Buy Ethereum

Ethereum (ETH) is a blockchain designed to enable smart contracts and decentralized applications (dApps). It was launched in 2015 by Vitalik Buterin and a team of developers. Ethereum allows users to conduct peer-to-peer transactions without third-party intervention, increasing trust and efficiency in digital interactions.

Ethereum addresses the trust issue using blockchain technology: unlike traditional systems that depend on central authorities to validate transactions, Ethereum uses a network of computers to ensure the integrity and security of transactions.

There are multiple benefits for users of Ethereum thanks to a wide range of products and features. Examples include:

• Decentralized Finance (DeFi): Ethereum allows users to provide loans, earn interest, exchange tokens, and perform other financial transactions without relying on banks or other financial institutions.
• Initial Coin Offerings (ICOs): Many new projects use Ethereum to launch their tokens and raise funds through ICOs.
• Tokenization: Ethereum facilitates the creation and trading of digital assets, such as non-fungible tokens (NFTs) that represent unique properties.

Ethereum also has its own crypto token: Ether (ETH), which is used for network transactions, and also serves as a reward for network participants who contribute computing power and security.

Ethereum 2.0

Ethereum 2.0 was a major upgrade for the Ethereum network. Also known as The Merge, this upgrade took place on September 15, 2022 and transitioned the network from a Proof-of-Work (PoW) to a Proof-of-Stake (PoS) consensus mechanism. This change reduces the network’s energy consumption by over 99%, improving the sustainability and scalability of Ethereum.

Who founded Ethereum (ETH)?

Ethereum was founded by Vitalik Buterin, a young programmer and cryptocurrency researcher, along with Gavin Wood, Charles Hoskinson and other developers. The Ethereum project is currently managed by the Ethereum Foundation, a non-profit organization established to promote the development and adoption of Ethereum.

The founders of Ethereum have extensive experience in blockchain technology and have contributed to a range of other projects in the crypto industry. The Ethereum team consists of hundreds of developers from all over the world who work to improve and advance the platform.

Ethereum has several features, such as:

• Decentralized Finance (DeFi): Ethereum allows users to access DeFi applications such as for lending, staking, yield farming, etc.
• Tokenization: Developers can create their own tokens on the Ethereum network and these can be used for crowdfunding, loyalty programs, or as in-game assets.
• Decentralized Autonomous Organizations (DAOs): Ethereum supports organizations that are fully decentralized and autonomous.
• Decentralized Applications (dApps): Developers can build their own decentralized applications using smart contracts on Ethereum. These dApps provide transparency and trust without third-party intervention.
• Non-fungible tokens (NFTs): Ethereum is also known for its support of NFTs. These tokens represent unique digital assets such as artwork, collectibles, and virtual real estate.

Ethereum uses blockchain technology to verify transactions and smart contracts. The blockchain is a distributed ledger that keeps track of all transactions on the network. It is managed by different nodes in the network, which ensures decentralization and security.

Smart contracts

Ethereum supports smart contracts, which are self-executing pieces of code. These contracts automatically run when specific conditions are met, eliminating the need for intermediaries. Smart contracts can be programmed using Solidity, a programming language specifically designed for Ethereum.

EVM (Ethereum Virtual Machine)

The Ethereum Virtual Machine (EVM) is the runtime environment in which smart contracts are executed. It acts as a sandbox and is completely isolated from the underlying operating system. This allows developers to safely deploy their smart contracts without worrying about external security risks.

Consensus mechanism

The Ethereum network moved away from the Proof-of-Work (PoW) consensus mechanism in 2022 and switched to Proof-of-Stake (PoS). This allows ETH holders to pledge their tokens as collateral to participate in validating transactions and securing the network. Ethereum mining is therefore no longer possible.

Ether (ETH) is the cryptocurrency used on the Ethereum network. The ETH token has several functions within this network; ETH is primarily used to pay for transactions and smart contracts on Ethereum. Each transaction requires ETH tokens to be paid as a fee to the validators who process the transactions.

Developers can create their own tokens on the Ethereum network, which typically follow the ERC-20 token standard. These tokens can be traded and used throughout the Ethereum network.

With the transition to Ethereum 2.0, Ethereum can now be staked. Staking involves users stake their ETH tokens to secure the network and validate transactions. To stake Ethereum, a user must deposit 32 ETH as part of the Proof-of-Stake mechanism. Stakers are rewarded with ETH tokens for their contributions to the network.

What is unique about Ethereum?

Ethereum is distinguished by the following properties:

• Smart contracts: Ethereum was the first blockchain to enable smart contracts. These programmable contracts automate execution of transactions and other actions without third-party intervention.
• Decentralization: The Ethereum network is decentralized, with thousands of nodes around the world, meaning there is no central authority censoring or manipulating data.
• dApps: Ethereum provides a platform for building and deploying decentralized applications. These dApps use smart contracts and offer various functionalities, such as financial services, gaming, identity verification, and more.
• Ethereum Virtual Machine (EVM): The EVM is a virtual machine that runs on the Ethereum network. It allows you to write and execute smart contracts.

What is the difference between Ethereum and Bitcoin?

Both Ethereum and Bitcoin are cryptocurrencies and decentralized networks, but they are key differences between the two. Bitcoin focuses primarily on facilitating peer-to-peer digital transactions as an alternative to traditional money. Ethereum, on the other hand, has a broader focus and provides a platform for building decentralized applications and smart contracts.

Another difference is the consensus mechanism used. Bitcoin uses the Proof-of-Work mechanism, while Ethereum has moved to Proof-of-Stake. This means that Bitcoin miners must dedicate computing power to mine new blocks, whereas Ethereum stakers lock up ETH to secure the network and earn rewards.

Lastly, Ethereum offers more programmability than Bitcoin, with the ability to perform complex tasks via smart contracts. This allows dApps to be built on the Ethereum network.

You can purchase Ethereum using Bitvavo. Our Dutch exchange is accessible to both beginners and experienced traders. Follow these steps to purchase via our website and mobile app:

1. Log in to your Bitvavo account or create a new account.
2. Deposit some money into your account using the option: "Deposit".
3. Head to the Ethereum (ETH) buy page.
4. Enter the amount in euros or the number of Ethereum tokens you wish to buy and click "Buy".

After your purchase, your Ethereum coins will be automatically added straight to your Bitvavo wallet. Selling Ethereum is just as easy from your Bitvavo account.

Store Ethereum safely in your Bitvavo account, where the majority of customer funds are managed offline in secure cold wallets for maximum security. Activating two-factor authentication (2FA) is also recommended to ensure additional account safety.

For storage in an external wallet: Ethereum is compatible with most software and hardware wallets. At Bitvavo, you can purchase Ethereum and automatically transfer it to another wallet by adding the wallet address to your Bitvavo account.