Source: CNBC
Ethereum, the second-largest cryptocurrency by market capitalization, is a blockchain network that operates smart contracts. It is commonly seen in the charts next to Bitcoin.
However, Ethereum is not in direct competition with Bitcoin. They serve different purposes – goals, features and technology.
Ethereum is powered by the Ether token that allows its users to make transactions, including staking (which enables earning interest), utilize and collect non-fungible tokens (NFTs), buy and sell cryptocurrencies, and many more features for entertainment while earning.
Numerous crypto enthusiasts deem Ethereum to be the internet’s next phase. If Apple’s App Store, one of many centralized platforms, constitutes Web 2.0, then Ethereum, a decentralized network, is Web 3.0.
Decentralized finance (DeFi), decentralized exchanges (DEXs), decentralized applications (DApps) are among the facets this “next-generation web” offers.
An Ethereum wallet is a fragment of software or hardware that enables the engagement within the Ethereum blockchain. Wallets enables users to oversee and handle their accounts on the Ethereum network.
An Ethereum account is a type of account that allows users to track their balance and send transactions. Users may use as many Ethereum addresses as they want to create smart accounts, send and receive funds, engage with decentralized applications and many more.
Now, let’s get you to the gist of mining Ethereum. Cryptocurrency mining is a system of answering complicated mathematical problems. Miners, the individuals who are into crypto mining, are basically the backbone of numerous cryptocurrency networks.
Miners allocate a lot of time and effort in calculating those math problems, rendering the “proof-of-work” for the network, which validates Ether (ETH) transactions. Like Bitcoin, Ethereum utilized a proof-of-work (PoW) consensus process as of the moment. But will later shift to a proof-of-stake (PoS) mechanism.
Miners are also responsible for creating new Ether tokens through this process, as they receive rewards in Ether for successfully completing a PoW task.
There is still a lot to learn about the cryptocurrency dealings but these are the basics everyone needs to be aware of.
