Bitcoin turned heads when it was first introduced. It, however, had a limitation; it could not be used to build similar networks. Any similar network needed to be built required the owners to study the rudiments of blockchain technology. This was money, time and energy-intensive.
Then came Vitalik Buterin, a cryptocurrency researcher, and programmer who co-founded Ethereum. He noted that he settled for the name Ethereum, a product of the word “Ether” after surfing internet articles on elements and science fiction.
What Is Ethereum?
Ethereum in itself is a decentralized network that allows the running of code for any decentralized application that is deployed on its network. It is a do-it-yourself platform that allows the creation of a decentralized application, DAPP.
To create this DAPP one only has to learn Ethereum’s programming language. Once this is learned, that person can begin coding and build their decentralized programs. Once this program is built and deployed on the network, the computer will ensure it is executed as written.
The goal of Ethereum is to totally decentralize the internet because no activity takes place on the internet that web giants are not privy to.
How Ethereum works
Ethereum’s coding language is the solidity. This is the programming language used to allow the creation of DAPPS and the smart contracts needed for them. Ethereum developers write the conditions for these DAPPS and the network executes these.
Smart contracts, in this case, is a phrase used to describe Ethereum applications that can facilitate the exchange of money, content, shares and/or anything of value from person to person.
These smart contracts are so-called because they deal with all the aspects of the contract; enforcement, management, performance and more.
Some of the features of smart contracts include:
- It executes all rules given to it to the latter
- It can neither be edited nor corrected; not even by its author
- It makes no exceptions for extreme cases or anyone
Types of Ethereum
Ethereum launched with the idea that “code is law”, which inferred that a contract on the network cannot be overruled. This held true, but only until the Decentralized Autonomous Organisation, DAO, event happened.
DAO allowed users to deposit money and get returns made on the investments of DAO. DAO went on to raise $150 million in ether. The code was, however, not foolproof and someone figured out how to drain DAO of the money.
The Ethereum community then decided that code is no longer law and modified their rules. The minority that did not agree to this change remained with the original blockchain before its protocol became altered.
This gave rise to Ethereum Classic, the “old” one and Ethereum, the “the revised” one.
How Ethereum’s Ether Works
Ether is the currency used by people on the Ethereum network to pay for the deployment of smart contracts. This payment is made using Ether. Initially, one ether costs $0.40 but due to the growing popularity of Ethereum, the cost of a single Ether has changed.
To Wrap It Up
Ethereum takes the entire idea of digital currency to another level. Now, from the Ethereum blockchain, other platforms can be built. It’s truly an amazing development.