What is Ethereum?

Ethereum is a decentralized blockchain-based platform which was created by Vitalik Buterin. Being decentralized, Ethereum is not controlled by anyone. A global system of ‘Nodes supports the system’. Nodes are volunteers who enforce the consensus rules of the system, keeping ETH network fool-proof and receive rewards in return. The consensus rules are dictated by smart contracts that are designed to automatically perform the transactions within the network with the parties that you don’t trust.The system also offers its users with the EVM, which serves as a runtime environment for smart contracts. It provides users with the security to execute an untrusted code while ensuring at the same time that the programs do not interfere with each other.

How does Ethereum work?

Ethereum uses Blockchain technology, and it uses it in two ways – Smart contracts and dApps. The Ethereum blockchain is designed in a way that the transactions can only happen when certain conditions are met. And the rules which decide the conditions are known as smart contracts. They will work with all the aspects of the contract, including management, performance, payment, and enforcement. Once the smart contract is deployed, it cannot be edited or amended; it is immutable.

Ethereum has a coding language named Solidity, which is used to build decentralized applications. The dApps are the applications that do not work on a traditional central server; instead, they run on blockchain technology. These dApps are going to compete with centralized apps in industries like e-Commerce, email, social media, and online banking.

Ether is a digital fuel for automated smart contracts, and new Ether is created by the process ‘mining.’ In the process nodes on a blockchain must verify the transactions, and as a result, they are rewarded with a new currency. Mining Ether in such a way is called ‘Proof of Work.’

To store ETH, you will need a wallet that contains private keys. There are five types of wallets where you can store your ETH – Hardware wallets, Desktop wallets, Mobile wallets, Web wallets, and Paper wallets.

Use Ethereum

ETH runs on blockchain technology, which is upheld by a network of many high-performance computers called nodes. As a result of securing the network and verifying the transactions, the nodes receive rewards in the form of tokens. Ethereum was the first digital currency, which was primarily built as a settlement layer. It means that it was designed in a way that other things to be developed on its platform. One aspect of Ethereum’s suitability as a settlement layer is its ability to execute smart contracts.Smart contracts are secure because they prevail on Ethereum blockchain, which is impossible to temper with. As smart contracts are blockchain-based, it is trustless.

Ethereum can be used as a platform for developing dApps which are decentralized and are not run by a single entity. Ethereum based apps do not need users’ personal information in registering and using. Ethereum based dApps do not need to integrate any third-party means of payment.

Ethereum can be used in the prediction market, crowdfunding, Web hosting, legal contracts, and many more.

Who created Ethereum?

Ethereum was created by a 19-year-old software engineer, Vitalik Buterin, from Toronto, who has worked on a number of Bitcoin ventures. Ethereum offered a big stage which permits engineers to develop blockchain applications on its platform. Buterin was inspired to start Ethereum when he confronted a few inadequacies in the Bitcoin platform. Thereafter, he quickly set out to form blockchain free of the inadequacies that Bitcoin has.

In 2011, Buterin founded Bitcoin magazine and started composing many articles clarifying his visions about currency’s future.

The Ethereum white paper was published in 2013, which archived a modern open-source convention for developing decentralized applications. Along with Buterin, Ethereum was co-founded by Mihai Alisie, Anthony Di Iorio, and Charles Hoskinson.

Ethereum has a native currency, Ether, which was crowd sale in July 2014. At that time, they sold 60 million tokens. Twelve million Ether were made to improve Ethereum establishment and to promote its endeavors.

In early 2017, the cost of ETH expanded 1000 percent over the course of a few months, which also drove the cost of other blockchain tokens called altcoins. However, as Ethereum was not the first blockchain technology people got introduced to, people refer to it as “Xeroxing,” which even leads to a confusing reference of Ethereum as Bitcoin Ethereum.