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Ethereum cryptocurrency

How Many Ethereum Are There?

Cryptocurrency Individual Retirement Accounts (IRAs) are becoming increasingly popular thanks to the rapidly rising adoption rate of top cryptocurrencies like Bitcoin (BTC) and Ethereum (ETH). As the world’s first cryptocurrency, BTC has so far been the primary choice for crypto IRAs, but this is gradually starting to change. While BTC is strictly used as digital cash, Ethereum offers more versatility from a development perspective because it is a multipurpose cryptocurrency. The Ethereum blockchain is one of the largest crypto ecosystems on the market, with thousands of decentralized apps, DeFi platforms, and crypto tokens based on the ETH network. Crypto enthusiasts exploring crypto IRAs should definitely pay attention to Ethereum as a viable option to include in their IRA. Let’s take a detailed look at Ethereum to help you understand all the key characteristics of one of the most valuable cryptocurrencies on the market.

A Brief History of Ethereum

The Ethereum blockchain was launched back in 2015 by a team of crypto veterans and blockchain developers led by programmer Vitalik Buterin. The idea behind Ethereum was to create an open-source, nonprofit blockchain that provides users with much more than just digital cash services like Bitcoin and Litecoin (LTC). Instead, the Ethereum blockchain aims to provide developers with programming tools and resources for launching different kinds of tokens and platforms, such as DeFi apps, exchange platforms, staking protocols, crypto games, NFTs, and virtual marketplaces. The ecosystem was powered by the Ether token, which is used to facilitate all transactions on the ETH blockchain. The project was an immediate hit, as there weren’t any similar crypto projects on the market at the time of its launch. Other altcoins were mostly copying Bitcoin by providing virtual cash functionalities. Ethereum went much further by giving real problem-solving features to cryptocurrency and providing developers with free tech tools for developing platforms.

How Does the Ethereum Blockchain Work?

The ETH blockchain is a Proof of Work (PoW) blockchain, similar to Bitcoin in its basics. This means that the blockchain is fully decentralized, without any single authority or central server responsible for validating network traffic. Instead, all transactions are checked and validated by independent network nodes, i.e. Ethereum miners and their computers. Every transaction needs to undergo a rigorous validation process that requires miners to use their rigs’ hashing power to find the right hash for each transaction. When miners find the right hash, they present it to the whole network as proof of work and wait for additional confirmations before they add it to the next block of the ETH blockchain. This process consumes a lot of time and computing power, which is why miners earn a block reward of freshly mined ETH coins.

Ethereum’s Main Features

Smart Contracts

One of the revolutionary features of the ETH blockchain is the smart contract, self-executing, automated pieces of computing code that are created in order to perform certain tasks without the need for human supervision or participation. For example, a company can use smart contracts to automate the salary payout procedure for their employees, or a crypto exchange can use these contracts to enable trustless transactions between complete strangers. A smart contract operates on the basis of safe locks that make sure both parties need to fulfill their end of the deal before they can get the agreed-upon results. This way, when two strangers agree on an exchange of assets, both sides need to deposit the agreed amount of funds before they can get their share of the deal.

Decentralized Applications

Decentralized applications are the main utility of the Ethereum blockchain; however, without smart contracts, developers wouldn’t be able to create and launch dApps. These applications don’t use developer resources from centralized big tech companies that control all apps and platforms launched with their programming tools. Instead, Ethereum-based dApps are built with the help of the Ethereum programming language called Solidity and the Ethereum Virtual Machine (EVM). DApps can be launched for all types of businesses and entertainment purposes, from decentralized exchange platforms like Uniswap (UNI) and DeFi protocols like Curve to NFT marketplaces like OpenSea and crypto games such as Axie Infinity (AXS).

Ethereum Tokens

Developer teams that want to quickly launch their own cryptocurrency as part of their dApp or DeFi ecosystem don’t need to create a whole blockchain from scratch. They can always use the Ethereum chain to launch a crypto token, thanks to the ERC-20 token standard. This token standard includes a set of rules and parameters for launching cryptocurrencies based on the ETH network, and it’s totally free. Anyone with some programming knowledge and a solid project can launch their crypto as an ERC-20 token. This was one of the most innovative features of the ETH blockchain when it was launched because before Ethereum developers had to either create a whole blockchain from scratch or fork an existing chain like the BTC network. Another very important Ethereum token standard is the ERC-721 standard, which is the token standard for non-fungible tokens (NFTs) built on the Ethereum chain. The ERC-721 standard paved the way for key NFT marketplaces like OpenSea and played a key role in the popularization of NFTs, which are exponentially growing in terms of popularity and adoption rate.

