What is Ethereum? (Also: What is Ether?)

When people talk about Ethereum, they’re usually referring to Ether – the digital asset/token/cryptocurrency of the Ethereum blockchain. Unlike with Bitcoin, Ethereum and Ether are used interchangeably. Bitcoin was easy to understand because it was a currency – like the Dollar or Euro. Most people who talk about Bitcoin aren’t necessarily concerned about the underlying technology called Blockchain – even though they might have heard of the concept.

It’s slightly different with Ethereum where both the technology and the cryptocurrency are relevant and have different purposes. Ethereum – the name given to the blockchain platform – is the platform upon which other applications can be built.

If Ethereum was the internet, you could build other products – like email and applications like Facebook on top of it. As one of the Ethereum co-founders put it, “Email is one particular use of the internet… but there are many others”.

Ether, is the cryptocurrency of the Ethereum blockchain, which means that you can use it to transact with Ethereum applications, in addition to it functioning as a currency like Bitcoin. And similar to what’s happening with Bitcoin, Ethereum (read: Ether) is also being used as an investment option like property or shares.

“Bitcoin is first and foremost a currency; this is one particular application of a blockchain. However, it is far from the only application. To take a past example of a similar situation, e-mail is one particular use of the internet, and for sure helped popularise it, but there are many others.”

— Dr. Gavin Wood, Ethereum Co-Founder

How did Ethereum start?

2011

17 year old Vitalik Buterin learns about Bitcoin and starts up Bitcoin Magazine to cover topics related to blockchain, maths, computer science and economics.

2013

Buterin publishes a white-paper proposing Ethereum.

2008

After receiving a $10,000 fellowship grant, Buterin works on Ethereum full-time.

2015

Ethereum goes live.

How does Ethereum work?

Remember, the goal of Ethereum was not to be a cryptocurrency. It was to be a platform for others to build their applications on. It was envisioned to be something like the Internet where others could build their applications like email, social networking, online games, photo sharing and music streaming.

And that is exactly what Ethereum does, with (at the time of writing), nearly 2,000 different applications already live. Of course, this is a far cry from the number of applications and website on the Internet but worth mentioning that Ethereum is not even 5 years old.

Worth mentioning that, like all blockchain technology, Ethereum is also a decentralised network. What this means is that there is no single point of failure. For example, if you have your pictures stored on the cloud, the cloud is still a computer somewhere. And if that computer crashes or is hacked, all those photos are lost forever. With blockchain technology, the content, in this case photos are spread across a network of computers so even if one’s hacked, you can retrieve your photos.

Ethereum is used interchangeably to also refer to Ether – the cryptocurrency of the Ethereum network.

Ethereum logo as a mechanical system

What can I do with Ethereum? (Also: What can I do with Ether?)

Photos sharing is just one example of what the Ethereum network can be used for. So far apps include financial apps like insurance, gambling, file storage and gaming. Here are some of the more popular apps on Ethereum:

Storj

Allows you to rent out space on your hard disk in exchange for cryptocurrency.

OmiseGO

Execute financial transactions without having to rely on banks and fees.

Cryptokitties

Create and trade cats (they rule the internet, why shouldn’t they rule blockchain too?) on the network.

Ninja

Betting without the need of a central authority like a bookie.

Blocksure

Blockchain-powered insurance.

As mentioned, Ether is the underlying cryptocurrency of the Ethereum blockchain. And similar to other cryptocurrencies, like Bitcoin, you can use Ether to:

Buy things with Ether

The most obvious being using Ether to buy tokens to use the apps that are running on the Ethereum blockchain. And like other cryptocurrencies, you can also use Ether to buy goods and services from merchants who accept Ether alongside other currencies and cryptocurrencies.

Hold on to them as an investment

Similar to investing in the stock market or investing in property, you can also buy Ethereum (actually, Ether) and hold on to it for the long term, in the expectation that it would increase in value and be worth more than what you paid for it.

How to buy Ethereum in Australia?

You can buy Ethereum through any digital currency exchanges. All digital currency exchanges in Australia are regulated by AUSTRAC.

Chillur is an Australian digital currency exchange, registered and regulated by AUSTRAC that simplifies the process of buying Ethereum in Australia.

You can buy Ethereum in Australia using Chillur in two easy steps.

Step 1: Create an account

Create your Chillur account using an email address and password. You will then need to verify your identity using either your passport or drivers licence.

Step 2: Transfer funds to your account

Use your banking app or web banking to transfer funds to your Chillur account.

Once the funds settle (1-2 business days), the system will automatically buy Ethereum (and 9 other cryptocurrencies)

Congratulations! You now own Ethereum in your Chillur account

How to invest in Ethereum?

Investing in Ethereum is the process of buying Ethereum today with the expectation that it will go up in value in the future.

Investing in Ethereum through the Chillur platform has resulted in returns of 200% after 3 years.

You can invest in Ethereum using Chillur in three easy steps.

Step 1: Create an account

Investing in Ethereum is the process of buying Ethereum today with the expectation that it will go up in value in the future.

Investing in Ethereum through the Chillur platform has resulted in upwards of 200% returns after 3 years.

Step 2: Buy the Chillur 10 bundle

Chillur offers bundles of cryptocurrencies. What this means is that rather than picking and choosing which cryptocurrency to buy and at what price, you are able to buy 10 cryptocurrencies in a go. Chillur handles how much and the purchase price.

Step 3: Track your investment performance

Simply login into your Chillur account and track the performance of your portfolio either through a laptop or your mobile phone.

Where do I keep my Ethereum?

All cryptocurrencies are stored in wallets. Cryptocurrency wallets are either specially designed to hold just one kind of cryptocurrency or you can store multiple cryptocurrencies in the same wallet. These wallets can be stored on your computer, on your mobile phone and even on a pen drive that you can carry around with you. Cryptocurrency exchanges that we described above give each user their own wallet so you can also store your bought Ethereum directly with the exchange.

What does the future hold for Ethereum?

As the crystal ball would say – The answer’s unclear. Remember that Ethereum is primarily a platform for developers to build their apps on. And if MySpace has taught us anything it’s that it doesn’t matter how good or how bad an application is – the only thing that matters is how many people use it. And to that end, it depends on how quickly developers and their investors are able to take Ethereum applications to a wider audience.

Currently, the value of Ether is tied directly to how much someone is willing to pay for it. In 2017, it was worth nearly $1000 because there were enough people willing to pay that much. Six months after that, there weren’t enough people willing to pay that price and so it was worth considerably less. Like the crystal ball said – The answer’s unclear.

The best way to find out what the future holds for Ethereum is to come along on that journey. A lot of people expect big things from Ethereum and are eagerly waiting any news of what will happen next.

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