A Guide to Ethereum & Blockchains
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If you are new to this space and need an introduction to Ethereum and blockchains.
Please, refer to the guide below for a full scope.
Ethereum is a open-source, globally that provides a public ledger to validate and record transactions. A distributed network of computers (known as nodes) running software function like a global computer that enables developers to create their own crypto tokens and to build Dapps (decentralized applications). Smart contracts are programs that run exactly as programmed without the possibility of downtime or third-party interference. Since there are computational costs to execute operations on the Ethereum network, each Ethereum transaction requires a fee known as ‘’ that is paid for in ether (), the native cryptocurrency of Ethereum.
To interact with blockchains like Ethereum. You need a compatible digital wallet.
If you don't know what a wallet is, refer to this .
Digital wallets are critical if you plan on creating, sending or receiving NFTs.
Things you will use a wallet for;
Managing funds (ETH)
Interacting with blockchains
Using applications built on blockchains
You'll use a wallet to manage your Ethereum Tokens, NFTs and Ether. The easiest way to think about it– wallets are service providers.
Since wallets are service providers, you can use an array of types; Hardware, mobile/application and browser extension wallets.
To use Ethereum without issues, you'll want to choose a well-designed wallet that can interact with 'Web3' applications/protocols like Universe XYZ.
Wallets are convenient interfaces for blockchain accounts where you extend and interact with applications.
With blockchains, for transactions to be processed, you'll pay fees.
Typically, blockchain fees get paid in the respective currency of the network. It's unlikely you can pay fees without using a token native to the blockchain ecosystem.
For example; Bitcoin – Pay in BTC (Bitcoin) | Ethereum – Pay in ETH (Ether)
Examples of ERC-20 & ERC-721:
ERC-20 – DAI, wBTC, wETH, SUSHI, BOND , XYZ
ERC-721 – CryptoKitties, CryptoPunks, xyzDAO NFTs, Rarible Singles (1/1)
Note– Fees on specific blockchains like Ethereum are volatile. It's extremely wise to watch the prices of the blockchains you use and make judgements from there.
The majority of applications built on blockchains like Ethereum require certain transactions.
On Ethereum, it's common to send 'Approval' transactions. You need to set permissions so addresses and applications that need to access your balance and automate transactions on your behalf– can do so.
Without this, you'd have to enter in a lot more information that gets calculated by your wallet. There are also security risks present without the barrier of giving permission.
There are two types of addresses on Ethereum;
Smart Contracts (can be completely automated)
Externally owned Accounts (typically user addresses or routers)
Every account has a public and private key. A private key corresponds to a seed phrase when you create specific wallets.
NEVER REVEAL YOUR SEED PHRASE/PRIVATE KEY
It's critical to understand. If you do not control your private keys, then someone else controls your wallet. A compromised seed phrase or private key is dangerous to handle.
Specifically, there are immediate risks associated with malicious actors and centralized controllers if your private keys out of your control, it's been leaked or stolen etc.
DO NOT SEND CRYPTO or NFTs FROM ONE BLOCKCHAIN TO ANOTHER. IF IT'S NOT COMPATIBLE. IT IS LOST FOREVER.
For example; Wrapped Tokens on Ethereum (wBTC, wXTZ, wFIL, wZEC)
Applications get hosted on the Web3 layer and can be accessed directly by the Ethereum Virtual Machine. Most data is public and therefore accessible from blockchain explorers or bare terminals. Ethereum is an operating system with programmable money.
All addresses on Ethereum start with– 0x. You can register human-readable names and assign an Ethereum address to them for easier sending and receiving on the network.
The most popular providers of blockchain domains/name services are;
Easiest for use on Ethereum
Designed for use on Ethereum
Must be renewed
Easy and Accessible
Designed for use with many blockchains
Permanent
It's not necessary to own a blockchain domain or use a name service. It's more convenient.
With Ethereum, sometimes, there are options to pay for fees with tokens issued on Ethereum, also known as ERC-20 for fungible tokens (liquid & tradeable) or for non-fungible (illiquid & unique).
The transactions for a network get paid in the respective currency of the blockchain. To use different crypto on other blockchains, you need to wrap the cryptocurrency and give it rules for the new blockchain. (Refer to )
Metamask is ideal for Ethereum if you also want to use the Ethereum blockchain and participate in aspects of the ecosystem. Such as NFT platforms like or decentralized financial protocols like . The majority of activities on Ethereum get hosted via Smart contracts, which require transactions and payment in Ether. (ETH)
(ENS)