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What is Ethereum? The Ultimate Beginner’s Guide

Beginners Guide to Ethereum

Ethereum is the second-biggest player in the cryptocurrency world today. Founded only 4 years ago by Vitalik Buterin, the Ethereum platform has seen remarkable growth in its short lifetime. If any coin is able to usurp Bitcoin’s position as the most valuable cryptocurrency in the world, Ethereum may just be the one. In this guide…

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Ethereum is the second-biggest player in the cryptocurrency world today. Founded only 4 years ago by Vitalik Buterin, the Ethereum platform has seen remarkable growth in its short lifetime. If any coin is able to usurp Bitcoin’s position as the most valuable cryptocurrency in the world, Ethereum may just be the one.

In this guide we’ll explain what makes Ethereum so promising and tell you everything you need to know to start investing. Topics to be covered in this article include:

Let’s jump in!

While Bitcoin is first and foremost a blockchain currency, Ethereum is a blockchain platform. Ethereum allows developers to utilize blockchain technology for a wide range of purposes, with virtual currencies being just one of an infinite number of possible applications.

The Ethereum cryptocurrency is called ether. Ether is often referred to as the “fuel” of the Ethereum network. Anyone looking to make use of the Ethereum platform pays a transaction fee in the form of ether. These transaction fees cover computing costs and keep the network running smoothly.

The ether token can also be used for a number of other purposes, not least of which is buying alternative cryptocurrencies. Whenever you hear someone talking about the value of Ethereum, they’re more than likely talking about the value of ether. Though technically not the same, the terms are often used interchangeably.

The Blockchain

This section will be pretty familiar to those of you who have already read our Ultimate Guide to Bitcoin, but here’s a refresher for those who haven’t.

The blockchain is a powerful technology pioneered by Bitcoin founder Satoshi Nakamoto that allows for secure, unalterable record-keeping without a trusted central authority. In Bitcoin, this takes the form of a public ledger which records every single Bitcoin transaction. A peer-to-peer network of nodes processes each new transaction and bundles them with other transactions in “blocks”. These blocks are then attached to the previous end of the blockchain using advanced encryption methods. Once a block is added, every single node in the network is notified and updates their copy of the blockchain.

This is an oversimplification of the process, but the point is that the public record of transactions is distributed across the whole network, rather than being stored in one central location. Blocks are essentially unchangeable once they are attached to the chain, which makes for a system that is both extremely secure and surprisingly transparent.

Ethereum has taken the blockchain and broadened its use beyond currency, instead focusing on decentralized applications.

Mining

The Ethereum network is maintained by volunteers known as Ethereum miners. Ethereum mining is very similar to Bitcoin mining. In short, miners carry out the computations required to process and validate new blocks.

Currently, Ethereum uses a proof-of-work system similar to Bitcoin’s to determine which miner gets to add each new block to the blockchain. Proof-of-work essentially requires miners to use computers to guess the answer to a difficult puzzle until one of them finds the answer. Mining requires extremely powerful computers in order to be competitive and is consequently very costly. Miners are rewarded for the valuable service they provide to the network with 5 ether for every new block they add to the blockchain. This incentivizes the miners and keeps the network running smoothly.

Ethereum Mining Rig

Ethereum will soon be transitioning away from proof-of-work toward a new system called proof-of-stake. This new system would randomly award blocks to users based on token ownership rather than their ability to compute the answer to a puzzle. This should be a less-costly option and result in a more distributed network of miners, rather than a handful of large mining operations.

The Ethereum Virtual Machine

While the idea of the blockchain was largely borrowed from Bitcoin, the Ethereum Virtual Machine (EVM) is something entirely new. Every node in the Ethereum network runs a copy of the EVM, creating a sort of world computer that allows any individual computer to run any application, if given enough time and memory.

In contrast to most other blockchains, which can generally be used for a very limited range of operations, this technology makes Ethereum extremely flexible. The most prominent examples of uses are smart contracts, decentralized autonomous organizations, and decentralized applications.

Smart Contracts

A smart contract is essentially a computer program that automatically executes a set transaction when certain conditions are met. Two individuals can anonymously “sign” a smart contract and the contract will be preserved on the public blockchain. When the conditions of the contract are met, it executes itself and this new state is updated on the next block in the blockchain.

