Ethereum

<p></p><p>Ethereum has become one of the most popular and widely used blockchains in the world of cryptocurrency. As the second largest crypto asset after Bitcoin, Ethereum powers a range of groundbreaking decentralized applications across DeFi, NFTs, games, governance and more.</p><p>However, Ethereum and its ecosystem can seem complex for beginners who are just starting out in crypto. To help you master the basics, we’ve compiled some of the top Ethereum crypto tutorials covering everything from mining and nodes to gas fees, smart contracts, dapps and more. Follow along as we break it all down step-by-step!</p><h2 id="header-0">How Ethereum Mining Works and Its Impact on the Environment</h2><p>Ethereum, like Bitcoin, is powered by a decentralized network of miners. In order to add new blocks to the Ethereum blockchain, miners use specialized hardware to solve complex computational math problems. Whoever solves the problem first gets to add the next block and receive a block reward in ETH for their efforts.</p><p>This process of mining verifies and secures each transaction on the Ethereum network. However, it requires an immense amount of computing power and electricity to run these operations 24/7. Some estimates show that Ethereum mining currently uses as much electricity as the entire country of Libya! This has raised environmental concerns over crypto&#39;s energy consumption.</p><p>Several solutions are in progress to curb Ethereum&#39;s energy use, including a major shift from proof-of-work mining to a more efficient proof-of-stake consensus model, which Ethereum has started transitioning to. Other green mining initiatives like using renewable energy sources can also help make Ethereum mining greener.</p><p>For more on how Ethereum mining works and its energy impact, check out <a href="https://btcpers.com/how-ethereum-mining-works-and-its-impact-on-the-environment" rel="noopener noreferrer nofollow">our guide</a>.</p><h2 id="header-1">Ethereum Gas Fees Explained Simply for Beginners</h2><p>Sending transactions or executing smart contracts on the Ethereum blockchain requires a small fee known as &#34;gas.&#34; This covers the computing energy needed to process that operation. Gas fees are denoted in GWEI, a denomination of ETH. Sending ETH transfers or complex smart contracts require more computational power, and thus higher gas.</p><p>Gas prices fluctuate based on the network&#39;s traffic and congestion. When the network is busier, gas prices increase as users compete to get their transactions processed faster. You can save on gas by setting lower gas price limits on transactions you don&#39;t mind waiting a bit longer for.</p><p>While Ethereum gas fees were exceedingly high in 2021 during peak activity, upgrades like EIP-1559 have added some improvements to fee pricing. Future optimizations like sharding should significantly reduce gas costs.</p><p>For a simple beginner&#39;s guide to gas fees, visit <a href="https://btcpers.com/ethereum-gas-fees-explained-simply-for-beginners" rel="noopener noreferrer nofollow">our explanatory guide</a>.</p><h2 id="header-2">Getting Started with Ethereum Smart Contracts as a Developer</h2><p>Smart contracts are self-executing programs stored on the Ethereum blockchain that run when predetermined conditions are met. They allow developers to build decentralized applications on Ethereum without needing centralized servers.</p><p>Developing smart contracts requires learning Solidity, a programming language designed for Ethereum. It&#39;s similar to JavaScript. Remix IDE is a browser-based IDE used to write, test and debug Solidity smart contracts.</p><p>Smart contracts are compiled into bytecode so the Ethereum Virtual Machine can execute them. You&#39;ll need to connect with a wallet like Metamask and deploy the contract to a test network like Ropsten before mainnet. Pairing smart contracts with web3.js helps DApps interact with the blockchain.</p><p>For a step-by-step guide to coding your first smart contract as a developer, head over to <a href="https://btcpers.com/getting-started-with-ethereum-smart-contracts-as-a-developer" rel="noopener noreferrer nofollow">our introductory tutorial</a>.</p><h2 id="header-3">Pros and Cons of Ethereum Staking for Passive Income</h2><p>Ethereum staking allows you to earn rewards on your ETH by helping validate transactions. Much like mining, &#34;stakers&#34; lock up their ETH in a validator node. The node verifies activity on the network and receives more ETH in return.