You’ll need to comprehend a few basic principles regardless of how you get your ETH. Every Ethereum address is given a public and private key, and you’ll need a wallet to keep track of your crypto assets.
Consider a public key to be the crypto equivalent of an email address. People may give you ETH and Ethereum-based currencies like USDC and Dai using your Ethereum public key. You are free to distribute this to others.
Consider your private key to be your password. You should avoid offering this to individuals in general.
A lengthy string of letters and numbers makes up a private key. (It can also take the form of a seed phrase, which is a collection of words.) Keeping track of your private keys is critical. If you lose them, you’ll never get your Ether back.
Wallet: You’ll need a wallet to store and safeguard your Ether. If you’re just getting started, the simplest alternative is to create an account on Coinbase.com or through the Coinbase app, in which case you’ll interact with a “custodial wallet” that holds and safeguards your private keys for you. As you continue, you might want to look at additional wallets that are designed to work with decentralized finance (or DeFi) protocols, such as Compound (a loan and savings software) or Uniswitch.
What makes Ethereum valuable?
There are a few different methods to approach the solution to this issue. On one level, the value of Ethereum, like any other asset, is determined by market forces. It is available for purchase 24 hours a day, seven days a week, in Bitcoin, dollars, euros, yen, and other currencies. The price might change from day to day depending on demand. (Because it is still a new technology, the value of Ethereum is more volatile than currencies like the US dollar or equities like Fortune 500 companies.)
However, understanding why the market values it the way it does is a considerably more difficult task. Ethereum’s worth is predicated on its versatility as a platform for creating stablecoins and operating DeFi apps, which has resulted in a rising user base and increasing transaction fees, according to several investors.
What does Ethereum’s future hold?
As of early 2021, Ethereum is home to the great majority of blockchain applications and has a market capitalization of slightly under $200 billion, with over $55 billion in blockchain tokens. Because of Ethereum’s network effects, popular stablecoins like USDC and USDT are primarily used nowadays.
However, a slew of new smart contract blockchains are vying for market share. While Ethereum is now the market leader, there is increasing pressure on it to complete the move to Ethereum 2.0 effectively.