WHAT IS ETHEREUM (Basics)?

What is an altcoin?

An altcoin is a blockchain based digital currency based on the concept, but is separate from Bitcoin. Ethereum is considered an altcoin.

Who created Ethereum?

Ethereum was created by a Canadian programmer named Vitalik Buterin with an additional group of founders. The additional group of founders included: Gavin Wood, Anthony Di Iorio, Charles Hoskinson and Joseph Lubin.

What is Ethereum?

Ethereum is a programming language and platform that allows developers to build applications on top of an already established blockchain. Ethereum is set up to be a Do it Yourself (DIY) Platform for programmers to create smart contracts and decentralized applications, also referred to as “Dapps.”

When was Ethereum created?

Ethereum was first launched on July 30, 2015 with its ‘Frontier’ version of the Ethereum client. This allowed for Ethereum mining clients to be set up in order to established a decentralized network of computers.

Why is Ethereum important?

Ethereum is important because it allows for the decentralization of the internet by giving people a fully decentralized network of computers to build on top of. Programmers can focus on creating meaningful projects rather then creating different blockchains with little throughput.

Where can I get Ether (ETH)?

Ether can be purchased at your local Bitcoin Mart ATM with cash, a variety of online exchanges with card and in rare cases in person exchange.

What is Ether?

Ether is the currency token of the Ethereum network. Ether acts as a token of exchange on the decentralized Ethereum network.

What is the difference between Ethereum and Bitcoin?

Bitcoin aims to be an alternative currency by being a true store of value and medium of exchange, whereas Ethereum is a platform that facilitates programmable contracts and applications in its own currency. Bitcoin can be seen as a digital version of gold, whereas Ether is considered to be digital version of oil.

How is Ethereum similar to Bitcoin?

Both Ethereum and Bitcoin are secure forms of digital money because they are both decentralized systems that allow for true ownership of funds and are protected by Proof of Work algorithms.

How many Ether are there?

Currently there is an infinite supply of Ether, but the Ethereum foundation has implemented a burn mechanism that reduces the amount of Ether rewards to miners. This burn mechanism along with the move from Proof of Work to Proof of Stake will decrease the supply of Ether.

What is a coin and a token?

A coin operates on its own blockchain, acts as money and is mineable. A token is used to identify any unit of account on a blockchain.

Does Ethereum require internet to use?

Although, internet is not required to receive Ether, it is required to send Ether over the Ethereum network

What happens if the internet is down does the Ethereum network stop? No, if the internet is shut down across Canada there are other computers around the world confirming transactions on the Ethereum network.

WHAT IS ETHEREUM (Advanced)?

How does Ethereum work?

Ethereum is a generalized blockchain that runs on a programming language called Solidity and allows for developers to create projects using blockchain technology. Programmers on the Ethereum network write a number of smart contracts based on specific structure in order for easy exchange between the various projects on the platform.

What is a Smart Contract?

A smart contract is a self-executable contract that is governed by a hard set of rules. Smart contracts are deemed ‘smart’ because all aspects of the contract including enforcement, management, performance and payment are handled by the code.

Who owns Ethereum?

The Ethereum network is not owned or controlled by any single individual. The Ethereum network is made up of thousands of computers.

What are Gas Fees

Gas fees are a fee paid to the Ethereum network in order to execute a transaction. These gas fees fluctuate based on the network activity at the time of the transaction. Gas fees are most commonly paid in Ether, but can be in other ERC-20 tokens depending on the project. Gas fees are priced in a small fraction of Ether called GWEI.

What is GWEI?

A GWEI is about one billionth of an Ether (0.000000001).

HOW TO ETHEREUM

What can I use Ether for?

Ether can be used to purchase a variety of goods and services online and in person. There are 250+ major companies that allow for Bitcoin or Ether to be exchanged for goods and services. Click here to see which companies accept Ether today!

How can I buy Ether?

The most secure and anonymous way to purchase Ether is with cash from an Ethereum ATM. Purchasing Ether with cash allows you to directly take ownership of the Ether and not rely on a third parties to keep and secure your tokens.

When you hear about people losing their cryptocurrencies due to a hack this is a result of people trusting third party online exchanges to safely and securely store their money. The Ethereum network itself is nearly un-hackable.

Do I have to buy a full Ether?

No, this is a common misconception that you must purchase a whole or full Ether. Ether can be purchased in any increment; start building towards a full Ether today with as little as $20 at your local Bitcoin Mart ATM.

How do I store my Ether?

Ether can only be stored in an Ethereum based wallet which can be an app on your phone or computer or a dedicated hardware device. You must have a wallet to purchase or use Ether.

It is crucial that you DO NOT lose access to your Ethereum wallet as your funds will be lost forever.

What is an Ethereum wallet

An Ethereum wallet is a software that manages your private and public keys and gives you access to your funds that are stored on the Ethereum blockchain. An Ethereum wallet differs from a Bitcoin wallet as it allows you to store a variety of tokens besides just Ether, the native token on the blockchain. Ethereum wallets allow you to send and receive ERC-20, ERC-721 and ERC-1155 tokens.