</p><p>The pros of Ethereum staking include earning up to 6-10% APY on your crypto without needing any special hardware like mining rigs. It&#39;s energy efficient and you can stake independently or by joining a staking pool.</p><p>However, staked ETH is locked up until withdrawals are enabled post-merge. There&#39;s also the risk of penalties if your validator misbehaves. And staking returns are variable based on the network&#39;s staker participation rate.</p><p>For more details, check out <a href="https://btcpers.com/pros-and-cons-of-ethereum-staking-for-passive-income" rel="noopener noreferrer nofollow">our full overview</a> covering the pros and cons of Ethereum staking.</p><h2 id="header-4">Ethereum Scalability Solutions Like Sharding and Rollups</h2><p>Ethereum faces scaling challenges as network congestion drives up gas fees and transaction times. But developers are implementing key upgrades like sharding and rollups to significantly boost Ethereum&#39;s throughput.</p><p>Sharding will split the blockchain into 64 new chains to spread out transaction processing. This will help Ethereum reach an estimated 100,000 transactions per second! Meanwhile rollups can bundle and validate transactions off-chain before submitting data to Layer 1, reducing congestion.</p><p>There are two types of rollups - ZK-Rollups for privacy and Optimistic Rollups for cheaper fees. Multiple rollup solutions like Arbitrum and Optimism are live today helping scale decentralized apps now before sharding arrives post-merge.</p><p>For an in-depth look at Ethereum&#39;s roadmap to massively scale the network, read <a href="https://btcpers.com/ethereum-scalability-solutions-like-sharding-and-rollups" rel="noopener noreferrer nofollow">our guide on sharding, rollups and more</a>.</p><h2 id="header-5">Decentralized Finance (DeFi) Use Cases Built on Ethereum</h2><p>Decentralized finance (DeFi) runs financial services like lending, trading and borrowing on public blockchains like Ethereum instead of through centralized intermediaries. DeFi offers a permissionless, transparent alternative traditional finance by leveraging smart contracts.</p><p>Top DeFi use cases built on Ethereum include:</p><ul><li>Stablecoins like DAI and liquidity pools on Uniswap for trading/stable value.</li><li>Lending/borrowing platforms like Aave and Compound for earning interest.</li><li>Decentralized exchanges like Uniswap for trustless swapping tokens.</li><li>Prediction markets like Augur for speculating on events.</li><li>Decentralized insurance protocols like Nexus Mutual for covering smart contract risks.</li></ul><p>For more examples of disruptive DeFi applications innovating on top of Ethereum, check out <a href="https://btcpers.com/decentralized-finance-defi-use-cases-built-on-ethereum" rel="noopener noreferrer nofollow">our DeFi use case guide</a>.</p><h2 id="header-6">Non-Fungible Tokens (NFTs) on Ethereum and Their Significance</h2><p>Non-fungible tokens (NFTs) utilize the Ethereum blockchain to establish provenance and digital scarcity for unique, one-of-a-kind assets like art, collectibles and more. NFTs have opened up new crypto use cases like digital art sales, gaming assets and metaverse virtual real estate.</p><p>Top NFT marketplaces like OpenSea run on Ethereum, allowing users to mint, buy and sell NFTs representing ownership. NFTs are revolutionizing entire industries by bringing verifiable digital ownership to unique assets.</p><p>Even established brands like Nike and Marvel are now launching Ethereum NFTs showcasing the technology&#39;s potential to transform how we assign value and rights in the digital realm.</p><p>Learn more about the game-changing world of NFTs in <a href="https://btcpers.com/non-fungible-tokens-nfts-on-ethereum-and-their-significance" rel="noopener noreferrer nofollow">our beginner&#39;s guide</a>.</p><h2 id="header-7">Ethereum Improvement Proposals (EIPs) and How They Evolve Ethereum</h2><p>Ethereum Improvement Proposals (EIPs) allow developers to propose changes to Ethereum&#39;s architecture and operations. EIPs play a key role in upgrading the network and introducing new features over time like staking, new cryptographic functions and more.</p><p>Anyone can draft an EIP - they are reviewed and discussed by core developers to determine whether they align with shared goals before moving to acceptance, testing and eventual integration via network upgrades like hard forks.