So, How Many Ethereum Are There?

Now that we’ve laid out the key characteristics of the Ethereum blockchain, let’s take a look at the numbers behind the Ethereum ecosystem.

Ethereum Supply

Ethereum is PoW-based crypto that’s going through a transition process to a Proof of Stake model where mining won’t be possible anymore. Until then, the Ethereum supply is constantly on the rise thanks to miners. The easiest way to monitor the current supply of ETH coins, along with the Ether price and market capitalization, is through the Ethereum page on Coinmarketcap. The circulating supply of Ethereum is well over 100 million coins, and the number is constantly increasing. There isn’t any ETH hard cap that regulates the maximum amount of coins, unlike Bitcoin, which is capped at 21 million coins.

Ethereum’s Performance in 2021

Ethereum’s GAS fees are known to be some of the highest on the crypto market, and this didn’t change for the better in 2021. In fact, Ethereum fees have only gone up thanks to the high influx of new ETH chain users. The fees are especially high during periods of high traffic when users compete with each other in so-called gas wars by setting exponentially higher transaction fees to get their transfer processed as fast as possible. The trend of sky-high gas fees is especially visible on the NFT market, which is dominated by Ethereum and received a huge increase in market cap during 2021. Around 41 billion USD worth of ETH was transferred in NFT related transactions. In terms of price action, 2021 was the best year so far for Ethereum since the coin managed to reach a new all-time high of 4,891 US dollars per coin. Although new dApp and smart contract centered blockchains like Solana (SOL) and Avalanche (AVAX) are becoming increasingly popular, Ethereum is still firmly dominating the market when it comes to smart blockchain networks with high interoperability features. Ethereum managed to constantly hold over 15% of the total crypto market cap throughout 2021, while the Ethereum mining figures remained within the optimal 18 million Ether annual amount.

A Few Ending Words…

The information about Ethereum presented in this post aims to provide you with relevant knowledge about the second-largest crypto on the market in order to enable you to make your own decisions on whether you want to include ETH in your IRA or not. If this article peaks your interest in exploring Ethereum IRA options, feel free to contact one of our Coin IRA crypto specialists at 888-998-COIN.
Money bag as a NFT: Non-fungible token

NFTs: What Are They and What’s the Fuss?

What's all the fuss about these non-fungible tokens (NFTs)? The Mona Lisa, for example, is an NFT, obviously somewhat pre-Bitcoin, but known worldwide as a unique and valuable work of art.

NFTs are the latest mash-up of “art” with the underlying technology of cryptocurrencies — the blockchain. It’s a kind of art and commerce collision that has produced an explosion of money for a few lucky creators.

This is defining “art” in its broadest sense—so a cartoon, an image of a kitten, a tweet by the founder of Twitter, etc.—these sorts of things have been put up for sale as NFTs.

Recent NFT Sales Create Riches

Here are some recent NFTs:

  • Artist Beeple sold 5000 digital artworks for $69 million through Christie's auction house;
  • The first tweet announcing Twitter; and
  • A collectible baseball card.

These artworks are owned on the blockchain by the people who purchased them — it is a simple transfer of ownership using the protocols set up by Ether. These sales have been very lucrative for some people — raking in millions of dollars.

The beginning of the phenomenon was the problem of digital copying — images, music, and movies — have long had the issue that they can be copied digitally and distributed without any way of getting the originators some money back. Now that you can put digital art onto the blockchain using the applications built into Ether and some other tokens, you can create a kind of digital artist's signature, ensuring it is unique. It's a bit like buying 'Print 5 of 100 (signed) Andy Warhol'. In the art world, you would need the “provenance” — an expert or gallery would certify that this print was a genuine Warhol. By using the blockchain, NFTs have provenance too.

What the Heck Does 'Fungible' Mean?

'Fungible' simply means tradable, identical. One dollar bill is the same as any other. This is really important for currencies — a shopkeeper will accept any dollar bill, they are all the same — even if one is older than another, or even has been used for criminal purposes: it doesn't matter. Bitcoin is fungible too — any BTC is identical to any other one.

However, every address on the blockchain is unique, and using Ether or other tokens other metadata can be added. That's the cryptographic way of adding “provenance”. So non-fungible items are unique — they can even breed! Cryptokitties are each a unique cat on the Ether blockchain and two digital kitties can produce offspring which each have their own characteristics, like real cats. Strange, isn't it?

NFTs and Online Gaming

Another use is in the world of computer gaming. You may know that people purchase in-game items, say a magic sword, with real dollars. Of course, a cheat might sell the same sword many times and there wouldn't be much you could do about it if the game's moderators didn't take action. Using NFTs would solve this problem, and mean that those in-game items could be sold for in-game digital gold pieces, or real-world dollars. Various gaming companies like Decentraland are already using crypto tokens for large multi-player online games.

