Ethereum is one of the most important and well-known names in the world of cryptocurrencies. In 2015, Ethereum quickly became the second biggest cryptocurrency by market capitalization, right behind Bitcoin. But Ethereum is more than just a digital currency; it is also a platform for building decentralized apps that use blockchain technology.
You’ve come to the right place if you’re new to the world of cryptocurrencies and want to know what Ethereum is all about. In this blog, we’ll talk about Ethereum’s pros and cons, its past, and what it might mean for the future of money and technology.
What is Ethereum?
Ethereum is a giant, decentralized supercomputer that uses blockchain technology. Some crucial developments distinguish Ethereum as a one-of-a-kind project containing all the building blocks required to establish a new, better, more secure, privacy, and trust-oriented internet.
What is an exciting factor in Ethereum?
Let’s start with the truth that it is “decentralized.” A network of computers or nodes runs this global computer, whereas nodes are dispersed worldwide (more specifically, it runs on a blockchain).
This situation means that no one can unplug and halt its operations. Anyone who wishes to run a network node from any computer connected to the internet can do so without seeking permission. Furthermore, because it is decentralized, it cannot be readily hacked because there is no single point of failure.
Who controls it?
So, who is in charge of Ethereum? The answer is no one owns it. No single entity governs it; instead, a community of software engineers administers who write code and run network nodes on their computers.
Ethereum is a genuinely decentralized project constructed by crowdsourcing the work of many experienced computer programmers. The Ethereum Foundation, a non-profit organization, aiming to build a more globally accessible, free, and trustworthy Internet, coordinates efforts to improve Ethereum technology.
It is an open project, and anyone can utilize this worldwide computer. Many people can use it as they choose, and anyone can read the code that the computer is executing or create new code that the computer will be able to achieve.
This feature means you can run your programs on it and use applications created by others. The Ethereum code is open source, and users can access it at github.com/ethereum.
Users can communicate with one another without the usage of an intermediary, eliminating the need for a third party. When you elect to interact with a third-party application built on Ethereum, you may read the code directly to ensure that the program performs what it says. No middlemen, no surprises.
The Ethereum Code is irrevocable. Transactions, data kept, and programs written are all permanent. They cannot be modified once deployed on the global computer.
This feature means that not only can you verify the code of any program and understand what it does, but you can also be confident that no one will be able to change it once you’ve validated it. The code that is already in use cannot be updated.
This computer’s interactions are exceedingly secure. All transaction with the computer (whether it is deploying new code, engaging with current apps, or transferring value) is cryptographically signed, which means they cannot be altered or copied.
You preserve your worth because you own your data. On Ethereum, users can choose which data to give and keep, giving them complete control over who can use their data and for what purposes. Users will also be able to keep (and profit from) any value their data may generate, similar to all the data they post on Facebook or Twitter, which is a goldmine for advertising.
What are Ethereum use cases?
Ethereum aspires to provide a platform on which anybody can build value and data exchange apps. Ethereum-based programs use smart contracts for building Dapps to carry out financial and informational transactions.
Let us take an example.
Imagine Mr.X has installed a solar system on his roof, and Mr. Y, his neighbour, wants to use it to charge his home appliances. But, the billed amount is much less, and they don’t want to transfer money in every instance.
For a smooth and seamless payment, they can write a smart contract on Ethereum to check the energy used and multiply it with charges for electricity at per market prevailing rate. It will transfer the amount automatically to Mr. X’s account from Mr. Y’s account without the involvement of third-party or extra charges.
Following are the widespread applications of Ethereum.
Identity Management
Each user on the Ethereum network digitally signs all of their interactions with smart contracts or other users, and identity can be associated with a user. User's all actions are linked to their identity. Peer Mountain and Hu-manity are two blockchain-based identity management projects.
Transparency and Trust
Smart contracts can take the place of (and be used to enforce) contracts between parties whenever an agreement utilizes the programming language. Smart contracts ensure transparency. For example, suppose you want to donate to a non-profit organization but want to ensure that the money is used to assist clean water initiatives in Africa. On Ethereum, you can create an application that tracks the real-time usage of your money.
Governance
Ethereum is an excellent platform for handling large-scale voting systems. As each user on the Ethereum ecosystem can connect and interact securely, this system helps construct voting systems for corporate governance, elections, decision-making, and consensus agreements.
Copyright/Ownership Repository
Ethereum blockchain permanently stores the data in a transaction sent across the Ethereum network. They are unchangeable, carry a time stamp indicating data when they were added, and cannot be withdrawn. For these reasons, you can register your intellectual property (IP) or the copyright for a song or book on the Ethereum blockchain with the confidence that no one can delete it and that you can always substantiate that you are the author or owner of such a work.
How to Use Ethereum Network?
The first step in using Ethereum is to create your own Ethereum wallet and purchase some Ether (ETH) to conduct your foremost transactions.
You can do so through exchanges such as Coinbase. After completing your wallet, you can use Ethereum applications and move ether between accounts.
In the following blog post, we will see how Ethereum works. For more interesting stories, follow us on LinkedIn.
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