What Blockchain Networks Does Ethereum Support – What on earth is Ethereum I suggest I keep hearing about all of it the time I have actually seen it’s the 2nd biggest cryptocurrency around, however I just can’t seem to wrap my head around it.
Is it as innovative as Bitcoin? Can it actually alter the world as we know it If you wish to have a better understanding of Ethereum, but are tired of descriptions that seem like complete technical mumbo jumbo, stay … Here on Bitcoin, Whiteboard Tuesday, or need to I say, Ethereum, Whiteboard Tuesday, we’ll address these concerns And more.
Prior to we get into Ethereum, we need to do a fast wrap-up about Bitcoin given that it’s the basis from which Ethereum was born.
By now you probably know that Bitcoin is a form of decentralized cash, and if you still have some questions about what that suggests or how it works, then you may consider reviewing our original video “what is Bitcoin”.
Before Bitcoin was developed.
The only way to utilize money digitally was through an intermediary like a bank or Paypal.
Even then, the cash used was still a federal government released and regulated currency.
Bitcoin changed all that by creating a decentralized kind of currency that people could trade straight without the requirement for an intermediary.
Each Bitcoin transaction is verified and validated by the entire Bitcoin network.
There’s, no single point of failure, so the system is virtually difficult to close down, manipulate or control.
Pretty neat huh Well now that we know that money can be decentralized.
What other functions of society that are centralized today would be better served on a decentralized system.
What about voting Voting needs a central authority to count and verify votes.
Property transfer records presently utilize centralized residential or commercial property registration.
Social media network like Facebook are based on central servers that manage all of the data we submit to them.
What if we could use the technology behind Bitcoin, more typically known as Blockchain to decentralize other things as well.
The interesting feature of Blockchain technology is that it’s, really, the by-product of the Bitcoin innovation.
Blockchain innovation was developed by fusing currently existing innovations like cryptography evidence of work and decentralized network architecture together in order to produce a system that can reach decisions without a main authority.
There was no such thing as “blockchain technology” before Bitcoin was developed.
Once Bitcoin became a reality, individuals began observing how and why it works, and named this “thing” blockchain innovation.
Blockchain is to Bitcoin what the Internet is to email, a system on top of which you Can develop applications and programs.
A currency like Bitcoin is simply one of the choices.
This got people very fired up and they began to check out.
What else can we decentralize.
In order for a system to be truly decentralized? It requires a big network of computers to run it.
Then, the only network that existed was Bitcoin and it was pretty restricted.
Bitcoin is written in what is known as a “turing insufficient” language, which makes it comprehend only a small set of orders like who sent out just how much money to whom.
If you wish to produce a more complex system, you’ll require a different programs language, which indicates a different network of computers.
Imagine for a second.
You wanted to develop your own decentralized program, just like Bitcoin in the house.
You ‘D require to comprehend how Bitcoin’s decentralization works.
Compose code that imitates the exact same behaviour, get a substantial network of computers to run this code and so on … And that is a lot of work.
Ethereum was very first proposed in late 2013 and then brought to life in 2014 by Vitalik Buterin, who at the time was the co-founder of Bitcoin Magazine.
Ethereum is the Do It Yourself platform for decentralized programs, likewise known as Dapps decentralized apps.
If you want to develop a decentralized program that no single person controls, not even you, even though you composed it all you have to do, is find out the Ethereum programming language called Solidity and begin coding.
The Ethereum platform has countless independent computers running it, implying it’s fully decentralized.
As soon as a program is deployed to the Ethereum network, these computers, also referred to as nodes, will make sure it executes as composed.
Ethereum is the infrastructure for running Dapps worldwide.
It’s, not a currency, it’s, a platform.
, The currency used to incentivize the network is called Ether, however more On that, later on.
Ethereum’s goal is to genuinely decentralize the Internet.
The web is centralized.
I believed the Internet currently was decentralized and that anyone can begin their own website.
, While in theory that may be real in practice: Amazon, Google, Facebook, Netflix and other giants control.
Most of the world wide web, as we know, it.
There’s, nearly no activity on the internet, that takes place without some sort of 3rd or intermediary party.
, But as soon as the principle of digital decentralization was shown by Bitcoin an entire new variety of chances appeared.
We can lastly start to picture and develop an Internet that connects users directly without the need for a central 3rd celebration.
People can “lease” hard disk area directly to other individuals and make Dropbox obsolete.
Chauffeurs can use their services directly to travelers and remove “Uber” as the Middleman.
Individuals can purchase cryptocurrencies straight from one another without the need for an exchange that can get hacked or steal.
Your money. What Blockchain Networks Does Ethereum Support
Ethereum enables people to connect straight with each other without a main authority to look after things.
It’s, a network of computers that together integrate into one effective, decentralized, supercomputer.
Ok, So now you know what Ethereum does, however we have not touched upon HOW it does it.