What is an Ethereum private wallet key?

An Ethereum private key allows you to access your ERC-20, ERC-721 and ERC-1155 tokens on the blockchain. The private key allows you to sign transactions on the Ethereum network to send Ethereum based tokens to someone. Having the private keys of an Ethereum wallet is similar to having a cheque book. A cheque cannot be cashed unless the owner of the cheque signs it.

The private key of a wallet is sometimes called a recovery seed or pneumonic seed phrase. Your private key SHOULD NEVER be shared with anyone. The recovery seed or pneumonic seed phrase should be written down on paper and stored securely. The private key should never be stored on your computer, your phone or online.

What is a Ethereum public wallet key?

Similar to a Bitcoin public key, it is the address you give to other people when you want them to send you Ether over the Ethereum network. The public key is linked to the wallets private key, and it is impossible for someone to get the private key from the public key.

How do Ethereum transactions work

As a user, Ethereum transactions work similar to an auto deposit E-transfers, but the address you are sending Ethereum based tokens to is someone’s public key.

Example: 0xaE4D458cAA0C23871f6a156635255Df5018B02f3

It is VERY IMPORTANT that you double or triple check the public wallet address you are sending your bitcoin to. Sending bitcoin to an incorrect wallet address will create permanent lose of funds.

Can I send Ether to someone across the world?

Yes, Ethereum is borderless, you can send as much or as little Ethereum based tokens to anyone across the world for as little as $3-10 CAD, this is depending on the Ethereum network gas fees at the time of the transaction. It is should be noted that some Ethereum based tokens have transactions fees less the $1.

Can I take Ether anywhere in the world?

Yes, Ethereum is borderless! As long as you have access to your wallet, you can use or take Ether anywhere in the world with you and nobody can stop you from doing so. Ethereum allows for full control over your own money, unlike the traditional banking system.

What happens if I lose my Ethereum wallet?

If you lose access to your wallet, you have lost your ability to access your Ether and all other Ethereum based tokens on the blockchain and therefore have lost your funds forever. Losing access to your wallet means losing your private key/ pneumonic seed phrase. It is critical that you DO NOT lose access to your private key/ pneumonic seed phrase.

Are Ether transactions reversible?

Ether transactions, similar to Bitcoin transactions, are unreversible. This is one way it solves the ‘double-spend’ problem. It is VERY IMPORTANT that you double or triple check the public wallet address you are sending your Ether to.

Is Ether trackable?

In short yes and no, although the transactions made on the Ethereum network are fully viewable by the public, the identities involved with the transactions are unknown to the public. This information is only available to businesses or institutions who you have personally given your information to.

Is Ether illegal to own in Canada?

Although Ether is not legal tender in Canada, it is not illegal to own, send or mine Ether in Canada. Ether transactions and institutions are regulated by FINTRAC, which is the Financial Transactions and Reports Analysis Center of Canada. Bitcoin Mart Ltd is fully registered and follows the guidelines of FINTRAC.

Do I need to pay taxes on Ether?

The Canadian Revenue Agency (CRA) does not consider holding or storing Ether a taxable event. You may be involved in a taxable scenario in some of the following examples:

• Selling or converting Ether into Canadian Dollar.
• Selling or converting Ether into another virtual/ crypto currency, such as Ether, Litecoin, etc.
• Buying goods or services with Ether or other cryptocurrencies

Click here for full information regarding taxes in Canada with Ether or other cryptocurrencies Bitcoin Mart Ltd is not able to offer tax advice regarding the cryptocurrency it offers. It is advised to speak with a certified tax professional regarding questions about your potentially taxable scenarios.

MORE ABOUT ETHEREUM

Is Ethereum and Ethereum Classic the same?

No. Ethereum and Ethereum Classics are two different tokens. When Ethereum was created there were two different philosophies the founders had when developing their project. There was a group that believed that code was law and there were others that believed that the code could be re-written based on the circumstances. As a result, the network was forked and Ethereum Classic was named as the original blockchain that believes code is law. Ethereum Classic is immutable meaning it cannot be changed over time.

What are ERC-20 Tokens?

The ERC-20 is a standard for replaceable (fungible) tokens on the Ethereum network. The ERC-20 gives structure to tokens and allows for ease of exchange between other ERC-20 tokens. The ERC-20 standard states that there must be several functions and events for a token to be created.

What are ERC-721 Tokens (NFTs)?

The ERC-721 is a token standard for non-fungible tokens (NFTs) on the Ethereum network. These non-fungible tokens are all unique and this means that one NFT cannot be replaced with another NFT.

What are ERC-1155 Tokens?

The ERC-1155 is a rare token standard that looks to provide both fungibility and lower transaction fees. This is done by writing a single contract to represent multiple tokens and allows for batch operations which significantly reduces the transaction fees.