The rise of cryptocurrencies is just one effect of the fast-paced technological advancements we now have in this era.
Cryptocurrency is a form of digital currency that is created through encryption. Unlike the traditional monetary systems, it works with a decentralized system.
Some of the most successful and known cryptocurrencies are Bitcoin and Ethereum. As Singaporean who lives in one of the growing financial centres of the world, you might be already familiar with it.
However, maybe not quite yet since you are finding yourself here. But we are about to change that.
For this article, we will dedicate it to Ethereum and shed some light on the things you must know about it.
If you are planning on a venture with Ethereum Singapore, then it helps to get yourself be familiar with these:
What Is Ethereum
Ethereum is a decentralized blockchain-based software platform. Its official website define it as:
“Ethereum is a decentralized platform for applications that run exactly as programmed without any chance of fraud, censorship, or third-party interference.”
The code written on the Ethereum blockchain can’t be altered, tempered, or hacked. This is ensured by cryptography.
Another important thing that must be noted with Ethereum is that it is a decentralized programmable blockchain-based software platform. Its cryptocurrecy asset is called Ether (ETH).
What this means is that Ethereum allows you to build and execute ‘smart contracts’ and ‘Distributed Autonomous Applications (DApps)’ through the inbuilt programming system language called Solidity.
All of these without censorship, downtime, or any third party. The cryptocurrency asset (Ether) then helps execute theses apps and contracts.
Thus, Ethereum is also called programmable money. This is exactly what sets Ethereum apart from Bitcoin.
What Bitcoin does is strictly being a digital currency that is designed to function as a means of payment.
Ethereum, on the other hand, works more than that, which is to act as a platform to create and run apps and smart contracts.
#1 What Is A Smart Contract
We keep on dropping the term ‘smart contract’ when defining Ethereum. But what is it all about?
A smart contract is basically a contract written in code that is uploaded by the creators to the blockchain. When a contract is executed, a node on the network runs it, uploaded to the blockchain, then stored in the public ledger.
Smart contracts work only when certain conditions are met. Once it does that, the program carries out the terms of the contract. The whole process and use of the contract is displayed on the blockchain for everyone to see.
If you tamper with the contract, every copy of the digital ledger would note this. In simpler terms, there is no way to get away with it.
The known advantage of smart contracts is that it is carried out without the need for “middlemen” like lawyers or notaries. No need to file papers and long transactions on your end. Also, there will be no fees involved.
However, when a bug appears that may affect the code of the smart contract, the blockchain will still carry out the terms of the contracts. This can be problematic.
#2 History of Ethereum
Now let us take it back to where it all started.
Ethereum was created in late 2013 by a Russian programmer named Vitalik Buterin. He formally announced it in January 2014 at the North American Bitcoin Conference in Miami, USA.
As a student who previously founded Bitcoin Magazine in 2012, he invested in creating another form of cryptocurrency that can do what Bitcoin could not.
Ethereum is introduced as not simply another cryptocurrency. Instead, it is an effort to code, run, and execute smart contracts and DApps independently without human interaction.
By July 2014, Dr. Gavin Wood joined as the co-founder with the Ethereum Foundation that bootstrapped the development of Ethereum software. It raised $18 million during the presale of Ether tokens.
#3 How (Ether)eum is Produced
Most people tend to mistake Ethereum as the cryptocurrency to be produced. But contrary to that, it is actually the Ether that will get produced or mined.
To properly distinguish both terms, Ethereum is the network that is based on the blockchain technology; while the Ether is the cryptocurrency that helps run the platform or network.
When mining an ether, miners get an incentive. The supply of Ether is limited to 18 million per year. Every 12-14 seconds, there will be a new Ethereum block that is mined. The reward for this is 5 Ether, given to the computer who mined it.
#4 Investing and Trading Cryptocurrency in Singapore
As you may have read in the news, the Singapore government does not really promote cryptocurrencies.
Cryptocurrencies are not legally tendered in Singapore. The Monetary Authority of Singapore (MAS) does not regulate them and has strongly warned against them.
Nevertheless, if you are interested in investing and trading cryptocurrencies in Singapore such as Bitcoin and Ether, then one of the ways you can do is open a cryptocurrency virtual wallet. You can find a number of them around.
When choosing one, make sure that it includes:
Another thing is by opening a trading account for cryptocurrencies through CFDs or Contract for Differences. This is where traders can speculate on the future prices by opening a CFD position.
And when trading using CFDs, you will have to open a trading account through a broker. One known broker in Singapore is IG.
It is one of the only brokers in Singapore that offers CFDs on cryptocurrencies. You can choose from either Ethereum or Bitcoin.
Ultimately, when you decide to start mining, investing, or trading cryptocurrencies like Ethereum. You must be able to know the necessary things as well as have the means to go through it.
Always keep in mind the legal and regulatory impacts of particular projects. After all, this platform is still relatively new. So it is better to go through it with as much caution as possible.