,” currently sitting in limbo as a hybrid between PoW a and PoS, Bitcoin adheres to PoW as their consensus mechanism, where service requesters are required to perform work (computational resources and verification) in exchange for reward.

As mentioned above, PoW requires large amounts of resources and energy, and pits miners against each other – with each competing to complete transactions the fastest in order to receive a reward (Bitcoin). Ethereum’s network requires a lot of energy, and their push towards PoS is a solution towards curbing wasteful and expensive energy costs.

Additionally, PoS requires users validating the network to have some actual stake in the network – after all, they are “staking” their own coins – while PoW miners theoretically don’t even need to own the targeted currency they are mining.

Block Times

Both networks have suffered their fair share of bloat and congestion, leading to slow transaction and confirmation times on the network. Remember, in order to process and validate transactions, users mine blocks to uphold the security and integrity of the network.

Bitcoin’s expected block time averages at about 10 minutes, while Ethereum’s ranges between 10 to 20 seconds – allowing for faster transaction confirmation times.

To read up more on Ethereum’s push towards PoS via their Casper Protocol, click here.

4. Advantages and Disadvantages of Ethereum

Ethereum offers users, investors, developers, content creators, institutions, and businesses an unfathomable opportunity for growth, innovation, and mass adoption, however, it does currently suffer from several issues holding it back. Below is a comparison chart of five core advantages and disadvantages of the Ethereum network.

Advantages Disadvantages

Provably fair and transparent

Smart contracts are public, which builds upon core transparency issues plaguing many industries, as it allows users to prove actual functionality. Take for instance, online casinos and poker websites – with a provably fair and self-contained contract, unscrupulous practices, cheating, and theft are eliminated on the service operator’s end.

Slow to fix

A core issue plaguing current use of smart contracts is that although the contracts are public – visible to all – bugs and security holes cannot be fixed quickly. Take for instance the 2016 attack and hack of The DAO.

Decentralized

Elimination of a central party or authority control over processing and single point of failure. Decentralized infrastructure allows for (1) high levels of fault tolerance, (2) attack resistance, and (3) collusion resistance.

Higher learning curve

With present programming knowledge and novelty of the blockchain, writing solid and comprehensive smart contracts can sometimes be difficult in practice and at the moment are only really useful for simple contracts (however, it’s progressing rapidly).

Fast block times

Quicker block times (averaging 10 to 20 seconds) allow for quicker transaction and confirmation times, allowing for a smooth running network.

Scalability

The network has historically been clogged and bloated with transactions, resulting in slower transaction and confirmation times. It’s estimated in order for Ethereum to permeate the mainstream, they will need to handle over 100,000,000 transactions per second (tps). At the moment, they only handle about 10-15 tps.

Turing-complete

Allows any system or programming language to compute anything that is computable (given sufficient resources), allowing for the deployment of smart contracts and decentralized applications. Think of a situation where your brother-in-law goes to a bar, has too many drinks, is detected by a car breathalyzer, and the key is automatically turned off, coupled with inflated insurance costs.

Centralization of ICOs

Buterin has stated although many ICOs are launched on top of a decentralized network, they still run the risk of centralization due to single development teams with high funding or companies controlling large amounts of money.

Robust ecosystem

Ethereum offers a platform for the launch of countless projects and tokens, laying an already established framework that can be built upon and improved.

Inflated transactional costs

Although Ethereum offers a cheaper alternative to Bitcoin’s alarming transaction fees, Ethereum has encountered issues with their algorithm which estimates transaction costs – oftentimes causing users, wallets, and exchanges to overpay by up to 70%.

5. Ethereum Common Use Cases

A list of CryptoKitties Built on the Ethereum Platform

In this section, we are going to take a look at three applications on the Ethereum network and see how they compare to traditional, centralized applications and models.

  • Basic Attention Token,
  • OmiseGO,
  • CryptoKitties.

Basic Attention Token ($BAT)

Seeking to revolutionize and overhaul the severely flawed and privacy invasive digital advertising industry, BAT is an open-source and decentralized digital advertising platform quantifying user attention span through browser engagement, ultimately reducing targeted ads.