Tickets for sports or music events would seem another area where NFTs could have an impact, and also reduce the problems of lost tickets, counterfeiting, and ticket scalping. Collectible tickets could be traded just like any other piece of merchandise.

Are There Any Serious Uses of NFTs?

Yes, there are. Non-fungible tokens are another step forward in the development of the cryptocurrency ecosystem. They introduce sophisticated trading and loan systems for various asset types, ranging from physical things like real estate and land to contracts and artwork. By enabling digital representations of physical assets, NFTs are a new form of asset management, in theory streamlining the financial operation of particular assets.

For example, a tract of land owned by a corporation contains a condominium, a shopping mall with offices, and an industrial site with small factories and workshops. These three assets have different values, rents, occupants, maintenance requirements, and many other elements to consider as part of their overall worth.

Let's say the company wants to sell the shopping mall, but keep the other two properties—all the necessary documentation and information could be loaded on the blockchain as an NFT (as the blockchain is just a decentralized ledger) and then marketed, sold and contracts exchanged using dAPPs (decentralized applications) and smart contracts in a much more streamlined and quicker way than the complex, time-consuming existing methods of using realtors, lawyers and other middlemen.

NFTs have been likened to “digital passports” in the sense that they are a representation of all the important components of a physical item, digitized and stored in a tamper-free format on the blockchain — where they can be used for a transaction.

How to Trade NFTs

One particular difference between NFTs and more conventional cryptocurrencies is that you don't trade NFTs on an exchange. A particular piece of art is desired by a buyer and sold to him or her. There are marketplaces for these sorts of NFT price deals, like OpenSea or Nifty Gateway, which has been acquired by major US crypto exchange Gemini.

Once you have acquired an artwork, you can see if its token price goes up. Then you could sell it on the marketplace, just like you would a real painting — although without the hassle of packing it up, insuring it, and mailing it to the recipient. On an NFT marketplace, this happens digitally with a few clicks and the ownership is transferred.

Despite the Hype, NFTs Will Find a Place in the Fintech Ecosystem

Is this a craze or not? Like many things to do with cryptocurrencies, there is a lot of hype, but also a significant step forward for the utilization of cryptocurrencies in advanced financial applications. Although the uses have been mostly frivolous up to now, that should not obscure the reality that a reliable “digital passport” will have a lot of uses in a wide variety of sectors, reducing costs and cutting out expensive middlemen.

Will NFTs become eligible investments for qualified retirement accounts? We don't know just yet, but this could be a future possibility.  In the meantime, if you are excited to become part of the cryptocurrency investment boom, please contact CoinIRA and speak to a cryptocurrency expert to learn how you can acquire cryptocurrencies as part of your retirement planning or personal investment holdings.

How Does Cryptocurrency Work?

For years now, banks and governments have been holding the reins of our monetary system. We rely on them to issue the fiat currency we use and determine its value. Banks collect our personal information, approve or reject our requests, oversee and keep track of money transactions, enable cross-border payments, etc. These services cost extra but apart from cash, people lose time, privacy, and control over their own money. Enters Bitcoin, the world’s first cryptocurrency. Suddenly, all of the above can be executed in a decentralized manner by a complex algorithm. A new form of cash whose value can jump up exponentially. It’s expected of you to have questions. In fact, we all have questions. Today, our team will help you grasp the main concepts behind these assets, how they work, what are the most popular cryptos, and how to use them.

What’s Cryptocurrency?

The “crypto” in cryptocurrency stands for cryptography, the process of converting ordinary data into unintelligible code for secure communication. In our modern digital era, cryptography is based on a combination of mathematical theory and computer science. In 2009, a developer under the pseudonym of Satoshi Nakamoto made a breakthrough in cryptographic technology, designing an impenetrable digital ledger now-called the blockchain Blockchain is the underlying technology behind almost all digital assets and the reason why they can exist outside of the centralized monetary system and its institutional trust-based model. Cryptocurrencies are part of peer-to-peer (P2P) networks where money transactions are faster, cheaper, and more private. Cryptocurrencies enjoy the status of currency because although virtual they’re still fungible, divisible, and countable, and they’re becoming increasingly valued as mediums of exchange and stores of value.

