Beginners Guide To Etherium In Plain English

The 2nd biggest coin, after bitcoin, is ETH.

Ether (ETH) is the coin used to power Etherium. Etherium is a network that builds on the concept of bitcoin by adding programability.

What is the main difference? Bitcoin can be thought primarily as a store of value. Etherium can be thought primarily as a platform to run applications. Both ETH and bitcoin are purchased, stored and traded in the same way.

 How do you buy ETH? You can do so on the following exchanges: 

What Is ETH?

Like bitcoin, ETH is a cryptocurrency. A cryptocurrency is a digital currency secured by cryptography.

ETH isn’t a coin. It isn’t a note or a bar of metal. ETH takes the form of a number and it resides in computers. You can send it to someone else just as easily as you send an email.

Why does it have value? 

ETH has value because people choose to give it value. That’s also true of art, precious metals and currency. It can be worth a lot or a little, depending on the value people choose to give it.

What makes ETH different from currency? 

The main concept to understand is that eth is decentralized.

Eth transactions don’t require a third party to validate a financial transaction. Any two people, anywhere in the world, can send bitcoin to each other without the involvement of a bank, government, or other financial institution.

It’s easier to send than money. It’s faster. The transaction fees are much less than those charged by banks. It’s a more efficient form of currency.

Many people like the idea of having control of their own money, rather than letting banks control it.

How can ETH eliminate third party verification?

Every transaction involving eth is tracked on the blockchain.

A blockchain is simply a ledger. Unlike a ledger that can be changed, the blockchain writes new “blocks” each time transactions are created, adds them to the previous block and thus creates an immutable chain. The blockchain is a historical record of every transaction ever made using eth.

You can see the first ever eth transaction here.

Why is ETH attractive as an investment? 

After the 2008 financial crash, many people lost faith in banks.

After governments reacted by printing more and more money, many people lost faith in currency as a store of wealth. Interest rates have remained low.

Not great for savers.

Etherium is an ecosystem that might one day rival traditional banks, the finance industry and the execution of contracts.

Or it might be a fad, as many pundits like to claim.

At this point, eth is a highly speculative investment class. Investors should consult an investment advisor before making investments decision and risk no more than they can afford to lose.

Further Reading: