The crypto classes are rising… and so are the miners’ incomes. These operators, who are either individuals or companies, validate and secure the transactions of cryptomonads. In February 2021, Ethereum’s miners’ income reached 1.37 billion dollars, according to the specialized media The Block. An amount never equaled in the history of the second crypto money. Between January and February 2021, these revenues jumped by 65.1%. It should be noted that mining revenues are made up of transaction fees and rewards for validating a block. In February 2021, 52.8% ($722.8 million) of Ethereum’s miners’ revenues came from transaction fees. Between January and February 2021, transaction fees increased by 122.1% to an average of $12 (at the time of publication). On February 22nd, it even cost about $39 to complete a transaction on the network… no matter what the amount.
What is Ethereum?
Ethereum is a blockchain protocol imagined by Vitalik Buterin, a Russian-Canadian developer. Launched in 2015, Ethereum, the second blockchain after Bitcoin in terms of valorization, allows the development of decentralized applications, called Dapps. It is different from Bitcoin, which focuses solely on peer-to-peer payment. Tens of thousands of developers are building applications on Ethereum for the financial, entertainment, cloud, and real estate sectors. The developer community of the Ethereum blockchain is one of the largest and most active in the world.
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How does Ethereum work?
Ethereum is inspired by Bitcoin (storage of the history of network transactions) but it is more complex as it allows to build more complex applications. In particular, Ethereum allows the creation of smart contracts, contracts that are automatically executed on the network following predefined conditions. Let’s illustrate this with a concrete case: if a plane is at least 1 hour late, the airline company will automatically reimburse 20% of the plane ticket thanks to a smart contract.
Like the Bitcoin blockchain, Ethereum has its own crypto-money, the ether, also called Ethereum in the community. It is not issued by a bank or other organisation but by the protocol itself. The ether, like other crypto-currencies, is put into circulation via mining. The “miners” perform mathematical calculations with their network hardware to confirm and secure transactions. It should also be noted that Ethereum, like any public blockchain, works with a consensus algorithm to ensure that all network players agree on a single version of the blockchain data at all times.
The Ethereum wallets
It is possible to keep your ethers at the exchange where you made the purchase or in a wallet, a physical or digital electronic wallet. It avoids the risks of hacking that can occur on crypto-currency platforms and allows you to control your funds. Wallets consist of a public key, known to all, which corresponds to an Ethereum address, and a private key, known only to the wallet holder. Physical wallets are similar to USB keys. Two players are competing on the market, the French Ledger and the Czech Trezor. Digital wallets, i.e. software wallets, are accessible on computers and mobile phones. Some examples: ArcBit, BitGo, Electrum, Mycelium…