In this article of Quantvan academy, we want to have a brief Introduction about Ethereum Cryptocurrency. besides Bitcoin, Ethereum is also a popular crypto among people end enthusiast of this area.
What is Ethereum?
for having a Ethereum Introduction, Ethereum is an open-source public service designed to expand the functionality of the blockchain by allowing developers to do much more than transferring money betwee entities. It facilitates smart contracts and cryptocurrency trading securely while using blockchain technology. Smart contract is a term for describing a computer code.
It can facilitate the exchange of money, content, property, shares or anything valuable. It operates like a computer program on blockchain that automatically works when specific conditions met. Virtual machine is another technical term on this platform which lets you run second program on your actual computer with the difference that it runs in a distributed, decentralized manner on the blockchain rather than on a single machine. Developers can deploy all kinds of applications by using Ethereum.
History of Ethereum
After Vitalik Buterin realized that Bitcoin community chose another approach for solving limitations of Bitcoin rather than going after individual applications, he envisioned a different path which led to the rise of the second most valuable cryptocurrency in existence.
Bitcoin allowed financial use cases but Buterin aimed at crossing the limits.
so he released a white paper in November 2013 describing his proposed technology. which was a new platform supporting more generalized scripting and application development which eventually called Ethereum.
Ethereum and Bitcoin
The main difference between Bitcoin and Ethereum is that Ethereum’s ability to trade more than just cryptocurrency. In 2014 Buterin and other co-founders of the Ethereum launched a campaign and ultimately raised more than $18 million. Buterin hopes Ethereum will be that specialized system for those use cases of blockchain who are seeking for a solution.
How does it work
Imagine people sending each other messages on their smartphones. They typically use common apps like WhatsApp which run by large companies.
These companies control traditional messaging and store all messages; therefore, if they get hacked or discontinued, personal information of users exposed to danger.
Now imagine that this messaging is happening through a decentralized Ethereum system .
which is run by a network of independent private computers worldwide.
Ethereum stands between the sender and receiver with the difference that the information sent remains hidden. and never stored on company servers and is only available for sender and receiver of the message. Decentralized apps use smart contracts.
They work like a vending machine ultimately enforce rules automatically and ensures fairness to all parties since they cannot be manipulated further. Smart contracts run on their own. All payments made using its own digital currency in the Ethereum system, called Ether.
Ether uses for transaction; every time money transferred by an Ethereum Smart Contract.
Ether can store directly in Smart Contracts’ code so money can sent and received automatically.
Ether comes up with an important security function for the Ethereum platform. Decentralized pay a small Ether fee each time they use the network in order to prevent people from creating malicious apps on the network .
also,the fee called gas since it functions as the fuel for running Ethereum’s application. What makes Ethereum valuable is the combination of Smart Contracts and Blockchain technology which eliminates the need for third party