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What is the Ethereum Network

The Ethereum network is the most popular and widely used network today. Being its cryptocurrency the second in market capitalization of all cryptocurrencies, ethereum was the first cryptocurrency to raise aspects such as Smart Contracts and to give a use to its cryptocurrency, apart from being able to send it from one wallet to another.

The ethereum network was created by Vitalik Buterin with only 19 years old who started with this project in 2013. This network has become increasingly used and popular, due to the growth of its ecosystem, the appearance of new applications and the growth of the entire cryptocurrency market. Even so, ethereum has several problems that it must solve in order to be a network that can be used by anyone, quickly and economically. The ethereum network is characterized by using the solidity programming language and being one of the most decentralized networks there is.

Platforms

One of the main advantages that ethereum has over its competitors is the ecosystem it has around it. Where we find many more platforms than any other network, being the first and oldest, with a relatively simple language for programmers like solidity, the network effect of ethereum is very large.

Being an older network, developers began to create their dapps or platforms on this network, and recently we began to see other networks with large ecosystems, but still far from the great variety and number of platforms that ethereum has.

The platforms or dapps are what allow you to interact with the ethereum network and perform aspects such as staking, cryptocurrency exchange in a decentralized way, lending & borrowing, play to earn games, buy NFT’s, take out insurance and many other functions that you can find in ethereum network platforms. Here is a guide to some of the main platforms in ethereum if you want to know more in detail how they work.

Immutable X

It is worth mentioning that even though there are many platforms on ethereum, due to their high cost of use, we have not yet dedicated a guide to many of them, even though they are very good platforms, because using them requires a high cost in gas fee.

Advantages and Disadvantages

If you have never used the ethereum network, you may think that it is the best and works well as it is the second cryptocurrency with the highest market capitalization. But nothing could be further from the truth, it is that ethereum is a network with many problems that must be solved in order to be used globally.

If you have already used or tried to use the ethereum network, you will have already seen the high commissions it has, and how expensive it is to use this network. At the moment, ethereum is developing ethereum 2.0 which seems to be the solution to the scalability and high gas fee problems that ethereum currently has. As we commented, the triangle dilemma must always be taken into account when talking about the advantages and disadvantages of a blockchain.

Even so, ethereum has very positive aspects that have made it continue to remain the second largest cryptocurrency, which are the following:

Decentralization: The decentralization that ethereum has, is one of the main aspects that make it so good and secure, where many criticisms of other blockchains are directed. Being many times less decentralized than ethereum. Etheruem is a very decentralized network, and this is one of the main reasons why it is such an expensive network to use. Since it is very complicated to have a very decentralized and fast network, as we discussed in the triangle dilemma. Even so, decentralization was one of the main reasons why bitcoin and many cryptocurrencies started, and it is a great advantage to have such a decentralized network.

Security: Along with decentralization, ethereum is a very secure network, being so decentralized, which prevents it from being very complicated to make attacks on the network or modify any transaction. This adds more confidence to users when using this network, knowing that it is much more complicated to hack or modify than another more centralized network.

Ecosystem: The ecosystem that ethereum has is the largest, which allows people using the ethereum network to have access to many different platforms with different uses. And platforms that you will only find with these functionalities in ethereum, being the network that there are more developers.

On the other hand, ethereum also has disadvantages that its competitors have taken advantage of to grow in a very fast way and give users an alternative to use this network.

Slowness and Cost: As its popularity has increased, the ethereum network has become very expensive to use and slow, where transactions can take several minutes to complete, or even pay for the transaction and fail. Considering the high cost of the gas fee, it is quite a lot of money you can lose for a transaction to fail.

This is mainly due to the high decentralization that ethereum has, and the small amount of transactions per second that the network can perform. Although they say that ethereum 2.0 will solve this problem, it is currently a network that can not be used if you go with a capital of less than $ 5,000-10,000, since the transaction cost or gas fee can be so high that it does not compensate what you pay in commissions to make any transaction.

Commissions

Commissions on the ethereum network are a big issue, and as such, let’s take a look at what you need to know in order to spend the minimum if you want to use this network. At the time of writing, the cost of a single transaction is $12.99.

The first thing is to understand that, depending on the transaction, the cost may be different, depending on the complexity of the transaction. Sending cryptocurrencies to another wallet is not the same as using uniswap or buying a NFT.

Another important aspect is time. The cost of the gas fee varies depending on the number of people using the network. When there are very specific events, you can see very high gas fees, so look for times to make the transaction when there are few people using the network. Sunday evenings are usually when you can find gas fees at a lower price.

Use etherscan.io/gastracker or another platform to track the price of the gas fee, so you can see when it will be cheaper to make the transaction. This way you can save on gas fees. At peak times, we have seen gas fees as high as $400 for a transaction. This happens at times of high volume, where people raise the amount they are willing to pay to get their transaction done first.

In a very simplified way, when you make a transaction, you can pay a little more to make your transaction a higher priority and ensure that it will go through. For this reason, when there is a large volume, bidding on commissions makes the price of the gas fee increase.

Platform for viewing transactions

The ethereum network, being a public network, you can view all transactions that take place on it. To do this, you can use different sites, although the most popular and used is etherscan.io.

Here, you can search for an address, whether it is a token contract or a wallet address, and see all the transactions that have been made at that address. Although it has many uses, the most common use is to view transactions from your waller or other wallet.

This, especially when you send tokens and they do not appear in your wallet, problems with a transaction, or to see whether or not a transaction has been made in your wallet, is very useful.

Compatible wallets

Finally, if you want to use the ethereum network, you will need a wallet to be able to interact with platforms such as uniswap or curve, among many others. 

The most widely used is metamask, a web wallet that you can add as an extension in browsers like Chrome, or use it from your cell phone on the ethereum network. Where you can keep your cryptocurrencies safer and use them in decentralized platforms, either to exchange your cryptocurrencies for others, staking, farming or many other options.

There are also other wallets that you can use in this network, such as, trezor one, ledger nano S, Exodus, Coin 98 or Mist among many others. My recommendation is to use metamask, although you also have these other wallets that are compatible with ethereum.