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Scallop Learn
  • Guides
    • Welcome to Scallop Learn
    • Crypto
      • Basics
        • Don't Feel the FOMO - Crypto Slangs Explained
        • Blockchain: What is it?
        • What is an Exchange?
        • What are Stablecoins?
        • What is the Metaverse?
        • What are NFTs?
        • History of Bitcoin
        • What is Binance Smart Chain?
        • What is an IDO?
        • What is Staking?
        • Token Burning
        • Debunking Crypto Myths
        • The Crypto Dictionary
        • What is DYOR?
        • What is a Neo-bank?
        • Proof of Work vs Proof of Stake
        • Exploring Crypto Communities: How to Join and Connect with Like-Minded Enthusiasts
        • What is a DAO?
      • Intermediate
        • Scallop Chain Faucet: All you need to know!
        • Layer 2
        • Liquidity Pools
        • ETH 2.0 - The Merge
        • Centralised Exchanges VS Decentralised Exchanges
        • Web 3.0
        • Regulation
        • REIT's on the blockchain
        • The Future of Business Payments: How Crypto Payment Partners are Leading the Way
        • What Is A Crypto Card? How Does It Work?
        • Blockchain and AI
        • Why are regulations essential in Crypto Market? How does Scallop lead the way?
        • Banking on Blockchain
        • E-money Tokens
        • The Power Surge of Cross-Chain Interoperability in Blockchain's Future
        • Crypto Trading 101: Must know candlestick patterns for a successful trade
        • Exploring blockchain innovations and their real-world breakthroughs
        • Do not miss these common indicators of the crypto bull market
        • Decoding the Dynamics of Permissioned Blockchain Consensus Mechanisms
        • Summary
      • Advanced
        • Can Quantum Computers be a potential threat to Crypto?
        • Unlocking the cryptocurrency potential: How Banks can thrive in the digital age?
        • How do privacy-enhancing technologies ensure anonymity on the blockchain?
        • What Does Fintech Mean? Understanding the Intersection of Finance and Technology
          • Decoding Data Tokenisation: Its Vital Role and Relevance
        • Unravelling the Concept of the Time Value of Money: Its Implications and Applications
        • Unlocking the Potential of Real-World Assets
        • What is Byzantine fault tolerance?
        • Global Crypto Adoption and Its Potential Socio-Economic Impact
        • How ZK-Rollups are Supercharging Blockchain Transactions?
    • Security
      • Skimming of Credit and Debit Cards: What You Need to Know
      • How Blockchain Security Can Keep Your Crypto Safe?
      • Keeping Your Account Safe
      • Money muling scams: What are they and how can you avoid them?
      • Beware of these common frauds while using payment cards
    • Tutorials
      • Scallop App
      • Scallop Ramp
    • Markets
      • How are cryptocurrencies taxed across the globe?
      • What Can You Do On An Exchange?
      • Avoid FOMO To Plan A Recovery: 5 Things To Do In A Crypto Bear Market
      • Inflation
      • Meme Coins vs Altcoins
      • The Basics Of Investing
      • The Ripple Effect
      • Central Bank Digital Currencies: A Global Revolution and Impact
    • Know Your Crypto
      • Bitcoin
      • Ethereum
      • Binance Coin
      • Cardano
      • Optimism
      • Ripple
      • Solana
      • USD Coin
      • Polygon
      • Tron
      • Avalanche
      • Tether
    • Defi
      • Defi Introduction
      • Borrowing and Lending: Aave
      • Borrowing and Lending: Compound
      • Tokenisation
      • Defi projects: Terra
      • Wrapped Bitcoin
      • Summary
      • A Practical Guide: The Defi Walkthrough
      • Summary
  • Scallop
    • What is Scallop?
    • Products
      • Scallop Banking
        • Tips And Tricks For Getting The Most Out Of The Scallop App
      • Scallop Exchange
        • Getting started on Scallop Exchange
        • Trading Futures
        • Trading with Margin
        • Buying Ethereum on Scallop Exchange
      • Scallop Chain
        • Tech
          • Scallop Bridge Contracts
          • Configurations
          • Relayers
          • Launch Your Dapp on Scallop
          • Developing and Deploying Contracts​
          • Scallop Explorer​
          • Scallop Faucet​
          • Contract Verification​(Under Development)
          • Contract Security Checks​
          • Scallop Whitelist
        • Scallop Chain: Built on Cosmos and Secured by Biometric Bridge
        • E-Money Tokens and Scallop
      • Scallop Business
    • Getting Started
      • Getting Started: Fiat Onboarding And Exchanges
      • Getting Started: The Defi Walkthrough
      • Getting started: Scallop Exchange
      • Staking
        • Scallop Staking Guide
          • Useful Resources
          • 1. Setting Up Metamask Wallet
          • 2. Importing existing wallet
          • 3. Installing Binance Smart Chain
          • 4. Setting up a Kucoin Account
          • 5. Buying SCLP with a market order on Kucoin
          • 6. Transferring from Kucoin to Metamask
          • 7. Connecting Metamask to the SCLP Staking platform
        • LP Staking Guide
  • Announcements
  • News
    • News: Terra Collapse
    • Terra: Beyond Hope
    • News: Chapter 11 for Celsius
    • News: Nomad Bridge Hack
  • Extras
    • Task Lists
    • Tokenising Real Estate
    • How to Donate Crypto to Ukraine
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On this page
  • A brief history of Ethereum
  • Ether
  • Ethereum 2.0
  • Summary
  1. Guides
  2. Know Your Crypto

