What is Ethereum?
Ethereum is an open source platform that allows developers to build applications that can be run on a blockchain. Launching in July 2015, it has since grown to become the blockchain of choice for thousands of developers around the world. The Ethereum blockchain is public and decentralized. No person or company owns or controls Ethereum. Anyone can write and deploy computer code onto its blockchain.
What is a blockchain?
A blockchain is essentially a peer to peer decentralized ledger that is append only. In other words, it’s like a ledger that volunteers from all over the world each have a copy of. There is no central authority responsible for the ledger. When an entry is added to that ledger, all copies of that ledger are updated throughout the network. You can’t go back and change a previous entry on the ledger. Once the network agrees that an entry is valid, then that entry stays on the ledger forever.
Who owns Ethereum?
No one owns Ethereum. The Ethereum project is open source, anyone can contribute to the project. The nodes on the Ethereum blockchain are run by volunteers from all over the world. In 2014 the Ethereum Foundation was setup in Switzerland as a non-profit organization. The foundation’s mission is to support the development of Ethereum and the Ethereum ecosystem.
Who created Ethereum?
The idea of a generalized blockchain platform, that would allow developers to write applications on it, was first conceived by Canadian programmer Vitalik Buterin in 2013. The first technical specification for Ethereum was released in April 2014 by Ethereum cofounder Gavin Wood. The project was crowd funded in August 2014 and the network went live in July 2015.
What is Ether?
To interact with a smart contract or send a transaction on the Ethereum blockchain, users need to pay a small fee. Ether is the name of the token used to pay this fee. In technical terms, this fee is called “Gas” and it’s paid in Ether. Gas ensures that the network isn’t spammed by developers and that nodes on the network are properly compensated for executing application code.
What makes Ethereum different from other Blockchains?
One of the key innovations of Ethereum is the Ethereum Virtual Machine (EVM). The EVM is basically software that is baked into the Ethereum protocol. Every node on the Ethereum network runs its own copy of the EVM. The EVM is what allows developers to execute code on the Ethereum blockchain securely and efficiently.
What are Smart Contracts?
Smart contracts are self executing pieces of computer code that are run on a blockchain. Ethereum is essentially a platform that allows anyone to write and deploy smart contracts. Because the code is run on a public blockchain, smart contracts are immune to censorship, fraud, tampering or interference from a 3rd party. They are executed exactly as programmed.
What are Dapps?
Apps that use the Ethereum blockchain as a “backend” are often called decentralized apps (or Dapps for short). Traditional apps have single points of failure because they run on centralized servers. Dapps have a backend with no single point of failure because they use a decentralized blockchain for there “backend” functions. The term Dapp isn’t specific to Ethereum, but since Ethereum is the most popular blockchain amongst developers, most Dapps are built using Ethereum.
What are the benefits of Ethereum?
- Trust – Since an application’s code is executed on a large public blockchain, user’s can be assured that the code hasn’t been tampered with. The immutability of a blockchain guarantees that what is written onto the blockchain hasn’t been modified by anyone.
- Secure – Because blockchains are immutable and decentralized they have no single point of failure. Applications that run on Ethereum have no central server. Therefore, they have no central point of failure.
- Censorship resistant – The decentralized nature of the Ethereum blockchain provides an environment where applications can run without any concern of being censored. There is no central organization behind Ethereum. There is no central location where Ethereum operates from. Applications and smart contracts on Ethereum can run without interference and censorship from governments and corporations.
What’s the difference between Bitcoin and Ethereum?
Both Bitcoin and Ethereum are decentralized public blockchains. Blockchains don’t just appear out of thin air. They first need to be programmed to do something. You can think of Bitcoin as a blockchain that’s programmed to allow for digital money. You can think of Ethereum as a blockchain that’s programmed to allow other programs to be built on top of it. Ethereum is more like a blank canvas. Any application can be created on it. Bitcoin already has a painted canvas. Bitcoin’s application is money. Bitcoin is like digital gold, Ethereum is like digital oil.
What does the future hold for Ethereum?
Ethereum sees itself as a “world computer”. It’s a computer that anyone in the world can access yet no one controls. Anyone can write applications onto this “world computer” and anyone can access the applications on it.
Ethereum is still in an experimental phase but the early potential it has shown is promising. The current internet is heavily centralized. A small handful of companies control most of the internet. Ethereum wants to redefine this balance. It wants to become the standard protocol that powers Web 3.0, the decentralized web.