Smart contracts aren’t limited to only monetary transactions either. Content, property, and anything else you can think of can be used as a reward for meeting the contract’s conditions. Smart contracts are appealing because they are anonymous, secure, flexible, and they don’t require any third-parties to be carried out.

Decentralized Autonomous Organizations

Decentralized Autonomous Organizations (DAOs) are essentially smart contracts taken to the scale of an entire organization. Organizational processes could be written into code and run automatically rather than relying on an actual hierarchy of individuals to carry them out.

DAOs are an incredibly ambitious application of the Ethereum network. The upshot of this kind of an organization would theoretically be extreme efficiency and lack of corruption. The downside though is that implementing this kind of a system would require incredible foresight. Smart contracts are very difficult if not impossible to alter once they’re live, so any oversights or coding errors would be a major liability. This is exemplified by the most famous DAO in Ethereum’s history, simply called The DAO, which was exploited by hackers to steal about $60 million of investors’ funds. The money was eventually returned, but The DAO Event serves as a stark warning for what can happen if coding is flawed.

Decentralized Applications

Probably the most exciting use of the Ethereum network is decentralized applications, better-known as dapps. A dapp is exactly what it sounds like: an application that utilizes the decentralizing power of the blockchain.

Dapps have several advantages over traditional applications. Perhaps the biggest is that dapps have no central point of failure. It’s common today to hear about thousands or millions of people’s data being compromised or stolen as a result of hacks or server malfunctions — the Equifax scandal in 2017 comes to mind. Dapps don’t suffer from these types of problems because of the security and decentralization of the blockchain.

Beyond security, another advantage of dapps over traditional applications is that dapps are not susceptible to server outages. Dapps are maintained by a network of thousands of nodes which act as mini-servers. A dapp could only be “down” if the entire network were down.

Best of all, dapps don’t require any change in the front-end user interface, meaning that dapps can reap all the benefits of decentralization while remaining indistinguishable to most users from the traditional applications they are used to.

Ethereum Exchanges

The most convenient way to buy Ethereum is on an online exchange. Exchanges allow users to buy, sell, or trade Ethereum for fiat currency or alternative cryptocurrencies. There are many exchanges to choose from and they each have their pros and cons.

Here’s a quick look at some of our favorites exchanges:

  • Coinbase – Coinbase is one of the oldest and most trusted exchanges around today. Its website is very intuitive and allows users to easily buy or trade 4 of the most popular cryptocurrencies: Ethereum, Bitcoin, Litecoin, and Bitcoin Cash. Coinbase charges very low transaction fees and allows users to purchase the above cryptocurrencies using credit cards, debit cards, and bank transfers. Coinbase is particularly good if you’re new to cryptocurrency, though it may lack some of the bells and whistles of other exchanges.

Coinbase Buy Ethereum Platform

  • Gemini – Gemini is a great option for those looking for a slightly more advanced trading platform. Founded in 2015, Gemini is a relatively young exchange but it’s quickly become one of the most popular. Gemini offers some more sophisticated trading technology compared to Coinbase but still remains pretty user-friendly. One of Gemini’s big selling points is its very low fees, averaging around 0.25% or less. Gemini allows users to buy either Ether or Bitcoin using ACH bank transfers and bank wires.
  • GDAX – GDAX is another great option for more advanced cryptocurrency trading. This exchange is owned by the same company as Coinbase and holds a similar industry reputation. The difference is that GDAX is less user-friendly and geared more toward serious traders. Like Gemini, GDAX charges very low fees of 0.25% or less and accepts ACH bank transfers or bank wires.

These are just three of the numerous exchanges on which users can buy Ethereum. For a more in-depth look at these and other exchanges, check out our guide to the Best Bitcoin, Ethereum, and Altcoin Exchanges of 2018.

Ethereum Wallets

Before purchasing any Ethereum though you’ll first want to make sure that you’ve set yourself up with an Ethereum wallet. Wallets serve the important function of protecting your Ethereum when it’s not in use.

Your wallet doesn’t actually store your ether. Instead, wallets store the alphanumeric keys and addresses that allow you to send or receive ether.