Ethereum

Ethereum is the community-run technology powering the cryptocurrency ether (ETH) and thousands of decentralized applications.

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Last updated 1 year ago

Ethereum is a platform powered by technology that is best known for its native cryptocurrency, called ether, or ETH, or simply ethereum. It stands out from Bitcoin because it allows smart contracts and Dapps to be built on the network.

Ethereum is all about re-imagining how the internet works. Buying things, building apps, storing records: The project wants to change all of that..

Bitcoin proved that cryptocurrencies could be used as a store of value, but Ethereum builds on this innovation and proved that blockchain technology can deliver so much more. It can be used to organise people, ideas, companies, money, services, and many other things. If anything can be written into code and used by a smart contact it can be built on Ethereum.

Ethereum is the 2nd largest cryptocurrency as of writing, with only Bitcoin having a larger market capitalisation

A brief history of Ethereum

Conceived by Vitalik Buterin in 2013 and launched in 2015. This network is unique because it proposed to utilize blockchain technology not only for maintaining a decentralized payment network but also for storing computer code for decentralized financial contracts and applications.

  • 2013 - Vitalik Buterin produces a white paper explaining the concept of Ethereum

  • January 2014 - Ethereum is publicly announced

  • July 2014 - Ethereum launches an ICO using Bitcoin to buy Ether

  • June 2016 - $50 million of Ether was stolen from a crowdsale and Ethereum developers agree to reverse the decision by creating a ‘hard fork’

  • March 2017 - a group of companies including Toyota, Samsung, Microsoft, Intel, and J.P. Morgan establishes the Enterprise Ethereum Alliance, a non-profit designed to make Ethereum suitable for big business.

The reason Ethereum gained such massive popularity and almost flipped places with Bitcoin in June 2017 is due to its ability to run smart contracts.

Ether

The native currency for Ethereum is ether or $ETH. Ether is used mainly for two purposes: It is traded as a digital currency on exchanges in the same fashion as other cryptocurrencies, and it is used on the Ethereum network to run applications.

Ethereum 2.0

Ethereum is transitioning to ETH 2.0, a protocol that moves from Proof-of-Work to Proof-of-Stake, which reduces the environmental overhead of mining to zero.

Ethereum has faced many criticisms: slow network, power hungry mining, scalability. All these negatives are true. But Ethereum 2.0 tackles these issues directly.

“1,000x more scalable” and “cut energy costs by 99%”.

Viltalik Buterin on the future of ETH 2.0

Summary

Ethereum allows computer programs to run “smart contracts.”

With a smart contract, you don’t need a third party to perform credible transactions. And because these smart contracts live on blockchain technology, they are trackable and irreversible.

A new era of computer programming, digital ownership, and other innovations are being introduced thanks to the smart contract capabilities of Ethereum.

As an investment it also offers some diversification from Bitcoin whilst providing the relative security of a project that has weathered many of the storms of the cryptocurrency world and come out on top.

You can buy Ether or ETH as it is commonly referred too, from all the major cryptocurrency exchanges. For a guide on how to get started on an exchange, .

Just like Bitcoin, miners create Ether by creating blocks and solving puzzles. This is known as mining. Roughly every 15 seconds, a new block is added to the Ethereum , with the computer or miner that solves the puzzle being rewarded with Ether.

Ethereum currently uses the same mining technique as , however, it has plans to move to a different technique - it plans to move from 'proof-of-work' to 'proof-of-stake'. This change rewards those that the currency, as opposed to miners solving puzzles. This is significant because it means that the everyday investor can earn interest on their holdings by joining a staking pool.

We cover this topic in more detail

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