Introduction: The Elements of Interacting with Ethereum
When people think about using cryptocurrency, they almost always think about using Ethereum (ETH). And while Ethereum is a cryptocurrency, it is also a decentralized internet that exists through layers of interaction, like ABC, or a connected way of communicating. Whether you love cryptos or are simply curious about impact of Ethereum, knowingbuzz, the key parts to understanding what Ethereum is an interaction with Ethereum, requires you Washington to (at least), understand three considerations gas and other fees/wallets, and Dapps (decentralized Apps).
This guide will cover and definitions in everyday language as an entry point to study Ethereum.
What Are Gas Fees And Why Should You Care?
Gas fees are the transaction fee that you pay when you use the Ethereum blockchain. In other words, every time you send ETH or interact with a smart contract you must pay gas.
Some key terms:
Gwei is the denomination; is a small enough fragment of ETH to illustrate what gas prices are (like 0.001,) hence it is relatively common (like dollars).
Gas Price refers to how quickly you want to process your transaction (i.e., a higher gas price means quicker execution).
For example, sending ETH might cost you 0.001 ETH in gas. If you are interacting with a dApp and you are activating a number of smart contracts, then it could cost you more, especially if there is congestion on the network.
Why It Matters:
High fees can make Ethereum cost-prohibitive depending on the transaction, leading to very real implications for usability and scalability.
Many Layer-2 protocols from Arbitrum and Optimism are currently being built to relieve gas pricing of the transaction.
Basics Of An Ethereum Wallet
A wallet is how you connect to the Ethereum Blockchain, it’s where you store your private keys, send and receive ETH, and interact with various DApps.
Types of Wallets:
Hot wallets keep you connected to the internet, so are easy to use, such as MetaMask and Trust Wallet.
Cold wallets save information offline, such as Ledger and Trezor. If you are holding a large amount of crypto, you will want to go this route.
Wallet Functions:
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Securely store ETH and ERC-20 tokens
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Easily connect to DeFi protocols
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Sign transactions for smart contracts
Wallet Security:
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Backup your seed phrase
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Keep only small amounts in a hot wallet
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Use a hardware wallet for larger amounts
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Be aware of fake DApps or browser extensions that are phishing for your private keys.
What are DApps, and how do they work?
DApps (Decentralized Applications) run on the Ethereum blockchain. Because of this, they are censorship resistant, transparent, and owned by the users.
Types of DApps:
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DeFi (like Uniswap, Aave): you can trade or lend assets without needing to go through a bank
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NFT’s (like OpenSea): you can buy and sell digital art and media
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Gaming (like Axie Infinity): play-to-earn games
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DAOs / governance (like Aragon): user-led
DApps vs traditional apps:
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No middlemen
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Immutable code
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All actions are done via smart contracts
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Users own their own data
Using Ethereum in Practice: How it all works
In the general sense, the workflow for using a DApp is:
Step 1: Connect your wallet (for example, MetaMask)
Step 2: Authorize an interaction with the contract
Step 3: Pay your gas fee for the processing
The DApp executes on a public blockchain via a smart contract.
Ethereum is a global computer that runs on users, is validated by miners and validators, and is the basis for a ever-evolving community.
In conclusion: Ethereum is the future of the web
Gas fees, wallets, DApps… what this all means is that if you learn about Ethereum, the relationship you are building with crypto will grow. Whether investing, building, or just discovering, knowing these basics will keep you safe but more so, avoid painful mistakes allowing you to experience everything that Web3 has to offer.