</p><p>Major accepted EIPs over the years include EIP-1559 which improved gas fee pricing, and EIP-4844 which paved the way for the upcoming proof-of-stake merge. EIPs enable Ethereum to continually evolve and improve through community collaboration and peer review.</p><p>For more details on the EIP process and examples of impactful EIPs, read <a href="https://btcpers.com/ethereum-improvement-proposals-eips-and-how-they-evolve-ethereum" rel="noopener noreferrer nofollow">our in-depth guide</a>.</p><h2 id="header-8">Running an Ethereum Node for DApps and Mining</h2><p>An Ethereum node is software that allows you to connect to the Ethereum network and blockchain. Nodes can be run on consumer laptops, validators like mining/staking rigs, servers or cloud networks. They provide a portal to broadcast transactions and interact with Ethereum.</p><p>Nodes are essential infrastructure for the network. Running your own full node provides increased security, privacy and allows you to use Ethereum in a self-sovereign, trustless way. It also gives access to developing decentralized apps.</p><p>Mining nodes require GPU rigs to solve computational puzzles. Non-mining nodes can be run on any hardware meeting minimum spec requirements. Client apps like Geth and others can be used to spin up a node. Maintaining consensus is key.</p><p>Check out <a href="https://btcpers.com/running-an-ethereum-node-for-dapps-and-mining" rel="noopener noreferrer nofollow">our guide for a step-by-step walkthrough</a> on running and connecting to your own Ethereum node.</p><h2 id="header-9">Ethereum Account Types Like Externally Owned Accounts and Contract Accounts</h2><p>There are two main account types in Ethereum - externally owned accounts (EOAs) and contract accounts.</p><p>EOAs have public-private keypairs and are controlled by users who can send transactions from them. Your Ethereum wallet contains an EOA. It represents your identity on the network.</p><p>Contract accounts are controlled by code instead of private keys. They are governed by the smart contract deployed to that address, which executes automatically on certain conditions being met.</p><p>Both account types have an Ethereum address. But only EOAs can initiate new transactions like sending funds or deploying contracts. Contract accounts&#39; logic can only activate in response to an EOA transaction.</p><p>For an overview of Ethereum&#39;s account architecture and how public/private keys and contracts work, read <a href="https://btcpers.com/ethereum-account-types-like-externally-owned-accounts-and-contract-accounts" rel="noopener noreferrer nofollow">our account types guide</a>.</p><h2 id="header-10">Ethereum Virtual Machine (EVM) and How It Executes Smart Contracts</h2><p>The Ethereum Virtual Machine (EVM) is software on the network that handles deployment and execution of smart contracts. It&#39;s like a distributed global computer processing bytecode instructions for contract accounts.</p><p>When an EOA sends a transaction to deploy or interact with a contract, the EVM executes its logic based on input parameters and variables. It updates the contract&#39;s storage in response to state changes. The contract then outputs events to trigger further actions like sending ETH.</p><p>The EVM ensures deterministic execution by performing the same steps regardless of the node processing it. All nodes reach consensus on the output and updated state to maintain a unified ledger. Future EIPs aim to enhance the EVM&#39;s capabilities and efficiency even further.</p><p>To learn more about how this foundational Ethereum technology works, check out <a href="https://btcpers.com/ethereum-virtual-machine-evm-and-how-it-executes-smart-contracts" rel="noopener noreferrer nofollow">our in-depth EVM guide</a>.</p><h2 id="header-11">Oracles in Ethereum and Their Role in Decentralized Applications</h2><p>Oracles are services that provide external real-world data to smart contracts on Ethereum. Since blockchains cannot directly fetch info like market prices from the internet, oracles act as middleware to facilitate data flows.</p><p>Oracles enable a range of use cases like decentralized insurance payouts based on flight delays, trade finance resolutions based on shipment statuses, and stablecoin issuance based on real fiat collateralization.</p><p>Top oracle networks like Chainlink, Witnet and Tellor gather data from off-chain APIs. They use economic incentives and consensus mechanisms to keep data feeds accurate and resistant to manipulation.