Tag: Ethereum

Blockchain is a revolutionary but relatively new technology. All blockchain and crypto-related concepts are unique and challenging to understand. I recently came upon the term Ethereum and wondered what it was all about. I mean, I keep hearing about it, I know it’s tied to the Blockchain, and it’s the second-largest cryptocurrency in the world, but I can’t seem to wrap my head around it. If you want to learn everything about Ethereum but are weary of explanations that sound like total technical jargon, you’ve come to the perfect spot. Ok, before we get into Ethereum, we need to do a quick recap about Blockchain since it’s the basis on which Ethereum was born.

Blockchain Technology

You must be somehow familiar with the concept of Blockchain by now. Suppose you still have some questions about what that means or how it works. In that case, you might consider revisiting our blog dedicated to Blockchain, “What is blockchain technology and how does it work” The fascinating thing about Blockchain technology is that it is a by-product of the invention of Bitcoin. Blockchain technology was developed by combining previously existing technologies such as cryptography, proof of work, and decentralized network design to create a system that can make decisions without needing a central authority. Before Bitcoin was invented, blockchain technology wasn’t introduced. However, after Bitcoin became a reality, people began to notice how and why it worked, and this “thing” was given the title of blockchain technology. You can say that Blockchain is to Bitcoin what the Internet is to email: a platform on which apps and programmes can be built. One of the choices is to use a cryptocurrency like Bitcoin. As a result, people were ecstatic, and they began to wonder what else we could decentralize. However, for a system to be genuinely decentralized, it must be administered by a massive network of computers. The only network that existed at the time was Bitcoin, and it was somewhat limited. Bitcoin is written in a vague language, which means it can only understand a limited set of commands, such as who sent how much money to whom. You’ll need a different programming language if you wish to build a more complicated system.

What Is Ethereum Blockchain?

Here comes our concept of Ethereum. It was first proposed in late 2013 and then implemented in 2014 by Vitalik Buterin, the co-founder of Bitcoin Magazine. Ethereum is, in ordinary language, a Do It Yourself (DIY) platform for decentralized programming, commonly known as DApps. All you have to do is study the Ethereum programming language Solidity and start writing if you want to construct a decentralized application that no single person controls, including you, even though you wrote it. The Ethereum platform is decentralized, as thousands of independent computers run it. When a programme is uploaded to the Ethereum network, these computers, also known as nodes, ensure that it runs correctly. Ethereum is the platform on which DApps are built all over the world. It is a platform, not a currency. People often confuse it with currency. Ether is the currency, not Ethereum that is used to incentivize the network. Ethereum goal is to make the Internet genuinely decentralized. Now you must be wondering if the Internet is centralized. Because I, too, thought the Internet already was decentralized and that anyone could start their site. However, you should be aware that nearly no online activity occurs without the involvement of a third party or middleman. However, as Bitcoin established the principle of digital decentralization, a whole new world of possibilities opened up. Finally, we can begin to conceptualize and create an Internet that links users directly without the involvement of a centralized third party. For example, instead of utilizing third-party applications like Amazon, you can buy your favourite top straight from a person, or drivers can provide their services directly to passengers, bypassing “Uber.” The basic concept of Ethereum is to allow people to connect directly with each other without the need for authority at the centre to take care of things. One can deduce. It’s a massive network of computers that work together, combining into one powerful, decentralized supercomputer.

How It Works

Ok, so I hope by now you are entirely familiar with what Ethereum is and what it does, so let’s move on to how it does. Solidity, Ethereum scripting language, is used to create “Smart Contracts,” the logic that operates DApps. In reality, a contract is nothing more than a series of “Ifs” and “Then.” A combination of circumstances and activities. For example, if I pay $500 to my landlord on the first of the month, he will let me use my flat. On Ethereum, smart contracts work in the same way. Ethereum programmers write the conditions for their programme or DApps, subsequently executed by the Ethereum network. Intelligent contracts are so-called because they handle all parts of a contract, including enforcement, management, performance, and payment. However, smart contracts also have their downsides. Smart contracts are not very smart. For example, if we are not going right on terms of it can lock us out within no time. Other elements, such as extenuating circumstances, the spirit in which the contract was drafted, and the ability to create exceptions if merited, would be considered by a brilliant contract. In other words, it would function as an excellent judge. A “smart contract”, on the other hand, is not intelligent at all. It’s genuinely letter-strengthening strict. It must adhere to the laws of the letter and cannot consider any other considerations or the “spirit” of the law, as is typical in real-world contracts. Like once a smart contract is deployed on the network, it cannot be modified or corrected, not even by the author. It is unchangeable. The only way to amend this contract would be to persuade the whole Ethereum network that a change is necessary, which is impossible. This is a significant difficulty since, unlike Bitcoin, Ethereum was designed to generate complex contracts, and complex contracts are difficult to secure. The more complex a contract is, the more difficult it is to enforce since there is more opportunity for interpretation or more terms must be drafted to deal with contingencies.

Ethereum as Currency

Ethereum is more hyped up as currency than technology; therefore, I will clear some concepts here about it. We’ve already established that Ethereum is essentially a big group of computers working as a single supercomputer to run code that powers DApps. However, getting the machines, powering them up, storing them, and cooling them if necessary all cost money. Ether was created for this purpose. When people talk about the currency Ethereum or the price of Ethereum, they’re talking about Ether, the cryptocurrency that encourages individuals to run the Ethereum protocol on their computers. This is quite similar to how Bitcoin miners are compensated for keeping the Bitcoin network up to date. The author of a smart contract must pay to get it deployed on the Ethereum platform. Ethereum is used to make the payment. Ether was initially distributed in 2014 as part of Ethereum first coin offering. A single Ether cost roughly 40 cents back then. Since the ICO craze began in 2017, the use of the Ethereum network has skyrocketed, and one Ether is now worth hundreds of dollars.