Ethereum is a decentralized platform that runs smart contracts: applications that run exactly as programmed without any possibility of fraud or third party interference.
These apps run on a custom built blockchain, an enormously powerful shared global infrastructure that can move value around and represent the ownership of property. This enables developers to create markets, store registries of debts or promises, move funds in accordance with instructions given long in the past (like a will or a futures contract) and many other things that have not been invented yet, all without a middle man or counterparty risk.
The project was bootstrapped via an ether presale in August 2014 by fans all around the world. It is developed by the Ethereum Foundation, a Swiss non-profit, with contributions from great minds across the globe.
Ethereum is still in development and subject to significant technical improvements over time. While Ethereum is currently the most advanced and widely used smart contract platform, it is still very much in its early stages with many potential improvements and upgrades on the roadmap.
The native currency of the Ethereum network is called ether. Ether is used to pay for transaction fees and computational services on the Ethereum network.
When someone wants to buy something on the Ethereum network, they need to first buy ether. Ether can be bought and sold on cryptocurrency exchanges like Coinbase and Binance.
Once someone has ether, they can use it to send transactions on the Ethereum network.
Every transaction on the Ethereum network requires a small amount of ether to be sent along with it to cover the cost of running that transaction. This is called the gas fee.
The gas fee goes to the miners who validate transactions and add them to new blocks on the blockchain.
The amount of ether needed for a transaction depends on its complexity. For example, a simple transfer of ether from one wallet to another requires less gas than a smart contract that interacts with multiple contracts and stores data on the blockchain.
The sender of a transaction can specify how much gas they are willing to pay for their transaction. If the amount of gas specified is not enough to cover the cost of running the transaction, then the transaction will fail and all of the gas will be refunded to the sender.
The sender can also specify a higher gas price to make their transaction more likely to be included in the next block mined by miners. A higher gas price means that miners will earn more money for each transaction they include in a block, so they will be more likely to include transactions with higher gas prices in their blocks.
Once a transaction has been included in a block, it is considered confirmed and cannot be reversed or cancelled. This makes Ethereum very different from other cryptocurrencies like Bitcoin, which can be reversed through chargebacks on credit cards or other methods.
If you’re thinking about cashing out your Ethereum, there are a few things you should know first. Cryptocurrency exchanges like Coinbase allow you to convert your ETH into fiat currency like USD or EURO which can then be withdrawn from your account into your bank account. However, exchanges typically charge high fees for these types of transactions so it’s important to compare rates before converting your ETH into fiat currency.
Additionally, if you’re holding ETH as an investment it’s important to consider taxes as selling ETH may result in capital gains taxes depending on your country of residence. Overall, cashing out your Ethereum is possible but there are several things you should take into consideration first before making any decisions.