</p><p>For an overview of how oracles expand the capabilities of smart contracts and the options available, dive into <a href="https://btcpers.com/oracles-in-ethereum-and-their-role-in-decentralized-applications" rel="noopener noreferrer nofollow">our guide on oracles</a>.</p><h2 id="header-12">Liquid Staking Ethereum and Its Benefits for Validators</h2><p>Liquid staking protocols like Lido allow Ethereum validators to earn staking rewards while still having liquidity. Normally staked ETH is locked up until withdrawals are enabled post-merge. But liquid staking derivatives let you get rewards while transferring liquid token representations of your stake.</p><p>This solves a major issue for validators and DeFi users needing liquidity for other opportunities without missing out on staking yields. Liquid staked ETH can be used as collateral for loans, LPing, governance rights and more.</p><p>However, liquid staking derivatives come with a slight discount to staked ETH&#39;s value and usage limitations. Understand the tradeoffs before converting to liquid staked tokens.</p><p>For a full overview, dive into <a href="https://btcpers.com/liquid-staking-ethereum-and-its-benefits-for-validators" rel="noopener noreferrer nofollow">our guide on liquid staking</a> and how it provides more flexibility.</p><h2 id="header-13">Ethereum Gas Mechanism and Best Practices to Optimize Costs</h2><p>Ethereum&#39;s gas mechanism dynamically prices execution costs for transactions and smart contracts based on demand to incentivize efficiency. Gas aims to allocate scarce computing resources effectively when blocks are congested.</p><p>You can optimize your gas costs by:</p><ul><li>Using lower maximum gas prices (gwei limit) when the network isn&#39;t overloaded.</li><li>Structuring smart contracts efficiently to minimize storage writes which are expensive.</li><li>Consolidating ETH transfers into fewer transactions when possible.</li><li>Moving activity to Layer 2 rollup-based scaling solutions like Arbitrum which have lower gas fees.</li><li>Using wallets that let you precisely adjust gas estimates. Overestimating wastes gas which you still pay for.</li></ul><p>Understanding gas economics leads to huge cost savings and enables you to properly budget DApp/DeFi use.</p><p>For more gas optimization tips and a deeper look at how Ethereum&#39;s gas mechanism works, read <a href="https://btcpers.com/understanding-ethereums-gas-mechanism-and-how-to-optimize-costs" rel="noopener noreferrer nofollow">our guide</a>.</p><h2 id="header-14">Dangers of Malicious Ethereum Smart Contracts and Security Best Practices</h2><p>While Ethereum smart contracts offer immense potential, bugs and security flaws have led to exploits like the DAO hack where millions in crypto was stolen. Attackers look for vulnerabilities in both contracts&#39; code and the surrounding infrastructure interacting with them.</p><p>Follow security best practices like:</p><ul><li>Rigorously auditing contract code for bugs before launching.</li><li>Freezing key functions pre-deployment for testing.</li><li>Monitoring activity and reserving upgrade capabilities to fix issues.</li><li>Limiting access with authentication controls, withdrawal limits and other safeguards.</li><li>Spreading out risk across multiple, smaller contracts versus centralizing in one large contract when possible.</li></ul><p>Learning solidity best practices, using well-vetted templates and getting contracts audited by experts will go a long way in building secure Ethereum applications.</p><p>For more advice on safeguarding your Ethereum smart contracts and avoiding pitfalls, read <a href="https://btcpers.com/the-hidden-dangers-of-malicious-ethereum-smart-contracts-and-how-to-stay-safe" rel="noopener noreferrer nofollow">our comprehensive security guide</a>.</p><h2 id="header-15">Conclusion</h2><p>Ethereum empowers developers to build decentralized, blockchain-based applications that are transforming countless industries. With these beginner tutorials, you now have the essentials to get started with Ethereum, whether you want to mine tokens, run a node, code smart contracts or simply understand key concepts behind this groundbreaking technology.</p><p>Check out the rest of our guides on BTC Peers to delve deeper into Ethereum and other crypto fundamentals!</p>

The Best Crypto Tutorials for Mastering the Basics / Issue 4

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