BAT not only benefits users, but online publishers of content, who are able to cut out expensive advertising middlemen and overall fraud, in exchange or targeted user data collection – and overall, more bang for their buck.

OmiseGO ($OMG)

Supported by both Buterin and Wood, and sporting the motto “unbank the bank,” OmiseGO is Thailand-based Omise’s blockchain project enabling “real-time, peer-to-peer value exchange and payment services” via an agnostic, all-in-one financial clearing house and liqduity provider.

More simply, OmiseGO can be described as the missing link between traditional financial systems, mechanisms, and jurisdictions, allowing transactions across multiple blockchains or networks without the need of a trusted third-party gateway.

CryptoKitties

CryptoKitties is an Ethereum-based virtual game allowing users to buy, sell, and breed various types of virtual cats. In December, 2017, the game’s popularity soared, and is noted as one of the first attempts at deploying an application for recreational and leisurely purposes.

However, CryptoKitties popularity came at a cost to the Ethereum network, pushing traffic to an almost unmanageable standard, and acting as a major contributor towards a six-fold increase in pending transactions and costs on the Ethereum network. As mentioned above as one of Ethereum’s core weaknesses and disadvantages, CryptoKitties shed light on the network’s current lack of scalability.

So, how do the above three and other decentralized applications differ from centralized apps?

Centralized vs. Decentralized Apps

At its most fundamental, centralized applications are as their name implies, centralized – boasting a single cluster of servers containing all know-how and “logic” for executing necessary actions. Decentralized applications boast a radically different architecture where all know-how and logic is distributed and deployed across a network of nodes, or computers, without a single point of failure.

Below are just a few reasons why decentralized applications are becoming favored over centralized ones.

  • No single point of failure: As mentioned above, when data and transactions are being processed over various nodes across the network, there is no centralized cluster of servers to hack. Look no further than the 2014 iCloud leak of private photos of various female celebrities. Decentralized architecture stands to greatly impact traditional cloud storage through increased security and reliability, all at a cheaper cost.
  • Monetization: Decentralized applications are offering persons and businesses a completely new way to process and monetize transactions by saving money through the skirting of traditional financial mechanisms. Decentralized applications place competitive economic pressure on manipulative and market dominant players, offering users a cheaper and more effective alternative. Additionally, opting out of heavy startup costs and reoccuring fees allows for market permeation and longevity, along with increased traffic and userbase.
  • Opportunity: Centralized applications have leveled out over the years due to the extent to which centralized processing power and computational resources extend. By decentralizing processing power and security, processes and ideas we never thought possible are now being automated and brought to life.
  • Eliminate censorship: Through a decentralized and immutable blockchain, processes and institutions remain uncorrupted and online. In a world where government censorship is an all too present reality, decentralized applications offer an opportunity for dissenting opinions and ideas to flourish without fear of being taken down.

ERC20 Tokens

As we’ve been touching on this entire piece, the crux of Ethereum’s power and appeal is in its creation, powering, and diversity of smart contracts on the Ethereum network.

So, what happens when developers want to launch a project and token on the Ethereum network? You get an Ethereum Request for Comment, also known as an ERC20 token.

ERC20 is an Ethereum token technical standard standard guiding smart contracts and their functionality in the Ethereum ecosystem. The ERC20 standard exists to ensure predictability in performance and security amongst projects on the Ethereum blockchain. After all, given the vast amount of applications built on the blockchain, its important for stability purposes to have some sort of uniformity. Simply put, ERC20 exists so new applications and projects can work coherently with existing projects on the Ethereum platform.

As of January, 2018, there were more than 21,000 ERC20 tokens contracts on the Ethereum blockchain, including notable projects such as EOS, Qash, OmiseGO, Basic Attention Token, and more.

Curious about all the ERC-20 tokens out there? Check out this comprehensive list on Etherscan.

CoolWallet Storage Tip: Steer clear of saving any exchange, wallet, or other cryptocurrency passwords online. Instead, write down your pin and recovery seed on a piece of paper, make copies, and store them safely in your home or at a bank.

6. Who are Ethereum’s Competitors?

A logo of Ethereum classic

To get an idea of some of Ethereum’s most notable competitors, here is a non-exhaustive list of just a few making waves and giving ETH a run for their money.