Private Keys and Ethereum Addresses

A private key is a long string of alphanumeric characters that is used to “sign” transactions to verify that you are the one sending your ether. As the name suggests, it is critical that you keep your private key secret. Anyone with knowledge of your private key would be able to steal your ether. Protecting your private key is your wallet’s primary purpose.

Ethereum wallets also store your Ethereum addresses. An Ethereum address is another long string of alphanumeric characters, but an address is used for receiving ether instead of sending it. It is not necessary to keep your Ethereum address secret in the same way you keep your private key secret. Your Ethereum address is cryptographically derived from your private key, but there is no way to determine your private key simply by looking at the address. Giving someone your address allows them to send ether to your wallet.

Wallet Types

Ethereum wallets fall into 5 main categories:

  • Online – Online wallets are accessible through a web browser. The main advantage of online wallets is that you can easily access them anywhere you can access the internet. The major downside is that your private keys are typically stored on the wallet’s servers, which means your ether is only as secure as their servers. For this reason, we only recommend using online wallets for small amounts of ether.
  • Desktop – Desktop wallets are software programs that you install onto your computer. These wallets are typically more secure than web-based wallets because your keys are stored on your computer rather than online. That being said, your computer is still susceptible to viruses or other malware that might have the potential to steal your ether, so they still are not ideal for large amounts of ether.
  • Mobile – Mobile wallets are apps installed onto your phone or tablet. Mobile wallets either store your private key locally on the device (similar to a desktop wallet) or they store your private key online (like a web-based wallet). Mobile wallets offer the convenience of being able to use your ether on the go, but they also suffer from the same security risks as online or desktop wallets.
  • Hardware – Hardware wallets are physical devices that store your private keys offline in “cold storage”. These devices are small and plug into your computer via USB whenever you need to access your ether. These hardware devices are immune to viruses and are generally considered to be the most secure wallets available. The only real downside of hardware wallets is that you have to pay for the physical hardware, though recent wallets like the Nano Ledger S are very affordable.
Hardware Wallets Trezor, Ledger, KeepKey

Hardware Wallets Trezor, Ledger, KeepKey

  • Paper – Finally, paper wallets are an alternative method of offline cold storage. They are physical pieces of paper with your public and private keys written on them. Paper wallets are generally inferior to hardware wallets, as they are both less convenient and less secure.

Once you’ve selected wallet type and purchased some Ethereum from an exchange, you’re ready to start making transactions using Ethereum.

Ethereum transactions work in much the same way as Bitcoin transactions. Paying someone in Ethereum is as simple as entering in their address along with the amount you’d like to send.

Receiving ether is equally simple. Just give the other party your address and they can send you the ether.

  • Broad range of applications – The biggest thing Ethereum has going for it is that it is much more than just a cryptocurrency. Ethereum is first and foremost a blockchain-based software platform. Ethereum’s blockchain is already being used as the foundation for thousands of applications, and the possibilities for future applications are limited only by programmers’ imaginations.
  • Supported by other coins – One kind of application that naturally lends itself to being built on a blockchain is of course a cryptocurrency. Sure enough, the Ethereum network serves as the foundation for hundreds of smaller coins. Most of these small tokens adhere to what’s called ERC-20, which is essentially a set of rules that define how tokens should operate on the Ethereum network. Because most tokens follow these rules, tokens of different types can be used the same all across the Ethereum network. These smaller coins bolster the value of the Ethereum network as a whole.
  • Central leadership – Ethereum is backed by an organization with leaders and developers actively trying to make Ethereum succeed. This stands in contrast to Bitcoin, which was created by an almost mythical individual going by the name Satoshi Nakamoto, who wrote the Bitcoin white paper and then disappeared not long after. The team behind Ethereum regularly updates the platform and advocates for it in the world. This type of leadership could help Ethereum grow and adapt to the needs of its users over time.
  • All the other benefits of a cryptocurrency – As a blockchain-based cryptocurrency, ether enjoys many of the same advantages as other cryptocurrencies like Bitcoin. Namely, the Ethereum network is secure, pseudoanonymous, decentralized, and international.

