ETHEREUM - What is Ethereum - What can we use it for?
Blockchain technology has become known through Bitcoin, but has many other options that derive from the digital currency frames. Bitcoin is not the only implementation that uses blockchain technology; new creative applications are exploited every day using the benefits of a blockchain.
Blockchain is for Bitcoin the same as the Internet for email. A great system for working on your applications, and digital currency is just one of them. Sally Davies, FT Technology Reporter
Prior to Ethereum, making blockchain applications requires a great deal of experience in programming, cryptography, mathematics ... At that time, many ideas for the use of blockchain technology were complex and often unbelievable. With the development of Ethereum, all these impossible applications saw the light of the day. Ethereum has allowed various ideas to be developed extremely quickly and efficiently using their blockchain.
What is Ethereum?
Ethereum is an open platform based on blockchain technology that allows developers to develop and publish decentralized applications.
Is Ethereum similar to Bitcoin?
The answer to this question can be both affirmative and negative. Same as Bitcoin, Ethereum is a publicly distributed blockchain network. Although there are some important differences in their technical performance, the biggest difference is in their purpose and capabilities. Bitcoin is one specific application that uses blockchain technology, a distributed electronic money system that enables payments and transfers using Bitcoin. While the Bitcoin blockchain network is used to control who owns how much electronic Bitcoin money, the Ethereum blockchain network is focused on running the code of any decentralized application.
In Ethereum's blockchain, instead of mining Bitcoin, miners are working to earn an Ether, a type of digital currency that served as a fuel for its blockchain network. Apart from being sold on a stock exchange, Ether is used in the Ethereum blockchain to pay for the fees and services used.
Bitcoin is the first and most popular digital currency; this is a special application of blockchain technology. Namely, this is just one of the possible applications. This situation has already occurred in the past, when email came to the internet, this was just one of the applications that popularized it, but there are many others. Dr Gavin Wood, Ethereum Co-Founder
How was Ethereum created?
Russian developer Vitalik Buterin created Ethereum in late 2013. Vitalik announced Ethereum in January 2014 at The North American Bitcoin Conference in Miami, USA.
Source: Ethereum.org
His creator Vitalik believed so much that blockchain technology could change the world that he had dropped out of the faculty to fully devote himself to developing Ethereum.
Ethereum was created to make things that were impossible with Bitcoin. The whole idea behind Ethereom is not just another cryptocurrency, but more than that, much more.
Smart contracts and what are they used for?
A smart contract is actually a concept used for a computer program that serves to facilitate exchanges such as money, content, property, shares, or something that represents some kind of exchange of value. When a smart contract runs on the blockchain network it becomes a computer program that runs independently when certain prerequisites are met. It is important to note that in the event that a computer program is executed on a blockchain it is not possible to make any changes such as censoring, malversation or interference of a third party, executed exactly as it was programmed.
All blockchain networks have the ability to execute a computer code, but most are limited in some way. Namely, Ethereum blockchain is different. Instead of allowing a limited set of operations, Ethereum was created with the idea that developers who will work on the platform will be allowed to use any operation. This means that developers can develop thousands of different applications that exceed the limits that have so far been in the use of blockchain technology.
Ethereum blockchain has many options, and smart deals are one of them. As his name suggests, a clever contract runs independently and manages itself. Don Tapscott
Ethereum virtual computer
Before creating Ethereum, blockchain applications were designed with only a few operations. Bitcoin was developed exclusively for the implementation of operations that are strictly necessary for the transfer of electronic money.
The programmers faced the problem. There were two options, one of which is to extend the source code from Bitcoin extended with the operations they need, but it was a long-lasting and complicated option. Another option was to develop a new blockchain as a separate platform. The developer group opted for this second approach, and Ethereum was created.
The main innovation of Ethereum is its virtual computer (EVM), which is crucial for running the complete computer program in the Ethereum network. This has enabled anyone to create any application and let it in the network. Ethereum virtual computer for the first time enabled the process of creating blockchain applications in a very simple and effective way. Before it was necessary to create the entire blockchain network for each application, Ethereum enabled this step to be avoided and any application could use its network.
What can Ethereum be used for?
Ethereum allows developers to develop and launch decentralized applications. The decentralized application represents only one application that serves for a specific purpose, and has a specific purpose for its users.
For example, Bitcoin is a decentralized application that allows users to use some version of electronic money and make money transactions through it. Decentralized applications are made from a source code that runs and executes on a blockchain network; it is not possible to control its behavior over a centralized entity.
Any centralized application or service can be decentralized with Ethereum. Credit withdrawal by the bank, registration of users in some kind of register, online voting, etc.
What are the benefits of decentralized applications?
- Integrity - the third party can not make any data changes
- Consensus - based applications are based on consensus principles and it is impossible to make censorship and decisions are made unanimously
- Security - Without a central node, which is usually narrowed and if it's unavailable, the entire application becomes unavailable, the applications are ultra-secure and can not be hacked
- They are always active - the application can never become inaccessible or outdated, no one can quench, and even the government
What are the disadvantages of decentralized applications?
Of course, not all are perfect and with the various advantages of decentralized applications are not perfect. Smart contract is the source code written by the developers, and they are as good as the programmer who wrote them. Errors in the source code made by the developer can cause actions that are executed, but they were not planned and thus not imagined. If there is a failure in an application that is later abused, there is no effective way to correct the default. The only way is that according to the principle of consensus, all involved in the network agree, and the source code is corrected. This directly contradicts the integrity that is ensured by the blockchain, and any such action violates the nature and basic principles of decentralization.
If Bitcoin is the king of the crypto world, then Ethereum is the queen
The value of Ethereum has experienced drastic growth over the past year, everyone is talking about Bitcoin, but Ethereum is on the heels. Last year you could buy Ethereum for $ 10, but now, you need to invest more than $ 700. Although Bitcoin has now become overwhelming for many, Ethereum has the potential to break through $ 1,000, and is still relatively affordable at present.
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Well, I used to be a huge HODLER of ETH but now I switched a great proportion to NEO. The reason was just because that I feel like there's more potential in NEO.
But Ethereum is definitely a great investment, I regretted a lot that I didn't go through all the detail about how it works and didn't HODL it long enough back like one year ago. I have huge faith in ETH's (and NEO's) dev team, you can see their passion for the revolution.
So I'm not worried about my investments at all, I'm pretty sure they are going to succeed in the long run.
I agree. They will, but the competitors as well.
You got the point haha, I think all crypto projects(well, most) are revolutionary, but we have limited cash so we still have to choose the most profitable one anyway, lol.
Ethereum is really a big game changer for the crypto currency arena. Every one is now building smart contacts to compete with ethereum. We just don't know where we are gonna end up.
End up being rich, maybe. LOL
You're correct.
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