Ethereum 101: A Brief Introduction to Ethereum

If you haven’t seen already, we now support investing in Ethereum through the Abra app! You may be wondering, “what the heck is an Ethereum?” This post gives an overview of Ethereum, why it’s important, and how to invest in Ethereum through Abra.

What is Ethereum?

As stated on the Ethereum website, “Ethereum is a decentralized platform that runs smart contracts: applications that run exactly as programmed without any possibility of downtime, censorship, fraud or third party interference.”

Ethereum is a blockchain system where thousands of computers around the globe are networked together to create a distributed, decentralized computer. This world computer runs an operating system called the Ethereum Virtual Machine (EVM). The EVM understands and executes the software written in Solidity, or other Ethereum-specific programming languages. The applications executed by the EVM are called smart contracts. A smart contract is just a program that controls the transfer of ETH between accounts if certain conditions are met. For example, a smart contract for landlords could live on Ethereum where the locks in the rented apartment only continue to open if the renter pays their monthly bill.

It is not free to access and run computations on the Ethereum Blockchain. Like in Bitcoin, a native cryptocurrency is necessary for the blockchain to function. Bitcoin (BTC) is used to transfer value within a digitally distributed ledger known as the Bitcoin Blockchain. Ether (ETH) is the native token that enables users to pay to execute smart contracts on the Ethereum Blockchain.

Why is Ethereum important?

A growing number of entrepreneurs and developers view Ethereum as a valuable tool and have started to use it to build decentralized businesses that couldn’t have existed before. Ethereum smart contracts can be used to eliminate third parties from many industries, which would lower costs and creates more secure products. Ethereum use cases are many, including decentralized identity registration, supply chain management, and democratized crowdfunding.

Due to the demand of ether, the value has increased rapidly over the past year (see chart below). The Ethereum network now processes more transactions per day than Bitcoin. The number of applications and businesses have also been increasing at an exponential rate. Ethereum is only 3 years old, but it is showing tremendous potential to create trustless, decentralized applications that will be used by millions of people across the world.

How to invest in Ethereum through Abra

Abra provides the ability to gain exposure to Ethereum’s price action, without having to deal with the complexities of setting up a separate ETH wallet and signing up with another exchange. Here’s how to invest in ether through Abra:

  1. Make sure Bitcoin and Ethereum are set as your wallet’s currencies.
  2. Tap ‘Add Money’ in your USD wallet or ‘Buy Bitcoin’ in your BTC wallet
  3. Tap ‘Exchange’ in your ETH wallet
  4. Select your funding source and confirm the amount you want to exchange

If you want to learn more about how ETH is supported through Abra, check out our FAQs.

 

Disclaimer: The content above is for information purposes only. It is not intended to be investment advice. Seek a licensed professional for investment advice.

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