Ethereum’s coding, language Solidity is utilized to write “Smart Contracts”.
That are the logic that runs Dapps.
Let me describe:.
In reality, all a contract is is a sets of “Ifs” and “Thens”.
Implying a set of actions and conditions.
For example, if I pay my landlord $ 1500 on the 1st of the month, then he lets me use my home.
That’s exactly how clever agreements deal with Ethereum.
Ethereum developers compose the conditions for their program or Dapp, and then the ethereum network executes it.
They are called wise agreements since they deal with all of the elements of the agreement enforcement management, payment and performance.
For instance, if I have a clever agreement that is used for paying lease, the property manager doesn’t require to actively collect the money.
The contract itself, “understands”.
If the money has actually been sent out.
If I undoubtedly sent out the money, then I will be able to open my home door.
I will be locked out if I missed my payment.
Smart contracts also have their disadvantages.
Going back to my previous example.
Instead of having to toss out a renter that isn’t paying a “wise” contract would lock the non-paying renter out of their house.
A genuinely smart agreement, on the other hand, would take into account other factors too, such as extenuating situations, the spirit with which the contract was composed, and it would likewise have the ability to make exceptions if warranted.
Simply put, it would imitate a truly great judge.
Rather, a “clever agreement” in the context of Ethereum is not smart at all.
It’s, in fact uncompromisingly letter stringent.
It follows the rules down to a T and can’t take any secondary considerations or the “spirit” of the law into account like what commonly occurs with real world contracts.
When a clever agreement is released on the Ethereum network, it can not be modified or fixed even by its original.
The only way to change this contract would be to encourage the whole Ethereum network that a modification must be made which’s practically difficult.
This creates a very severe issue because, unlike Bitcoin Ethereum was built with the ability to produce truly intricate agreements and intricate contracts are really difficult to protect.
With any agreement the more complex it is, the harder it is to implement as more space is left for interpretations Or more provisions should be written to handle contingencies.
With smart agreements.
Security implies managing with perfect precision every possible way in which an agreement could be executed in order to make certain that the agreement does just what the author meant.
Ethereum released with the idea that “code is law”.
That is a contract on Ethereum, is the supreme authority And no one might overrule the agreement.
Well that all concerned a crashing halt when the DAO occasion, happened.
“Dow” or DAO, stands for “Decentralized Autonomous Organization”, which allowed users to deposit cash and get returns based on the investments that the DAO made.
The choices themselves would be.
Crowd-Sourced and decentralized.
The DAO raised $ 150M in Ethereum currency ether, when ether was trading around $ 20.
While this all sounded very good, the code wasn’t protected effectively and resulted in somebody figuring out a way to drain pipes the DAO out of cash.
Now you could say that the person who drained pipes the DAO was a “hacker”.
However some would argue that this was simply somebody who was benefiting from the loopholes he discovered in the DAO’s clever contract.
This isn’t very different than an innovative lawyer, finding out a loophole in the present law to effect a favorable result for his client.
What occurred next is that the Ethereum neighborhood decided that code no longer is law and altered the Ethereum rules in order to revert all the money that went into the DAO.
Simply put, the agreement, investors and writers did something foolish and the Ethereum designers decided to bail them out.
The little minority that didn’t agree with this relocation adhered to the original Ethereum Blockchain before its procedure was modified which’s how Ethereum Classic was born, which is Actually, the original Ethereum.
We’ve covered a lot up until now, and the last thing I want to discuss is Ethereum as a currency.
We’ve already established, that Ethereum is essentially a big bunch of computers collaborating like one super computer system, to execute code that powers Dapps.
Nevertheless, this expenses cash Money to get the machines to power them up, save them and cool them.
, if required.
That’s why Ether was developed.
When people speak about the rate of Ethereum, they actually are referring to Ether the currency that incentivizes individuals to run the Ethereum procedure.
On their computer system.
This is really comparable to the method Bitcoin miners make money for maintaining the Bitcoin blockchain.
In order to deploy a wise agreement to the Ethereum platform, its author must pay to do so.
That payment is made in the form of ether.
This is done so that people will write enhanced and effective code and won’t squander.
The Ethereum network calculating power on unnecessary jobs.
Ether was first distributed in Ethereum’s original Initial Coin, Offering back in 2014.
Back then it cost around 40 cents to buy one Ether.
Today, one Ether is valued in hundreds of dollars, considering that making use of the Ethereum network has grown exceptionally due to the ICO hype that began in 2017.
Still Confused Don’t worry, we’ll get more into Ether and mining in a later.
Ethereum’s network and Ether are a whole new bunny hole that we’ll cover, but I think this will do for now as an introduction to Ethereum.
This concludes this week’s episode of Ethereum Whiteboard Tuesday.
Hopefully, by now you have a much better understanding of what Ethereum is A network of computers working together to change the central model of programs and business which run the Internet today. What Blockchain Networks Does Ethereum Support