Ethereum Classic ($ETC)

It shouldn’t be of much surprise that a contender to Ethereum market dominance is its other half of their contentious fork – Ethereum Classic.

Ethereum Classic is a decentralized, immutable platform running smart contracts, and a continuation of the original Ethereum blockchain – upheld by users fundamentally opposed to the post-DAO fork.

ETC community members were staunch “code is law” followers, and viewed the hard-fork as a cop-out to the originally intended immutability.

NEO ($NEO)

Formerly known as “Antshares” and similar to Ethereum, NEO is China’s answer to blockchain technology, currently boasting a top 10 market cap. NEO is creating a smart economy, fueled by digitized assets, and is focusing on the creation and deployment of decentralized applications, smart contracts, and ICOs.

What separates NEO from Ethereum is in its preemptive governmental compliance, a fundamental issue plaguing blockchain’s mass adoption. Additionally, NEO utilizes a currency similar to ether – known as GAS – which fuels the economy and pays out holders in dividends.

ICON ($ICX)

Referred to by crypto-enthusiasts as “Korea’s Ethereum,” ICON is in the midst of building one of the largest decentralized hyperledgers and networks with hopes of “hyperconnecting the world.” ICX supports a decentralized exchange, real-time transactions, and has accounted for interoperability with other blockchains.

ICX is backed by several government organizations and institutions, and building on the fervent Korean enthusiasm for cryptocurrency – at one point, Korea was transacting nearly 40% of Ethereum’s worldwide trade.

Cardano ($ADA)  

Created by Charles Hoskinson – a co-founder of Etheruem – Cardano is a fully open source and public decentralized blockchain, developing a smart contract platform aiming to deliver more complex and advanced features than any platform out there.

Cardano’s primary focus is on tackling scalability issues in the blockchain space while democratizing voting processes – both issues which have bedeviled Ethereum.

EOS ($EOS)

Labelled as the “Ethereum killer,” EOS is a blockchain architecture and operating system propelling the horizontal and vertical scaling of decentralized applications and is tackling Ethereum’s Achilles’ heel; scalability.

As transactions on the EOS blockchain scale vertically, and don’t have to “line up,” they are able to process millions of transactions per second, while eliminating user fees, and deploying applications by the thousands.

7. How to Buy ETH

A chart of Ethereum's price

Considering making your first (or 10th) Ethereum purchase? There’s no shortage of exchanges and platforms to purchase it, as it is listed on virtually every exchange out there and as a trading pair – due to its market longevity, adoption, and overall use.

Here’s a list of five reputable exchanges and platforms you can buy Ethereum on:

  • Coinbase: Assuming you are in one of the prescribed for countries, Coinbase is an easy-to-use and trusted platform for buying, selling, and managing digital currency, allowing users to purchase via debit-card or by linking their bank account.
  • CEX.io: This London-based exchange allows users to easily buy and sell Bitcoin with their Visa or Mastercard or by bank transfer, and provides services in 99% of countries around the globe and 24 U.S. states.
  • Changelly: Also allowing the purchase of BTC with Visa or Mastercard, Changelly allows users an easy-access platform to purchase and convert to ETH.
  • Binance: Although you can’t directly purchase crypto on Binance with fiat (USD, GBP, EUR), Binance offers a highly-trusted and comprehensive platform for purchasing Ethereum and all the altcoins based on it. All you have to do is purchase BTC from another exchange or platform allowing direct fiat purchases, transfer to Binance, and purchase.
  • ShapeShift: Similar to Binance, users cannot directly purchase ETH or BTC with fiat, but may transfer both in to purchase cryptos. ShapeShift does not collect personal data from users and does not pool user funds in company accounts – a unique feature amongst exchanges.

8. How Do I Store Ethereum?

First, a word of caution. Cryptocurrency storage and protection is still relatively in its infancy, and since the launch of cryptocurrency exchanges, there have been several notable exchange hacks – resulting in billions lost. You should not be putting money into cryptocurrency which you are not prepared to lose – whether it to market fluctuations, theft, or other circumstances.

