Crypto Consulting Group
The Crypto Think-Tank

FAQ

What is Ethereum?

Often times referred to as the "decentralized web", The Ethereum Network is a network of globally connected computers that lets anyone use decentralized applications that run on blockchain technology. Decentralized applications or DApps, use Ethereum's smart contracts to self execute without human error. These smart contracts will run exactly as programmed once conditions are met, requiring no trust, intermediary, or downtime.  Ethereum also allows users to build programs on their network. Users can create their own token to fuel their program or even create a crowd sale. For an in depth explanation, continue here.

What is a Blockchain?

A blockchain is a publically distributed ledger that stores every transaction in 'blocks' on every interconnected computer (node) on the network. This feature keeps the network secure because blocks are added in the chain chronologically and simultaneously on every node. Blockchains are the underlying technology for cryptocurrencies. They are more secure and efficient than the current client-server model, wherein your data is stored in a centralized location where it can be compromised by third party hackers or governments. Blockchain eliminates the need for trust since it enables full transparency. Every node validates transactions as they are added to the chain. This is a way to connect on a peer-to-peer network, globally, in a decentralized manner. To read more about blockchain technology, continue here.

How is Ether made?

The Ethereum network uses Ether (ETH/USD) to fuel actions initiated on the network. Unlike fiat currencies issued by a central bank, like dollars or British pounds, ETH is issued through open-source code executed in a decentralized fashion on thousands of nodes, or interconnected computers. That code determines which node gets ETH based on a number of calculations call proof-of-work. These are code based solutions to useless algorithms to validate transactions between users and further secures the network. This work is done by "miners", who "dig" through useless code until they land on the right number. Once they do, the miner is rewarded 5 ETH. The next user to post a solution to the blockchain is rewarded 2-3 ETH, which is called an Aunt/Uncle reward. The more computing power or Hash rate of a total network a node has, the more often they will mine a block. ETH blocks are mined about every 12 seconds. Read more about ether and mining here.

How can I make money?

Ether and other digital currencies are tradable just like stocks on the NYSE. To make money is to simply buy low and sell high. You can do this on various exchanges that allow you to connect a bank account. From these exchanges you can buy coins using USD from your bank account as well as sell ETH in exchange for USD. Read more about exchanges here.

How can I purchase Ether?

There are various methods of purchasing ether (ETH). The first method is to acquire them from a digital currency exchange like GDAX or Poloniex. These suppliers allow you to buy and sell ETH and other cryptocurrencies instantly. They are also extremely secure and offer charts and live market activity so you can monitor transactions. If you already have cryptocurrency and want to convert it to ETH, apps like shapeshift.io allows users to convert currencies and send them to the wallet of their choice. Here is a list of apps and exchanges you can use to purchase ETH.

Is it secure?

Yes, this is one of the reasons for its success. The underlying technology of the Ethereum network is the blockchain. This is every transaction using ETH that has ever been executed, which is spread across each interconnected computer or node on the network. In order to hack this, one would have to not only hack that block which is being solved by countless super computers at the same time, they would also need to hack every other block ever mined. The blockchain uses cryptography or code that can be hidden in plain site to further secure the network. Be sure to keep your wallets backed up and private key secure so that your funds aren't compromised. Learn more here.

Is it regulated?

 

Could my ether be hacked?

Your PC can be hacked if you use at-risk websites. If this happens you need to make sure you don't electronically store passwords for wallets and things of that nature. If hacked, those could be placed at risk. However you can't be hacked within the Ethereum network. Users scattered all over the world help secure the network by storing all of the data in the blockchain individually within their computers. For this to be hacked, an individual would have to hack your block and every preceding block ever executed on the blockchain instantaneously. For those of you with at risk computers, download securing software to ensure the safety of your electronic assets.

How can I use ether?

There are many ways to use ether (ETH) on the Ethereum network. Some are calling it the "new internet" because of its revolutionary tools. ETH is the fuel that powers the smart contracts on the Ethereum engine. These smart contracts have the ability to create an array of decentralized applications (DApps). This will enable you to use ETH as you desire in a pool of DApps varying in function. ETH is also an asset that is publically traded, thus giving it value. Those who don't use ETH on the network can buy and sell as much as they'd like. There are also apps like purse.io which functions as an amazon like marketplace that accepts digital currency payments.

What is mining?

This is done by "miners", who use massive computers to "dig" through useless code until they land on the right solution. Once they land on the correct solution they publish it on the blockchain for the other nodes to validate. Once 51% of the nodes come to a consensus that the solution is correct, the miner is rewarded a certain amount of coins dependent on the blockchain. This system is called proof-of-work (POW) because each node is verifying the work of one another. This adds an additional security layer to the blockchain. If one were to try and double spend, it would be caught by the nodes who agree on the correct solution and thrown out.