What Is Ethereum? A Platform To Decentralize The World
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Innovations in blockchain technology led to the development of a new platform called Ethereum. Like Bitcoins, Ethereum is also a distributed network. Rightfully termed as Blockchain 2.0, it paved a path for developers to contribute to the blockchain community. This blog on “What Is Ethereum” will essentially provide you with all the fundamental knowledge on Ethereum.
Learnings of this blog
- What Is Ethereum?
- Smart Contracts
- Ethereum Cryptocurrency
- Ethereum Virtual Machine (E.V.M.)
- Decentralized Autonomous Organization (DAO)
- Decentralized Applications (DApps)
- Solidity for Smart Contracts
- Future of DApps
Ethereum is the second major innovation in Blockchain since the invention of Bitcoin.
While Bitcoin can be described as a digital money.
Ethereum is a decentralized platform for programming a digital money.
What is Ethereum | Smart Contracts and Ethereum Explained | Edureka
Before I tell you ” What Is Ethereum ” it is important for you to know the difference between Bitcoin & Ethereum
While both Bitcoin and Ethereum are powered by the distributed ledgers, the two differ in many technical ways, let me help you in comprehending the differences between the two.
Bitcoin vs Ethereum
|Concept||Digital Money||World Computer|
|Founder||Satoshi Nakamoto(Mysterious)||Vitalik Buterin & Team|
|Scripting Language||Turing Incomplete||Turing Complete|
|Release Date||Jan 2009||July 2015|
|Coin Release Method||Early Mining||Through ICO|
|Average Block Time||~10 minutes||~12-15 seconds|
|Purpose||Alternative to Regular Money||Peer to peer Contracts|
Having compared two of the most popular blockchain applications, you can conclude that both were designed to serve different purposes. Now, let’s get started with Ethereum.
What Is Ethereum?
Ethereum is a distributed public blockchain network that allows the development of smart contracts for blockchain and decentralized applications.
Vitalik Buterin conceptualized Ethereum with a vision to decentralize the world. His goal was to build a platform for developers to write programs on the blockchain. To accomplish his goal he used similar Blockchain designs & protocols as that of Bitcoin’s and improvised it to support applications beyond currency issuance.
Anyone across the globe can connect with Ethereum blockchain to develop a program and can maintain the current state of the network, hence the term “World Computer”.
A contract that self-executes, and handles the enforcement, the management, performance, & payment.
It is just a computer code that facilitates a transfer of digital assets.(like money, content, property, shares, or anything of value)
You would require tokens for executing a smart contract as well as for trading. So basically, Ethereum is incomplete without cryptocurrency.
The value token of the Ethereum blockchain is called Ether.
In addition to operating as a digital currency or payments, Ether is also used by application developers to pay for transaction fees and services on the Ethereum network. Hence it serves a fuel for triggering events or operations on Ethereum network.
Like Bitcoin uses network servicing protocol where miners work for Bitcoins, in Ethereum protocol, the miners work for Ether. For every successful work done (mining) the miners are entitled to get 5 Ethers.
Every time a contract is executed, Ethereum consumes token which is termed as ‘gas’ to run the computations.
Gas in Ethereum
Gas is required to be paid for every operation performed on the Ethereum blockchain.
Its price is expressed in ether and it’s decided by the miners, which can refuse to process the transaction with less than a certain gas price.
Ether buys Gas to fuel up the E.V.M.
Ethereum Virtual Machine (E.V.M.)
- The Ethereum virtual machine is the engine in which transaction code gets executed
- E.V.M. enables the development of potentially thousands of different applications all on one platform
- Contracts written in a smart contract-specific programming language are compiled into ‘bytecode’, which an EVM can read and execute
Well, Ethereum can be used to build some really cool applications called DApps and DAO.
Decentralized Autonomous Organization (DAO)
- DAO are organizations that exist entirely on a blockchain and are governed by its protocols
- A unison of many long-term smart contracts between many people
- DAO is designed to hold onto assets and use a kind of voting system to manage their distribution
Example of a DAO
Decentralized Applications (DApps)
- DApps are computer applications that operate over a blockchain enabling direct interaction between end users and providers
- Dapps can be comprised of single DAO or even a series of DAO that work together to create an application
- In the DAO, each action or vote is represented by some form of transaction in the blockchain
Example of a DApp
A user may need to exchange Ether as a way to settle a contract with another user, using the network’s distributed computer nodes as a way to facilitate the distribution of this data.
Solidity for Smart Contracts
Since EVM converts the programming codes into byte for execution, it supports various Object-Oriented Programming languages like Solidity, Vyper, Serpent, where Solidity being the most popular programming language for developing smart contracts.
Remix IDE for developing Smart Contracts
As Ethereum and other projects have made writing DApps protocols quicker and more accessible, a number of possibly disruptive DApps have appeared.
Future of DApps
KYC-Chain allows users to maintain private identity wallet which can be used to authenticate their identification in finance, legal, or commerce settings
WeiFund uses smart contracts to enhance crowdfunding services including GoFundMe and Kickstarter
Storj provides censorship-free, secure, and zero-downtime distributed cloud storage by sharing data and storing it among a decentralized network of computers
These are just a few examples of DApps built on Ethereum platform. DApps will probably disrupt some of the major industries like finance, real estate, insurance, healthcare and the public sector to name a few.
Considering the trends and advancements in the technology, it’s safer to say that the prospects of Ethereum as a platform seems pretty bright. As the industry and developers continue to invest their resources, faith and time in the technology, blockchain community will continue to prosper.
This brings us to the end of “What Is Ethereum” blog. Hope it was helpful and informative.
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