Exploring Ethereum: Revolutionizing the World through Decentralization

Innovations in Blockchain technology led to the development of a new platform called Ethereum. Like Bitcoin, Ethereum is also a distributed network. Rightly termed as Blockchain 2.0, it paved a path for developers to contribute to the blockchain community. This blog on ” What is Ethereum ” will enrich your knowledge on Ethereum.

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.

Although 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

Both Bitcoin and Ethereum are often compared to each other, but, the two were designed with different vision and goals. Bitcoin is an established cryptocurrency used for trading, Ethereum is a multipurpose platform with its digital currency as the fuel for smart contracts functionality.

But what is Ethereum and what future does it hold for our society, here’s a run-through.

What Is Ethereum?

Ethereum icon-what is ethereum-edureka

Ethereum is an open-source & public blockchain based distributed computing platform for building decentralized applications. 

So, Before the creation of Ethereum, blockchain applications were designed to do a very limited set of operations. Bitcoin and other cryptocurrencies, for example, were developed exclusively to operate as peer-to-peer digital currencies.

Vitalik Buterin envisioned Ethereum as 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”.

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It can basically create a programmable contract directly between peers.

Smart Contracts

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A contract that self-executes, and handles the enforcement, the management, performance, & payment.

Simply put, it can be defined as a contract that self-executes, and handles the enforcement, the management, performance, & payment.

what is ethereum-ether icon-edureka

You would require tokens for executing a smart contract as well as for trading. So basically, Ethereum is incomplete without cryptocurrency. 

Ethereum Cryptocurrency

Ethereum runs on its native token called which serves two main purposes:

  1. Ether payment is required for applications to perform any operation so that broken and malicious programs are kept under control
  2. Ether is rewarded as an incentive to the miners who contribute to the Ethereum network with their resources- much like bitcoin’s structure.

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.

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                                   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

It actually handles the internal state and computation in Ethereum. Practically, EVM can be thought of as a large decentralized computer with millions of objects called “accounts” which have the ability to maintain an internal database, execute code and also they can talk to each other.

With EVM at its heart, Ethereum enables the development of potentially thousands of unstoppable applications.

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Wondering what can be built on Ethereum? Well, Ethereum can be used to build some really cool applications called DApps.

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Decentralized Applications (DApps)

  • DApps are computer applications that operate over a blockchain enabling direct interaction between end users and providers
  • It can be comprised of single DAO or even a series of DAO that work together to create an application

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.

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Ethereum also allows the user to build decentralized organizations.

Decentralized Autonomous Organization (DAO)

  • DAO are organizations that exist entirely on a blockchain and are governed by its protocols
  • It is designed to hold onto assets and use a kind of voting system to manage their distribution

What is Being Built on Ethereum?

As Ethereum and other projects have made writing DApps protocols quicker and more accessible, a number of possibly disruptive DApps have appeared.

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What Will Ethereum be Used For?

Decentralizing Existing Services:  Existing services can be decentralized using Ethereum. This will lead to reduced cost and fees by connecting individuals directly and removing intermediaries.

A Million Possibilities: Dapps can disrupt hundreds of established industries like:

  1. finance
  2. real estate
  3. insurance

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.

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This brings us to the end of ” What Is Ethereum ” blog. Hope it was helpful and informative.

If you wish to learn Ethereum and build a career in Blockchain Technologies, then check out our Blockchain Course which comes with instructor-led live training and real-life project experience. This training will help you understand What is Ethereum Blockchain in depth and help you achieve mastery over the subject.

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