Ethereum: The Functionality of Cryptocurrencies

Hi everyone! Welcome to this weeks post on Bit Education. Every Thursday I’ll be sending out a quick, education-packed newsletter containing:

• Either an article about either blockchain technology or cryptocurrency

• Articles or posts that I think would be useful to your learning

• A though provoking excerpt from a book I’m reading

These are informative posts, meaning there will be certain spots where you might not be familiar with the content. I suggest that you do external reading from the links that I will at the end of each post.

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How to best use this post.

1. Take notes while you read the post. I challenge you to discuss the ideas outside the newsletter with friends and family.

2. Read the extra links provided, and apply the information from those posts to come to your own conclusion.

3. Truly digest the book quote. Reflect on how it can apply to your life.

Ethereum: The Functionality of Cryptocurrencies

Ethereum is a decentralised blockchain that has smart contract functionality. Ether or ETH is the native cryptocurrency which is second in market capitalisation, to Bitcoin (the first).

Ethereum was conceived in 2013 by Canadian-Russian programmer and cryptocurrency pioneer Vitalik Buterin. To allow users to deploy smart contracts and decentralized finance apps.

Decentralized Finance Apps (DeFi), provide financial instruments that can operate without any intermediaries, such as loans, exchanges, and even insurance.

Ethereum’ smart contracts also allow users to create, buy and sell NFTS. Non-Fungible-Tokens (NFTs) are tokens that are tied to unique digital assets, such as art, videos, and music.

The ERC-20 token that leads Ethereum development is used by many other cryptocurrencies. And has facilitated a platform for the initial coin offerings of other cryptocurrency projects.

Ethereum is powered by a Proof-of-Stake (PoS) mechanism. PoS selects validators to verify transactions on the network in proportion to their amount of holdings. Unlike Bitcoin which selects based on the computational power they provide.

Unlike Bitcoin that enables transactions, Ethereum enables functionality to be created in a decentralised manner.

Ben - AKA Waldo

Further Reading

Book Excerpt

“No you do not have thousands of years to live. Urgency is on you. While you live, while you can, become good” - Marcus Aurelius, Meditations

Coming Soon

• Proof-of-Stake, Ethereum’s Consensus Mechanism

• Smart Contracts 101

• Introduction to dapps (Decentralised Applications)

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