  • Volatility – Much as Ethereum shares many of the same advantages as other cryptocurrencies, it also shares many of the disadvantages. Probably the most significant of these is that Ethereum is very volatile. The value of 1 ether rose by over 10,000% over the course of last year, so the overall trajectory has been incredibly positive. But market swings can be drastic, and it’s common to see the value of Ethereum go up or down by 5 percent or more in a single day. As with any other investment, only invest what you can afford to lose.
  • Smart contracts are only as secure as they are programmed to be – This one is fairly self-explanatory. The Ethereum network as a whole is incredibly secure. Individual smart contracts, however, may be less-so. That being said, this is becoming less of an issue as developers on the platform are becoming more experienced coding these types of applications. Plus, many of the basic smart contracts that most users use have become standardized and are completely safe.
  • Central leadership, again – It might seem silly to have central leadership as both an advantage and a disadvantage, but some cryptocurrency insiders see Ethereum’s leaders as more of a threat to the network than a benefit. This is exemplified by how The DAO Event was resolved. I mentioned earlier that investors in The DAO whose money had been stolen eventually had their money returned. Technically this shouldn’t have been possible as all Ethereum transactions, like Bitcoin transactions, are final. But the Ethereum leaders decided to step in and essentially rewrite the block on which the money was stolen. Some thought this move was justified, while others said that it compromised the integrity of the network. This divided the Ethereum community and resulted in two separate networks: Ethereum (the primary network and the subject of this article), which was built off of the rewritten block, and Ethereum Classic, which continued their own blockchain based off of the original unchanged block. The decision is still contentious and raises questions about how decentralized the network truly is.

Calling Ethereum a cryptocurrency feels insufficient, because it is so much more than that. Ethereum is a platform that allows developers from all around the world to utilize the power of blockchain technology for any application they want to create. Smart contracts and dapps have the potential to revolutionize a wide range of industries, and given that Ethereum has only been live for about 2 years, that potential has only just begun to be explored.

This expansive network puts Ethereum in a truly unique position in the cryptocurrency world. Owners of ether have more than just a piece of digital currency; they have a stake in something special.  

Source: https://unhashed.com/cryptocurrency-coin-guides/ethereum/

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A Face Too Sexy For Social Media

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Fullmetal Magdalene

Being a 90s kid I don’t remember a time where female sexual empowerment wasn’t a hot topic. When Madonna kissed both Britney Spears and Christina Aguilera in their 2003 VMA performance people were shocked to see such behavior on TV. Fast forward to today where WAP has over 400 million views on YouTube with no age restriction on the video, photos and videos of scantily clad women flood all social media platforms, and popular streaming service Netflix hosts Cuties, a film featuring what some critics describe as ‘soft core porn’ involving girls at the young age of eleven.

As a female artist who explores my own relationship to feminine sexual energy in my works, I began posting my art to my social media accounts with no concern that any of them would be viewed as obscene or breaking community guidelines. None of the women in my pieces are engaged in sexual acts and they were created with the intent of exploring the female experience rather than as visual aids for sexual gratification. In fact, I have been met with criticism from viewers that my work is not sexually explicit enough for their liking.

My current NFT art series titled ‘Crypto Sluts’ plays with tongue-in-cheek sexual innuendo but is some of my most demure work. Each piece in the series features a portrait of a beautiful woman, face flushed and eyes rolled back in ecstasy, with a round item on her tongue sporting her favorite Cryptocurrency’s logo. ‘Crypto Slut’ is a self descriptive term I use for myself as I am not a maximalist for any crypto project but rather I prefer to experiment with them all. The collection itself is a representation of the passion I have witnessed the crypto community showing for their favorite projects, so Crypto Sluts felt like a perfect title. Innuendo aside, each piece shows absolutely no sexual activity nor adult theme. It’s drawn leaving interpretation completely up to the viewer, including what that round item on her tongue might be.

When the art reveal video for my Bitcoin Slut caught some traction on YouTube it was met with a near 50/50 like to dislike ratio and the comments were ‘WTF?’, ‘Why…’, and ‘I am utterly disgusted’. Unexpected but not terrible. Twitter flagged multiple posts of mine for using the word ‘Slut’ but I was able to resolve that. The most shocking was what happened on TikTok. TikTok is a platform where videos of girls under the age of 18 twerking in crop tops and booty shorts, strippers in the club dancing on stage, and women discussing working as Sugar Babies have hundreds of thousands of views. Artwork from my Crypto Sluts collection was flagged as ‘Adult Sexual Content’ so many times on TikTok that I was eventually restricted from posting. Each time my work was flagged I appealed and each time the team said that after review my posts were found to have in fact broken the platform rules of no adult sexual activity and were permanently removed. Compare this to Minds, a platform that requires users to flag NSFW content or face a channel strike. Not only am I not required to flag my Crypto Sluts as NSFW, but they are eligible for promotion across the site (Minds does not allow promotion of NSFW material and all promotions are reviewed by the platform).

