In 2015, Ethereum or ETH was launched. It is a blockchain-based, open-source, decentralized software platform used for cryptocurrency ether. It allows Distributed Applications and Smart Contracts to be run and built without downtime, control, fraud, or any third party interference.
Cryptocurrency continues to develop and progress through high-end encryption techniques. Technology now allows you to use cryptocurrency as an exchange of payments online for services and goods. You may have heard of other types of cryptocurrencies like Bitcoin and Tether.
19-year-old Vitalik Buterin founded Ethereum to take technology that powered Bitcoin’s digital currency and use it for democratizing organizations, currencies, business, and more. Users can create “their own country with an unchangeable constitution,” and take the power away from major corporations, power brokers, central banks to place the decision-making in the hands of the individuals.
In 2013, Buterin released a white paper passing down his ethereum ideas, and he was awarded $100,000 and the prestigious Thiel Fellowship for his accomplishments. Developers like Dr. Gavin Wood and Joseph Lubin were interested in Buterin’s ideas. In July 2014, Wood and Lubin joined Buterin to launch a crowdfunding campaign. $18 million was raised in a crowdsale by Ethereum and it was the most successful at the time. Frontier is Ethereum’s first platform that launched in July 2015.
How does Ethereum work?
Ethereum uses a global network of computers that work as a supercomputer. The network comes together and runs applications that are virtually independent of third party censorship or interference due to the blockchain being tamperproof. Smart contracts run the way they’re programmed and reduce fraud risks. When conditions are met and proven to be met, such as payment transfers, the goods or service is given to the buyer.
Blockchain technology in ethereum consists of a series of secure, or cryptographic, public records that are linked together. The records are hard to change because the changes must be approved by its users, and they have stamped their user data. Ethereum’s goal of the “Turing-complete” programming language is to enable developers to write more programs. These written programs in which blockchain transactions can automate and govern outcomes.
Ethereum doesn’t need one place to control and store its data. Ethereum uses a similar protocol and blockchain design from bitcoin. But, ethereum tweaked it to support applications that go beyond money. What makes ethereum different is that the nodes store each smart contract’s most recent state along with all the ether transactions. The network has to keep track of the current information, or state, of each ethereum application. This includes every balance, smart contract code, and where it’s stored.
How is Ethereum Used?
Anyone can keep debt, create financial contracts, or ownership registries on the ledger and avoid using an external recordkeeper. The transactions are “trustless” transactions because there is no requirement to trust a counterparty since the contract is self-fulfilling. The size and scope of Ethereum make speed and storage a major technical problem. It only carries out a few transactions per second, while other cryptocurrency platforms can operate at a hundred.
Not only is Ethereum a platform, but it’s also a programming language. Ethereum runs on a blockchain that helps developers build and publish DAPPS or Decentralized Digital Applications. Ethereum is open to anyone with a wallet. Ethereum provides open-access to digital cash and data-friendly services for anyone. The community-built technology behind ETH or ether has thousands of applications available for use. You can use Ethereum to sell, trade, and buy services and goods without a middle man. Using Ethereum can bypass banks for transferring money, skipping a sales contract, or launching a fundraising site.