If you are amazed with the bitcoin owners , who have earned so much money by investing at the right time, then you must be curious to know about other options of crypto-currencies. Today this article will enlighten you about ethereum.
What is Ethereum?
Ethereum is related to bitcoin which is not actually true. There are multiple currencies in the world which are like bitcoin. It is just a drop in the ocean. Yes bitcoin uses blockchain application, but so do many cryptos.
“[Blockchain] is to Bitcoin, what the internet is to email. A big electronic system, on top of which you can build applications. Currency is just one.” Sally Davies, FT Technology Reporter
Building Blockchain applications requires complex background in coding , cryptography & mathematics. There was a time all these applications took huge time in making all these. But due to so many available tools in decentralized applications, Ethereum has become a popular crypto these days.
What is Ethereum for beginners?
Ethereum is an open source software which is based on blockchain which let developers to build & implement decentralized applications.
Ethereum is a distributed public blockchain network. Bitcoin & ethereum are similar in some ways, but there are many differences too.
- Bitcoin Blockchain is a peer to peer electronic cash system that enables online Bitcoin payments , while Ethereum blockchain works to earn ether (crypto token) that is fuel for the network.
- Bitcoin blockchain is used to track ownership of bitcoins while Ethereum blockchain focus to run the code of any decentralized application.
What is a smart contract?
Smart contract is a term used to describe computer code that helps to exchange money, content property, shares or anything. In the running phase of blockchain , smart contract acts as a computer program that runs when the given conditions arrives.
As you should know smart contracts runs on blockchain, it runs as they are programmed without any risk of censorship, downtime, fraud or third party interference.
All blockchains can process code , but limited. In case of Ethereum, it allows developers to create whatever operations they like to do. Developers can create many applications that goes beyond imagination.
The Ethereum Virtual Machine
Before Ethereum , blockchain applications were designed for less operations. This is because bitcoin & other such currencies are operated as peer-to-peer digital currencies.
While ethereum was made , developers faced the problem for adding more functions in existing blockchain or create a new one. Ethereum was made by Vitalik Buterin developed a new one.
Ethereum’s Invention i.e. Ethereum Virtual Machine (EVM)can run anyone’s program no matter with programming langauge , time or memory.
EVM makes the process to create blockchain applications in an easy & efficient manner. It took away from the concept to make new blockchain for each application.Ethereum enables the development of potentially thousands of different applications all on one platform.
What can Ethereum be used for?
Ethereum enables developers to build & deploy decentralized applications. Decentralized applications or Dapp serves a particular purpose to the users. For ex :- Bitcoin is a Dapp to provide peer to peer electronic cash systems to make online Bitcoin payments.
Decentralized applications are made up of code that runs on a blockchain network, they are not controlled by any individual or central entity.
What are the benefits of Ethereum decentralized Platform?
All decentralized applications runs on blockchain, the benefits of these currencies are
- Immutability :- No third party can tamper your data.
- Corruption & tamper proof :- Apps are based on principles of consensus, making censorship impossible.
- Secure :- the chances of hacking attacks & fraud is very low because of no central point of failure and secured using cryptography, applications.
- Zero downtime – Apps never go down and can never be switched off.
What’s the downside of decentralized applications?
Decentralized applications are getting popularity but we should know about their faults. As the codes are written by human beings, so the codes are also imperfect & bugs in them can be exploited. If someone exploits the code then the attack on network is inevitable. This could be obtaining a network consensus & creating a nuisance. The essence of blockchain is meant to be immutable but actions taken by the central party can effect the whole system.
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