Ethereum

Ethereum is an open-source computing platform that is decentralized (running on computers around the globe). This platform executes programs that any user can create and run. To run these programs, you must pay using a cryptocurrency called ether.

Ethereum

This currency is a virtual coin that holds value and can be bought, sold or transferred, which is where most people focus their attention on Ethereum today. This cryptocurrency yielded incredible gains in value in 2017, making Ethereum not only an exciting computing platform, but also a currency in and of itself. Ethereum is second to only Bitcoin when measured by market capitalization.

Ethereum overview

Token/Cryptocurrency/Symbolether (ETH) Ξ
Current Ethereum Price: 1 ETH to USD
207.51 USD 1.29%
First TransactionJuly 30, 2015
FounderVitalik Buterin
Official Websiteethereum.org
AlgorithmEthash
MineableYes
Mining MethodProof-of-Work
Mining HardwareGPU

Who created Ethereum?

Ethereum was initially introduced by Vitalik Buterin in late 2013 when he released a white paper. The goal was to build decentralized applications through a common scripting language that alternatives like Bitcoin did not offer.

The start of the project was run by Ethereum Switzerland GmbH, while the Ethereum Foundation was created to manage the development and launch. The project was funded by a crowdsale that lasted from July to August of 2014 where the public could use bitcoin to purchase ether (the cryptocurrency token). These activities launched Ethereum as both a digital platform and a global currency.

What makes Ethereum different?

First, the creator is well known and accessible. While some other cryptocurrencies were created anonymously or through an alias, the Ethereum founders, team and organization are all widely known and still active.

Second, Ethereum enables smart contracts. A smart contract is just what it sounds like, a contract that is verified and facilitated through computer protocols. Where traditional contracts serve as an agreement between two parties, but often require the use of a trusted third-party intermediary (think of an escrow company for a home purchase), contracts using the Ethereum platform are verified and enforced without that third-party.

This innovation is lauded as the beginning of ‘programmable money’ and is the driver behind financial institutions’ interest in Ethereum’s underlying blockchain.

Third, Ethereum is truly multi-purpose. Some blockchain technologies are created purely for use as a currency. Ethereum serves not only as a development platform, but can also be used as a store of value and method of exchange (a currency).

What is Ethereum mining?

Miners are crucial to the success of the Ethereum platform. With traditional currencies, it is the job of the bank to issue currency and keep track of transactions. The Ethereum blockchain relies on the whole network to verify transactions on a public ledger. This ledger is maintained by miners who use their computers to solve cryptographic puzzles.

Ether’s release is time-based. It’s governance is built into the math behind it’s blockchain. As computers provide their computing power to the ethereum network they are rewarded for it with ether. When it is time to release additional ether to the network one miner becomes the recipient of that ether.

What kind of hardware is best for ETH mining?

One of the best parts of the Ethereum platform for most of us is that the average person with the right computer can profitably mine the currency. In fact, from inception it was a goal to make ether ASIC-resistant, allowing anyone to participate with off-the-shelf hardware.

It is possible to mine ether with a Central Processing Unit (CPU), which links up the hardware and software on a computer. However, it is more efficient by several magnitudes to mine with a Graphics Processing Unit (GPU), which is skilled at completing the same function repeatedly.  A GPU sounds fancy, but in layman’s term it is simply the chip inside a graphics, or video card.

“Mining rigs” are computers built specifically for cryptocurrency mining and are similar to high-powered gaming desktops. The main difference is that a single mining rigs (computer) has multiple GPUs to increase mining profits.