In 2018 it is nearly impossible to avoid the topic of blockchain, crypto, Bitcoin and Ethereum. Today we are going to look at one of the most important blockchain networks, which has potential to truly disrupt the world and a wide-array of industries with making decentralized applications:
Welcome to Ethereum!
What is Ethereum?
Ethereum is a decentralized system, not controlled by any government or single organization. Today most of the data we see on our computers is centralized- stored in a central database somewhere, making it vulnerable to attacks, and being controlled by central entity. Ethereum wants to disrupt the existing client-server transaction model, by connecting peers on the blockchain. This way servers and clouds are replaced by volunteer nodes, computers of the network, eliminating a central point of failure. User's personal data, information and content can stay on their computer without hosting it on a third party server, and sharing it in the meanwhile with the world when and how they want to.
What makes Ethereum truly special, that it is not just a blockchain, but a platform to build more decentralized applications, lending the open-source infrastructure to anyone who would like to create their own blockchain.
" In short, Ethereum is a public, open-source, Blockchain-based distributed software platform that allows developers to build and deploy decentralized applications." Cointelegraph
Check out this video for a bit more explanation from the amazing We The Cryptos:
Vitalik Buterin and the history of Ethereum
The Ethereum network was invented and founded by the Russian-Canadian boy-genius (only 24 years of age at the time of writing!) Vitalik Buterin. Buterin started to get involved with Bitcoin in 2011, founding Bitcoin magazine. In 2013 he explored the idea of extending the network for more than just currencies- to be able to exchange any kind of asset via a decentralized network. In 2014 Vitalik and his co-founders of the Ethereum network gathered via crowdfunding $18 million dollars to start their project. Since then Ethereum has grown hugely in value, and supported to built 1824 decentralized applications of many kinds.
What makes Ethereum even more special?
Ethereum is the first global blockchain network operating with smart contracts. Smart contracts define the terms and conditions of an agreement between 2 parties, where if the conditions are met and registered on the blockchain, the contract executes itself.
EVM- Ethereum Virtual Machine- what makes Ethereum really special. The EVM makes it possible to run any program on it, given enough time and computing power. This makes creating blockchain applications way easier, and enables hundreds of applications.
Ethereum Alliance- The Ethereum alliance is a non-profit corporation of several companies big and small, which provides resources for businesses to help explore the wide potential in the blockchain, and within Ethereum network. Amongst their members you can see names such as Accenture, Deloitte, Royal Bank of Canada, and Samsung- so you know it is spiking the fantasies of big and small corporations alike.
What now- the future of Ethereum
It is a long and ambitious road for Ethereum to take over as the world's decentralized computer, and there are still many technicalities to solve. The scalability of the network is questionable. As the network keeps on getting bigger it requires more and more computational power, leaving a huge footprint behind the hardware miners and users. Besides, as the network grows, the rewards for mining (alias putting new blocks on the chain by solving computational puzzles) becomes harder with smaller rewards.
Vitalik has teamed up with Vlad Zamfir to form Ethereum Casper, which will validate the chain not via proof of work, but proof of stake statements. It is a model, where blocks are validated by placing a bet on it from the validators. If the block get validated there is a reward for the validator based on the amount of their bet. This technology would provide an energy efficient solution with more economic security, and solve the problem of scalability by "sharding" data in smaller pieces making the network faster. Casper is on its way, and brings one step closer the possibility of Ethereum truly changing how we transact.
The end (of a new beginning)
Ethereum is truly one of the biggest inventions of the decade when it comes to Blockchain and changing the way we transact. It gives the possibility to connect us people and exclude central entities, taking the power back to the hands of the individuals. As Vitalik said:
"Whereas most technologies tend to automate workers on the periphery doing menial tasks, blockchains automate away the center. Instead of putting the taxi driver out of a job, blockchain puts Uber out of a job and lets the taxi drivers work with the customer directly. " Vitalik Buterin
I am very excited to see what the future holds for this magnificent invention!
If you would like to read more on this, please feel free to visit the links below, and of course fire up with any questions or comments you would like!