Ethereum and Altcoins are examples of crypto assets developed using Blockchain technology.
Ethereum is the most popular crypto asset after Bitcoin, while Altcoins are all crypto assets that are not Bitcoin.
Ethereum and Its History
Ethereum is a software platform that enables smart contracts and decentralized applications (DApps).
In 2013 Ethereum was developed by Vitalik Buterin and officially launched in 2015.
Ethereum allows developers to build and deploy applications on their Blockchain.
Currently, DApp development is already in the Blockchain space. However, this platform still needs to be operational.
Vitalik Buterin initially brought the two together because, according to him, unifying how DApps run and interact is the only way to sustain Ethereum adoption, from which Ethereum 1.0 came.
Ethereum 2.0 is a significant upgrade to the Ethereum Blockchain, which is being developed in several phases.
Some of these upgrades include various Features, such as:
1. The transition from a proof-of-work (PoW) consensus algorithm to a proof-of-stake (PoS) consensus algorithm is expected to be more energy efficient and secure.
2. Introduction of sharding will enable the Ethereum Blockchain to process transactions more efficiently and scale to handle more users.
3. Using a new virtual machine, or the so-called Ethereum Virtual Machine (EVM) 2.0, will improve the performance and security of smart contracts.
How Ethereum Works
Ethereum uses the same technology as Bitcoin, but Ethereum has additional features, namely smart contracts, that allow users to create decentralized applications on top of the Ethereum network.
A smart contract is a digital contract that allows it to be executed automatically after the conditions specified in the contract are met.
One example is smart contacts can be used to make buying and selling transactions without using a third party as an intermediary.
Ethereum has a feature called Ether (ETH), a digital asset used in the Ethereum network.
Ether (ETH) is used as “gas” to run smart contracts and decentralized applications on the Ethereum network.
Gas is a fee that must be paid to execute transactions and smart contracts on the Ethereum network.
Gas is calculated in “gwei” units and pegged at a price determined by the market, which can change according to network conditions.
Altcoins: Definition and Types
Alternative coins, or what is known as “altcoins,” refer to all crypto assets that are not Bitcoin.
Altcoins are developed by taking the basic idea of Bitcoin and adding features with new technology.
Altcoins were developed to increase transaction efficiency, network scalability, and privacy.
One of the most popular altcoins is Ethereum which was developed to create decentralized applications on the Ethereum network. Some of the other popular types of Altcoins are:
Litecoin has a purpose and was developed to increase transaction speed and network scalability compared to Bitcoin.
Litecoin uses a simpler Scrypt algorithm than the SHA-256 algorithm that Bitcoin uses.
2. Ripple (XRP)
Ripple has the crypto asset XRP within its network to make transactions that make payments possible.
Ripple uses the Ripple Protocol Consensus Algorithm (RPCA) technology, which allows transactions to be confirmed in less than 4 seconds.
3. Monero (XMR)
Monero has a purpose and was developed to increase transaction privacy.
Monero uses ring signature and stealth address technology to make transactions obscured (untraceable).
Invest in Ethereum and Altcoin
When you want to invest in Ethereum and Altcoins, you can do it in different ways, such as:
1. Buy and Save
Buying and holding is the most common thing investors do. You can buy Ethereum and Altcoins through crypto exchanges like INDODAX.
You can also invest in Ethereum and Altcoins by mining.
In mining, you provide computing power for confirming transactions and mining new blocks in the Ethereum or Altcoin network.
Then, you will be rewarded with Ethereum or Altcoin for your services.
However, this mining process requires quite expensive equipment and high electricity costs.
3. Become a Liquidity Provider on a DeFi Exchange
Another way when you want to invest in Ethereum and Altcoin is to become a liquidity provider on a Decentralized Finance (DeFi) exchange.
You will provide funds to be used in transactions on DeFi exchanges and receive rewards like Ethereum or Altcoins.
4. Buy Crypto-based Mutual Funds or ETFs
You can also invest in Ethereum and Altcoins by buying crypto-based mutual funds or ETFs.
Tips and Tricks for Investing in Ethereum and Altcoin
1. Create an Investment Plan
Making a mature and structured investment plan can help you manage risk and achieve investment goals.
The investment plan includes investment objectives, investment period, and investment strategy.
2. Following Market Developments
You must follow the news and analyze the market to understand what factors influence Ethereum and Altcoin prices.
Following developments in the crypto market by following the news and conducting market analysis will make it easier to identify trends and help make the right investment decisions.
3. Portfolio Diversification
Portfolio diversification is an excellent way to reduce risk, and this is done by dividing your investment into several types of Altcoins or other assets.
4. Buy Low and Sell High
This is a general tip when investing, and you can look for opportunities to buy Ethereum or Altcoins when prices are low and sell them when prices are high.
5. Don’t Get Emotional
Make sure you make decisions based on the analysis and research that you have done, and don’t be too influenced by emotions when investing.
1. Ethereum is the most popular crypto asset besides Bitcoin, while Altcoin is another crypto asset besides Bitcoin.
2. Many altcoins are developed by taking the basic idea of Bitcoin but have other developments, such as adding new features and technology.
3. Some tips before investing in Ethereum and Altcoins are: Make an investment plan, follow market developments, diversify your portfolio, buy when prices are low and sell when prices are high, and don’t be too emotional when investing.
In the following material, you will study and discuss basic learning materials regarding “Crypto Wallet.”