I’ve experienced inconsistent censorship of my art before this, but this is the most perplexing circumstance. This and previous instances have created blurred lines of what is too sexy for social media and leaves me confused. Whereas I started publishing my work believing it would be met with general platform acceptance when compared to the content already being hosted, I now lack confidence in my ability to continue to share my art on social media with out fear of losing my entire account.

PlatoAi. Web3 Reimagined. Data Intelligence Amplified.

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Source: https://medium.com/@fullmetalmagdalene/a-face-too-sexy-for-social-media-1fbb8d181872?source=rss——cryptocurrency-5

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Post-Bitcoin’s Mild Drop, El Salvador’s Bukele Reveals Excitement For A Larger Bitcoin Dip

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Why Bitcoin Is Unlikely To Ever Experience Another March-Like 50% Price Drop

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Key Takeaways 

  • President Nayib Bukele is unfazed by Bitcoin’s price dip to $60k.
  • Bukele teases need for lower lows in a bid to tap into perfect entry point. 
  • El Salvador shows no sign of disposing its Bitcoin holdings in the long term.

The president of El Salvador is showing himself to be unshaken by Bitcoin’s price volatility. President Nayib Bukele is beginning to adopt the culture of calmness that many Bitcoin proponents have shown over the years when the market is hindered by a price drop.

In a recent tweet, the President is seen asking his followers whether to buy the dip or not. He then proceeds to tease the need for Bitcoin to drop even further, so as to allow him an opportunity to buy the asset at a much lower price.

“Should we buy the dip?

Or is it too small?

Come on guys, we need a better discount here!” said Bukele in a recent tweet.

The concept of buying low and holding till the price of Bitcoin goes higher is one that key players have preached and presented continuously as the least risky and most promising way to hold Bitcoin.

Because maximalists’ views are often tied around the belief that Bitcoin has more upside potential in every market —whether bearish or bullish— the act of holding regardless of how low the prices drop, is an indicator that the holders’ sentiments are bullish in the long term.

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BTCUSD Chart By TradingView

For President Nayib Bukele who has expressed similar views in the past, it is clear where he stands with Bitcoin at this time. Recall that back in September, El Salvador bought an additional 150 Bitcoins, following the selloff that caused Bitcoin to shed $5,000 and sent its price down to $45,000.

Although Bukele’s methods have attracted criticism from many onlookers, his pattern of buying the dip is a bet that could pay off greatly in the long term.

In the past, long-term holders have also seen the most success with Bitcoin. Reports from on-chain analytical platform Glassnode have recorded holders who have not sold their assets for more than 3-years.

Notably, last year, when the price of Bitcoin hit $20,000, these holders saw their asset value surge significantly. However, for institutions and traders, the culture of exiting to avoid a perceived bear trend is normal. But for El Salvador, the question of selling seems to be out of the picture for now.

PlatoAi. Web3 Reimagined. Data Intelligence Amplified.

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Source: https://zycrypto.com/post-bitcoins-mild-drop-el-salvadors-bukele-reveals-excitement-for-a-larger-bitcoin-dip/

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6 Common Mistakes of Crypto Beginners – Be Extremely Cautious!

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It takes more than diamond hands to succeed in this space

Don’t let yourself be blinded by greed! Photo by Thought Catalog from Unsplash

First rule: Don’t lose money

Second rule: Make money.

And always follow this order.

You’ve heard of people having 100x gains (or more!) on their crypto assets, it sounds amazing, right…

PlatoAi. Web3 Reimagined. Data Intelligence Amplified.

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Source: https://medium.com/yardcouch-com/6-common-mistakes-of-crypto-beginners-be-extremely-cautious-eb848e2c9ac8?source=rss——cryptocurrency-5

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