There are various steps to understand the working of Ethereum Blockchain. We will discuss the complete workflow of using Ethereum Blockchain here. The different steps of using Ethrerum Blockchain are:
Get an Ethereum wallet:
The first step for using Ethereum Blockchain is to securely store the ‘ether’. For that, you would require an Ethereum wallet. There are various kinds of ethereum wallets present in the market. You can choose a particular type of card on the basis of security and convenience. However, the above two criteria are inversely proportional. More is security, less is convenience. There are different kinds of wallets such as desktop wallet, mobile wallet, hardware wallet, and paper wallets. Desktop wallets use the PC or laptop platform to run. Mobile wallets run on smart mobile devices. Hardware wallets are very small in size but very effective in functionalities. They are preferred as the best and most secured wallets. Another option is the paper wallet where you can print/handwrite private key on a paper. There are various online tools dedicated to it.
You must have some backup of your private keys. In case you lose, you must alternative options.
Once you have the wallet for storing the ether, the next option is to buy ‘ether’. The process of buying ether varies from country to country. There are various ways to buy ‘ether’. One option is to exchange ethereum from your normal currency. There are various exchanges which allow you to buy ethereum from the money you have in your bank account. Alternatively, you can also buy ether using another famous cryptocurrency, bitcoin. Some exchanges also allow this. The last option is to contact a user who has ether and want to sell it. In the mentioned way, you can buy ethereum.
Create/connect to smart contracts:
Above two steps were similar to the bitcoin working, but this step is completely different. Once you have ether, you can join smart contracts. Alternatively, you can also create smart contracts. There are numerous smart contracts that could be used to create decentralized applications.
Almost all the cryptocurrencies generate some identification numbers which are used to point out the destination of the debt fund. There are two components in the identification process of Ethereum Blockchain. One is called the public key and other is called the private key. These keys are represented by strings. You can use the public key to send ethereum to others. This allows the people to identify that you are the source of that particular fund transfer. The private key is used for authentication in the transaction. While spending the ether, you need to sign it with this key. It is similar to ATM credential pin of your debit card.
The advantage of this working system is that you can generate these keys at your home, you don’t need to go to banks for these.