How do I exchange Ethereum for another cryptocurrency, like Ripple and Litecoin, from India?

Ethereum works as a digital platform which adopts the blockchain technology established by bitcoin, and expands its use to accommodate a wide variety of other applications. It is not to be confused with ether – the cryptocurrency underpinning the network – which is often referred to as ethereum.

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How does ether work?

Ether, like other cryptocurrencies, uses a shared digital ledger where all ether transactions are recorded. It is publically accessible, fully transparent and very difficult to alter retroactively.

This is known as the blockchain, and it is created through the process of mining.

Miners are responsible for verifying clusters of ether transactions to form ‘blocks’, and securing them cryptographically by solving complex algorithms. New blocks are then linked to the chain of previous blocks, and the miner in question earns themselves a ‘block reward’ – that is, a set number of ether tokens

What about Ethereum?

The Ethereum blockchain is very similar to that of bitcoin, but its programming language enables developers to write software through which blockchain transactions manage and automate specific outcomes. This software is known as a smart contract.

If a traditional contract outlines the terms of a relationship, a smart contract ensures those terms are fulfilled by writing them in code. It is software that automatically executes the agreement as soon as predefined conditions are met, eliminating the delay and expense involved in completing a deal manually.

To take a simple example, an Ethereum user could create a smart contract to send a certain amount of ether to a friend on a certain date. They would write this code into the blockchain, and as soon as the contract is complete – that is, the agreed date arrives – the ether would automatically be released to the other party.

What moves ether’s price?

Ethereum is less exposed to many of the economic and political factors which affect traditional currencies, but its value is influenced by a host of unique dynamics:

Market manipulation

A lack of regulation means traders may be able to influence the market by buying and selling in significant quantities.

Availability

Unlike bitcoin, there is no limit on the supply of ether. Even so, many ether units will continue to be added and lost over time, causing its availability to fluctuate.

Wider acceptance

The ether ecosystem is constantly changing as adoption of the cryptocurrency grows, both among independent investors and those in industry.

Government regulation

Governments are still adapting to cryptocurrencies, with considerations for supervision mechanisms and other new guidelines.

Media coverage

Negative press, particularly surrounding security lapses and hacks, can impact public perception of ether’s value.