If you want to know what is Etherum, then you are in the right place. I am going to tell you in detail about what Ethereum is, and how does it work. There will be also the pros and cons of Ethereum.
As I discussed in my previous articles about them with complete guide. That bitcoin was created in 2008 by Satoshi Nakamoto. But no one knows who he is and the interesting thing about bitcoin is that it is decentralized and nobody owns it. There is no COE, CMO, CTO, etc. In it. They are all developers who are working from around the world. So, if you don’t know about them, then start off by reading them.
The question that might come up in your mind that what Etherum is and what is the reason behind the existence of Ethereum. Don’t worry, I will explain each and everything in detail down below.
You must be aware of the fact that our data are stored on other peoples’ computers. Clouds and servers are owned by Amazon, Google, Facebook, etc. Even this single tiny article is stored on some cloud.
As we all know that our data on the internet is not safe. There are different authorities who can access our data at any time and they can get our personal data, financial and passwords. The hacker and the government can access your data at any time and can modify it. In short word, they can change or leak and steal your data anytime.
People from diverts platforms come outside and said that the internet was meant to be decentralized. That’s why blockchain technology emerged to achieve the goal of making the digital world decentralized.
And Ethereum is the newest technology to join this trend.
What is Etherum?
- Etherum is an open software program based on blockchain technology. It allows developers to develop and extend decentralized applications.
Is Etherum is related to Bitcoin?
No, they are not similar much, but kind of similar in different ways. I will discuss them with you in detail.
- Ethereum is a public blockchain network like Bitcoin.
- Their purpose and capability of doing work are different.
- Etherum is focused on running the programming code of any decentralized application, but bitcoin focuses on only one application.
- The bitcoin blockchain is used to trace the ownership of bitcoin. While Etherum focuses on running the program code.
- There are real people who are working behind this cryptocurrency
- It is based on smart contracts
What are smart contracts?
Smart contracts are a digital code well some people call it only code. It is also called “Digital Triggers”. You can implement them online to execute a certain task that you need. Let me explain it with an example.
Virtual vending machine
I put an escrow and add some of certain rules in escrow. Meaning, when certain people will register their five votes into escrow automatically. And then automatically that escrow will open up and send five people this cryptocurrency ether.
Or maybe some of you will understand with this simple example.
It is the same as a vending machine where you will put a dollar then press a code and that code will execute a trigger. And that triggers in all spin on a different candy bar for you and you will get the one you pressed code for.
Smart contracts are based on rules and laws. And it is just a computer code that can help you in exchange money, share, content, and property, etc. A smart contract is a self-operating computer program that runs when it meets specific conditions. It runs on the blockchain as they programs without the interpretation of any third party. While blocking programmed have the ability to process code but in very restricted manners.
But Ehterum is totally different, they allow developers to build operations they want. That means a developer can build different applications.
In the Etherum blockchain miner works to earn Ether. Ether is a type of crypto token.
Notes: Okay let me clear you what Ether is and it is the currency that is used to buying services in Etherum. And Ether is a digital currency that is used for trading.
There is also a one more token too, that is used to pay miners fees to include transactions in their block. And it is called Gas.
History of Etherum
Etherum has a controversial and significant history. Etherum was founded by the taluk butyrin and got released in 2015. It is becoming better to know cryptocurrency outside Bitocin. It has a completely different blockchain protocol.
Recognized for sorting all the computer programs. The purpose behind creating Ethereum was to take advantage of the potential provided by blockchain technology.
What Ethereum can be used for?
It allows developers to build and extend decentralized applications. Dapp or Decentralized app serves a different purpose to its users.
For example, bitcoin is a Dapp that provides its users a peer-to-peer digital cash system and that enables a bitcoin online system.
A decentralized application is one that runs on the blockchain network, and it is not controlled by any single person or central hub or entity.
Through Ethereum any service that is centralized can be decentralized, for example, voting system, loan provided, etc.
Etherenum can also build Decentralized Autonomous Organizations (DAO). DAO is fully decentralized without any leader. It runs on programming code and on a collection of the smart contract written on the Etherum Blockchain. It can be own by anyone who buys its token. But instead of each token equalizing to equality shares and ownership. This token acts as contributing and that contribution give different people voting rights.
It is also used as a platform to launch other cryptocurrencies. Lately, Ethreum has created a new standard to track unique digital assets. Different games are developed recently using this technology like overnight hit crypto-kitties.
Advantages of Etherum
Here is the main advantage of Ethereum that will develop your more interest in it.
- A third party can’t change its data
- All the applications, organizations or projects that are running under Etherum cannot be turned off.
- The security in Ethereum is super strong because of the PoW consensus and cryptographic techniques that are used in the transaction model. The central point network is so strong that protects the model from hacking and manipulations.
- Because of Pow consensus censorship is unfeasible.
Disadvantages of Etherum
- There is nothing in this world that does not have any disadvantages. Everything comes with its own advantage and disadvantages and that makes it more attractive and grab peoples’ attention.
- Here is the disadvantage of Etherum:
- It is capable of being attacked by hackers. That can be used through the complexity of the basic programming language used in smart contracts, Solidity.
- The Ethereum main focus is on decentralization and security over Scalability.
But still, there are few major differences between bitcoin mining and Etherum mining. In Ethereum mining blockchain is not only stored the transaction list of the blockchain but also note down the most recent state of the network.
- Use Patrica Trees rather than Merkel Trees in its blockchain regulations that enable Ethereum to efficiently store.
- The block time is 12 seconds.
- Miner paid for gas expended in blocks.
- The reward of the static block is 3 ETH.
- The Ethash Mining Algorithm (Uses DAG).
- There is an extra reward for including Uncles as blocks.
If you are in a hurry and don’t have much to read all the article. You want to know the answers to the questions. Then read them below, there are few important short questions about Ethereum is available for you.
- What is Etherum? A Blockchain application platform.
- What is Ether? It is the fuel of the Ethereum network.
- How to use Ethereum? By dapps, wallet, and trading.
- Who created Ethereum? Vitalik Buterin.
- How Ether Works? It is work by turning complete programming, EVM and State
- How Etherum Mining Works? It works by “Proof of stake” and “Proof of work”.
- How to Mine Ethereum? By pooling and mining software and GPUs.
- How do Ethereum smart contracts work? It worked with gas, transaction, and fees.
So now you have a clear idea of what is Etherum unless you don’t, then read this conclusion with full concentration. It will help you in understanding different things.
As you all know Ethereum is one of the most popular platforms in cryptocurrency and the blockchain world today. Looks like Ethereum is going to stay for a long time in the decentralized application.
It is helping us in changing the way of the usage of the internet. So let us know if you have any questions related to this article.
I will love to answer all your questions. And tell us what is your favorite cryptocurrency so I will cover that cryptocurrency in my next post.