Blockchain Technology and Verifying Transactions

To understand how cryptocurrency works, we have to start with blockchain technology. The main purpose of this digital ledger is to ensure a cost-effective exchange of information and securely store that information after (in this case that information would be money transactions). This is only possible if the whole P2P network works together to verify and add the transactions to the ledger which is basically what ”mining” cryptocurrency is all about. For the purpose of illustrating the mining process, we’ll focus on Bitcoin’s blockchain. Bitcoin’s P2P network consists of volunteers/miners operating on their computers or mining hardware known as nodes. To mine new bitcoins, the nodes run the incoming transactions through a hash function - in Bitcoin’s case, that’s the SHA-256 function - multiple times until they arrive at a solution, i.e. the right hash value. This is a complex algorithmic process that takes time and consumes a lot of computational power.  When one of the miners solves the problem, he/she broadcasts it to the whole network and waits for its approval from the majority of the network. Only then, the transaction is verified and can be added to the next chained block of data (hence: blockchain).  To eliminate the risk of double-spending and prevent outsiders from making changes to the blockchain or erasing data, every new block contains the hash value of the previous block. Therefore, if someone wants to meddle with the stored data, they would have to go all the way back and change every block. This is considered practically impossible because they would have to generate enormous computational power to outperform over 50% of the P2P network.  This process of mining new coins and verifying transactions is known as the Proof of Work consensus mechanism. Since Bitcoin’s emergence, the technology has continued to work on more sustainable solutions which is why PoW is no longer the only mechanism although it remains the most common one among cryptocurrencies.

What Are the Most Popular Cryptocurrencies?

Bitcoin

Bitcoin (BTC) is the first and most popular cryptocurrency in the world. It was launched in 2009, by Satoshi Nakamoto, who explained the mechanisms and technology behind the first fully-fledged electronic payment system built on cryptographic proof in his 2008 whitepaper Bitcoin: A Peer-to-Peer Electronic Cash System>. At the moment 1 BTC is worth over $10,000 with a total market capitalization of more than $195 billion! It’s a great long-term investment that has continually brought high returns to investors. Moreover, an increasing number of merchants, online platforms, and leading companies are starting to accept Bitcoin payments for their goods and services.

Ethereum

Ether or better known as Ethereum (ETH) is the second-largest cryptocurrency by market capitalization with over $38 billion towards the end of 2020. Ethereum was launched in 2015 by Russian-Canadian developer Vitalik Buterin. Buterin envisioned a cryptocurrency that would be more than just a store of value. He predicted the smart economy of the future where businesses make self-executable contracts and developers build decentralized applications. This is exactly what the Ethereum blockchain is all about. Since 2017, third-parties can launch their digital tokens known as ERC-20 tokens on Ethereum’s blockchain.

Litecoin

Litecoin (LTC), or the silver to Bitcoin’s gold, was created by a Bitcoin aficionado when the crypto market was still in its infancy. After studying Bitcoin’s blockchain and mechanism, Charlie Lee, a former Google employee, launched his own crypto project in 2011. Litecoin was supposed to be used side by side with Bitcoin but instead of long-term investments and large purchases, Litecoin would be more suitable for small everyday purchases. In order to achieve that, Charlie focused on making Litecoin’s blockchain more scalable.

Ripple

Ripple (XRP) is a joint crypto project between OpenCoin developer Ryan Fugger, software engineer Jed McCaleb, and angel investor Chris Larsen. Initial misunderstandings led to McCaleb’s departure as he went on to work on other projects (Stellar Lumens). Nevertheless, Ripple’s ecosystem continued to grow and the coin is now fourth by market cap. The main use case of Ripple is making international payments that are faster and cheaper and that would benefit both retail investors and central banks.

What Are the Use Cases of Cryptocurrency?

Few years ago, it seemed less likely that cryptocurrency was the future of our finances but things have changed since. There’s a raised level of awareness and crypto usage among the mainstream population mostly because there are more and more online crypto platforms, media coverage, shops and restaurants that accept crypto as payment, etc. There are even crypto debit cards. If this popularity continues, assets with a fixed supply such as Bitcoin will become scarce and their price would go up significantly to the benefit of Bitcoin investors. Moreover, a lot of investors simply choose crypto to diversify their portfolio. Finally, there are those who see crypto as more secure so they exchange their fiat currencies for crypto ones and store them in a digital wallet or open a retirement savings account with us, Coin IRA.

Final Thoughts

We hope you found our guide on how cryptocurrencies work as detailed and informative as we intended for it to be. If you’re curious to learn more about cryptocurrency IRAs and how to invest your crypto in retirement savings, don’t hesitate to contact Coin IRA today. As one of the pioneers in the cryptocurrency IRA industry, our representatives have plenty of experience helping investors just like you make cryptocurrencies an important part of their investment portfolios. Don’t wait for cryptocurrencies to double in price again before you make your move. Try your hand at cryptocurrency and contact our Coin IRA team today.
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