How to use Ethereum
What is Ethereum?
Ethereum (ETH) is a decentralized application platform with smart contract capabilities developed in 2013 by Vitalik Buterin, who was 19 at the time. The crypto assets used on Ethereum are called Ether (ETH).
In Japan, the two words "Ethereum", which means platform, and "Ethere", which means cryptocurrency assets, are often confused as "Ethereum", but the two are different. is. In this article, the platform is referred to as "Ethereum" and the crypto assets are referred to as "Ethere".
Here, we will explain in detail how Ethereum works, how to purchase Ether, types of Ethereum wallets, and so on.
About decentralized applications on Ethereum
Decentralized applications on Ethereum are aimed at "making users more control over their online data." In order to use these applications, you need to learn more about how Ethereum works and the crypto asset Ether.
Ethereum is sometimes referred to as a "world computer" because it is a platform that has the potential to connect computers around the world across national borders. It is also said that as Ethereum continues to evolve, users will enjoy alternatives to technology platforms such as Facebook and Google that they have relied on. It is generally believed that Ethereum gives users free control over their digital information.
However, there is always a fee called Ether to make such controls on Ethereum. Apps on Ethereum need Ether, even if you just post a short message on your blog.
It is not free due to the limited computing resources on Ethereum. The more people use the platform, the higher the fee will be. Currently, the number of services that work with Ethereum is very large, and the fees are also high.
In this respect, Ethereum is often described as still unfinished. This is due to a challenge called the "scalability problem". Scalability issues are "a negative cycle in which increased transaction volumes result in processing delays and higher fees paid to miners."
To solve this problem, a major update of Ethereum, "Ethereum 2.0", is gradually being introduced. This update is expected to theoretically increase network security while lowering fees.
The apps on Ethereum may not be as intuitive as the native apps we use every day today, but anyone with a computer or smartphone can access them using Ether. It is possible.
Types of Ethereum wallets
Before you get Ether, you need a place to store it. This is called a "wallet". Ethereum wallets are used to store crypto assets, much like a wallet for storing currencies in the real world.
The Ethereum wallet stores the user's private key. It's like the password you use to access Ether. Keys are represented by a string of random letters and numbers, such as:
Example: 073d9dbee8875e7c91422d80413c85ba5e8e9fe7cad5dc001871dac882d07f2f
There is one big caveat when it comes to crypto asset wallets. Losing or leaking the private key means losing Ether forever, so care must be taken in managing it.
Now let's see what kind of wallet is actually available.
Desktop wallet / mobile wallet
A wallet that can be used by installing a computer or smartphone app is called a desktop wallet or mobile wallet. It is highly portable and convenient to use anywhere you have the Internet.
Desktop wallets and mobile wallets can be divided into "cast dial wallets" and "non-cast dial wallets".
A custody wallet is like a "protected", where the wallet provider manages the user's private key. This is a useful feature for Ethereum beginners and users who are worried about losing their private key. However, this type of wallet poses a risk of being hacked because the user relies on a third party to manage the private key.
One non-cast dial wallet is "unprotected". Only you can manage your private key. For users who want complete control over their funds, a non-cast dial wallet is the way to go.
Hardware wallet
A hardware wallet is an electronic device about the size of a thumb and can be expected to be more secure. These devices are made for security and are disconnected from the internet. You can sign transactions and send Ether even when you are not online. Hardware wallets are much more difficult to hack, so they are safer and better suited for people with high Ether holdings.
Popular hardware wallets include Ledger and Trezor.
Paper wallet
This is a paper wallet with an address and private key printed on it. It is envisioned that the private key will be printed or handwritten on paper and stored in a safe place such as a safe deposit box. This is also a relatively safe wallet because you don't have to worry about hacking.
How to buy Ether
Now that you have a better understanding of wallets, I would like to explain in detail how to purchase Ether. There are several ways to buy Ether.
Use cryptocurrency exchange
The easiest way to do this is to use a cryptocurrency exchange that sells Ether. Popular exchanges such as Coinbase and Kraken allow users to purchase Ether directly using Japanese Yen or Bitcoin (BTC).
These exchanges are typically Know-Your-Customer (KYC) and verify the identity of the user before purchasing crypto assets from the platform. Also, if you want to buy Ether in a currency other than Japanese Yen, you may need to take additional steps.
Use Ether ATM
Although it does not exist in Japan at this time, it is possible to use hundreds of Ether ATMs scattered all over the world. With CoinATMRadar you can find out where your ATM is.
Since ATMs can only be used directly on the spot, there are some inconveniences, but there are also advantages. Cryptocurrency exchanges can only make digital payments such as credit cards, but ATMs can make cash payments. Also, cryptocurrency exchanges can take several days to send Ether, but ATMs can send it on the fly.
Buy Ether directly from a third party
Some privacy-conscious users do not want to use a centralized cryptocurrency exchange that requires an ID. It seems that these users may also have the option of meeting in person to buy or sell Ether.
Ethereum meet-ups and sales are frequent in some large cities, such as the United States and Europe, but in less populated areas this can be difficult to achieve.
What can you do with Ether?
Now that you understand how to buy Ether, let's learn how you can actually use Ether.
As mentioned at the beginning, Ether can be used as a fee when using Decentralized Applications (DApps) on Ethereum. DApps are built on Ethereum's smart contracts (a mechanism that automatically executes contracts without human intervention), so users do not have to rely on third parties.
Examples of DApps include:
CryptoKitties: A game that collects and breeds cats with unique looks. The big difference between regular collection games and games on Ethereum is that users have more control over their digital collections.
This means that in other games the collected work will lose data if the company that created it goes bankrupt, but that doesn't happen on Ethereum, so users can collect the collected digital cats. ..
PeepEth: PeepEth is like Twitter for DApps. Twitter has a function to delete accounts and tweets when Twitter decides that it is not desirable. However, in PeepEth, although the moderator manages to prevent spam and inappropriate posts, the content actually posted (called peep) cannot be deleted.
DeFi: DeFi (Decentralized Finance) is a term that refers to a set of financial applications built on Ethereum. DeFi is a further evolution of blockchain technology that allows you to manage your financial assets autonomously without the need for a centralized system.
Some Ethereum apps have their own tokens derived from Ether. Users must exchange tokens with Ether to use them. For example, in Decentraland, a virtual space on the blockchain, users can buy virtual land.
There are over 3,000 such DApps listed on Ethereum. Many of them are promising and trusted services and projects, but some are suspicious, so we don't recommend using Ether for unverified apps.
lastly
In this article, I introduced the difference between Ethereum and Ether, the types of wallet for storing Ether, how to use Ether, the Ethereum app, and so on.
Ethereum is a decentralized platform that is expected to have a major impact on our lives in the near future. Let's continue to look at Ethereum, which will continue to evolve.
What is Ethereum?Features / Mechanism / Purchase method
Supervisor: techtec Research Team, Inc.
Operates a blockchain online learning service "PoL" that "the more you learn, the more tokens you get". As a leading blockchain company originating in Japan, we have entered into partnerships with well-known projects around the world and are also developing a research business on overseas trends. Twitter: @PoL_techtecSee other Ethereum beginner's guides
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