Ethereum is the project that first enamoured the cryptoverse to the term smart contracts. It brought forth a revolution, and opened everyone’s eyes to the fact that cryptocurrency is not just “currency” and, in fact, distributed trustless ledgers have the potential to empower so much more. Whether that’s governing financial derivatives, yield farming, property markets, credit enforcement or crowdfunding agreements, smart contracts have the ability to replace and regulate so many of the institutions that govern our daily lives. Ethereum, then, is a vast, decentralized supercomputer for processing these transactions and agreements in a secure and safe way.
How Does ETH Work?
Ethereum currently works by using a Proof-of-Work mechanism, but will soon switch the Proof-of-Stake. Similar to Bitcoin, Ethereum miners validate transactions and smart contracts through processing power that is put towards confirming the activities that are taking place on the blockchain. They then take a transaction fee reward – in ETH – for doing so. This decentralized way of approving transactions ensures their security and reliability, but not necessarily their speed.
This is about to change with Ethereum’s transition from Proof of Work to a Proof of Stake consensus mechanism (known as the Ethereum Consensus layer), where blocks of cryptocurrency transactions are validated, or confirmed, by users (validators) who hold 32 ETH. The launch is expected by the end of 2022 or soon after. This move to Proof-of-Stake has been designed to improve the scalability of Ethereum, while retaining all the security of a decentralized blockchain. Once this goes live, allowing a process known as sharding to kick in, we should start to see lower Gas fees and faster transaction times across the network.
What Are the Problems With ETH?
Its success as a project drives scalability concerns. There’s a whole economy based on the Ethereum chain, and as a coin, it’s currently the second largest crypto by market cap by a considerable distance, superseded only by Bitcoin.
As Ethereum grows, the sad fact is it’s somewhat antiquated crypto-architecture can’t handle the throughput of transactions and data running through it. Sidechains, like Polygon, Loopring and others, help the efficiency of the main Ethereum blockchain by processing transactions off-chain and then sending them to Ethereum for validation.
A common way of doing this is using zkRollups By giving breadcrumbs to the Ethereum main chain, sidechains can validate transactions at 100x the speed they could do otherwise, and at a significantly lower cost. Rather than validating every transaction, sets of transactions are batched together then sent to Ethereum for validation. This is important, as each transaction on Ethereum costs gas fees, which can become punitive at moments of high congestion, and can make multiple transactions too expensive when executing complex smart contracts or multiple transfers of ERC-20 tokens.
Is ETH Hard to Get?
If you are new to the world of digital assets then getting cryptocurrencies can be a confusing prospect. Everyone has heard of the top dog Bitcoin and Ethereum is becoming a household name with each passing day, but how can you actually get ETH?
You can’t go wrong with using Numio for your ETH. The Numio mobile app is a frictionless way to send and receive your stored ETH instantly and, if you are a bit more crypto savvy, then you can also trade and swap ETH on Numio.
Download Numio to get Ethereum
How can I get ETH?
There are multiple ways to get ETH on Numio. You can purchase ETH with your credit or debit card, you can trade it for other ERC-20 assets (up to 100x cheaper than other wallets), or you can receive it as a payment. Whatever way you choose you can be sure that you are always in full control of your ETH.