When storing cryptocurrency, it’s highly advised if you keep more than one (1) month’s salary on an exchange or online platform, you invest in cold-storage, which includes:

  1. Hardware Wallets
  2. Paper Wallets

Although the most expensive of cold-storage options, hardware wallets also boast the highest degree of security. Think of purchasing and owning cryptocurrency like any other tangible asset, there are certain precautions that need to be taken in order to preserve it – maintenance and security should be at the top of your list.

After all, securing your tokens and coins for a small cost far exceeds the alternative – losing them to an exchange hack.

The CoolWallet S is your ultimate cryptocurrency safe, allowing you to secure your Ethereum, Bitcoin, Litecoin, Ripple, and Bitcoin Cash, all at your fingertips. CoolWallet S is completely offline, easy to set up, and pairs with your Android 5 (or later) and iPhone 5 (iOS 9.1 or later), and all for a reasonable price.

Using the CoolWallet S puts storage back into your hands, and offers you peace of mind that your crypto and investments are safe.

Paper Wallets

True to their name – requiring you to print a private key or QR code on a piece of paper – paper wallets are another effective method of cold storage to store your ETH and other crypto.

Paper wallets offer tangible security for investors, allowing you to keep your ETH (and other cryptos) in your actual grasp, cutting out the need for an intermediary device or service. And, for the cheap (and nearly free) cost of a piece of paper, they are the most economical of all wallet options.

Keep in mind that although you save on cost, you do run the risk of damaging or losing your wallet if not taken care of properly – losing your hard-earned ETH and crypto for good.

Desktop Wallets

Although, technically connected to the Internet, and considered a “hot wallet,” desktop wallets are a good starting point for first-time investors who aren’t holding large amounts of ETH or crypto.

Desktop wallets require a malware free computer and store your private key on your computer. As long as your computer is free of security weaknesses, then your ETH and crypto will be safe.

However, with rampant phishing and hacking in the online world, its not always easy to be 100% sure you are completely protected, making desktop wallets the most vulnerable of the three.

A word of caution for all three wallets, when sending Ethereum to your wallet, double check the address you are sending it to in order to make sure you are sending to the correct address.

9. Additional Ethereum Resources

Cryptocurrency is exciting because it stands to (and is in the process of) disrupt traditional financial, social, and political institutions, and supporting its message of decentralization, security, and efficiency is the medium in which it is conveyed.

Unlike the old days, where information was created, controlled, and distributed by only a handful of parties, failing to reach the masses and disguised in hidden agenda, cryptocurrency and blockchain places information and power back in the hands of the user – allowing or non-traditional (and modern) methods of dissemination.

Below are just some of the modern-day resources we recommend you take a look at in order to further acquaint yourself with Ethereum, its founders, community, and message.

  • Ethereum White Paper:  A formal definition and outline of the Ethereum protocol by founder Vitalik Buterin.
  • Ethereum Yellow Paper: A formal definition of the Ethereum protocol written by co-founder Gavin Wood.
  • Ethereum’s Website: Ethereum’s official website
  • Reddit: The public, anonymous, forum to discuss all things Ethereum and interact with notable members of the community and discuss hot topics.
  • GitHub: A web-based hosting system for computer code where Ethereum developers share, discover, and collaborate on projects.
  • Etherscan: A block explorer and analytics platform for Ethereum, allowing users to check and search the Ethereum blockchain for transactions, addresses, prices, and tokens.
  • Ethereum Twitter: The official Twitter of Ethereum, where code, social, and other updates are posted regularly.
  • Vitalik Buterin’s Twitter: Ethereum’s founder’s personal Twitter where he frequently engages with the community and posts about Ethereum’s progress.
  • Gavin Wood’s Twitter: Ethereum’s co-founder’s personal Twitter.
  • CoinMarketCap: A popular tracking tool and website to monitor cryptocurrency market cap rankings and charts.
3 Responses
  1. Andrea

    Although Ethereum offers a cheaper alternative to Bitcoin’s alarming transaction fees, Ethereum has encountered issues with their algorithm which estimates transaction costs – oftentimes causing users, wallets, and exchanges to overpay by up to 70%. A word of caution for all three wallets, when sending Ethereum to your wallet, double check the address you are sending it to in order to make sure you are sending to the correct address.

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