Cryptocurrency Basics: What is Ethereum and Staking?

Cryptocurrency is a digital or virtual form of currency that is secured by cryptography, making it incredibly difficult to counterfeit or manipulate. It is powered by blockchain technology, a distributed ledger enforced by a disparate network of computers. Cryptocurrency is not governed by any other body, which is why it is becoming increasingly popular.^[0] There is a wide range of conveniences associated with cryptocurrency, but learning the basics is important due to the volatile prices of cryptocurrencies.^[1]

Ethereum is a popular cryptocurrency, but it is more than just a digital currency – it is used to carry out smart contracts, which formalize the conditions of an agreement between a buyer and seller.^[0] It is a decentralized blockchain system, where code and the agreements it contains are spread out. Smart contracts allow for agreements and business transactions to be conducted without the need for the involvement of intermediary third parties, such as banks or governments.^[0]

Cryptocurrency has the potential to revolutionize compliance-free peer-to-peer and remittance trades, but users have to overcome certain challenges connected to security, privacy, and control to benefit from cryptocurrency fully.^[2] Businesses are also using cryptocurrency to save money on transaction fees while still providing a secure and reliable payment option for their customers.^[3] Blockchain technology can be employed to generate immutable ledgers which offer real-time tracking of all their transactions.

Bitcoin is the most popular cryptocurrency, but there are many more on the market such as Ethereum.^[4] Staking is the process of contributing to the security and operability of a blockchain network by pledging tokens to a ‘validator’ who processes transactions, and is important as a proof-of-stake (PoS) blockchain network is only as secure as the number of tokens pledged to these validators.^[5]

In order to purchase cryptocurrencies, users need to have a crypto wallet and access to a crypto buying site. Prices of cryptocurrency are extremely volatile, so caution is important when making any purchases.^[1] Cryptocurrency is here to stay and is quickly becoming mainstream alongside fiat currencies.

0. “Exploring Cryptocurrency Technology: 8 Facts to Learn About …” www.tekedia.com, 12 Feb. 2023, https://www.tekedia.com/exploring-cryptocurrency-technology-8-facts-to-learn-about/

1. “What is Cryptocurrency and what are its benefits? | Payments” www.telemediaonline.co.uk, 12 Feb. 2023, https://www.telemediaonline.co.uk/what-is-cryptocurrency-what-are-its-benefits/

2. “Cryptocurrency Market is likely to reach $12.10 billion by” www.globenewswire.com, 12 Feb. 2023, https://www.globenewswire.com/en/news-release/2023/02/07/2603472/0/en/Cryptocurrency-Market-is-likely-to-reach-12-10-billion-by-2030-Globally-at-a-CAGR-of-11-9.html

3. “The Future of Ecommerce: What Role Will Cryptocurrency Play?” www.corecommerce.com, 12 Feb. 2023, https://www.corecommerce.com/blog/cryptocurrency/

4. “How to invest in Cryptocurrency UK | Money Guru” www.moneyguru.com, 12 Feb. 2023, https://www.moneyguru.com/insights/how-to-invest-in-cryptocurrency-uk

5. “Coinbase Global Inc chief warns of potential cryptocurrency staking …” www.proactiveinvestors.co.uk, 12 Feb. 2023, https://www.proactiveinvestors.co.uk/companies/news/1005709/coinbase-global-inc-chief-warns-of-potential-cryptocurrency-staking-ban-1005709.html