Before you understand the concept of Ethereum, you need to know about the concept of Bitcoin since Bitcoin acts as the fundamentals of Ethereum. So what exactly Bitcoin is? It is a kind of digital currency which works on the principle of decentralization. Which means that there is no role of government, institution or authority controlling it. It uses the concept of encryption keys for connecting buyers and sellers. A Bitcoin network helps in maintaining the validity of your transaction. By now you have a brief idea about the term Bitcoin. With the combination of advanced mathematics and record-keeping, a person can mine Bitcoins.
Let us know about the concept of Blockchain
Now when you have the idea that you can decentralize money, what opinion do you have about the functions of the society that works on the principle of centralization? Voting as well as the real estate transfer records require centralized property registration authorities. In fact, social networking sites work on the principle of centralized servers. Here comes the role of Blockchain technology. This technology is actually the by-product of Bitcoin and comprises of the fusion of existing technologies like cryptography, work as well as decentralized network architecture.
Previously there was no such term as blockchain technology but once Bitcoin came into existence, people got to know about blockchain technology. As your email is incomplete without the Internet, the concept of Bitcoin is incomplete without Blockchain technology. With this concept, people got excited but there was one problem because large computer network was necessary to make a system totally decentralized. Bitcoin uses “Turing incomplete” language which understands a small set of orders. This language is not helpful for the creation of a complex system. Therefore, a different programming language is necessary for a different network of computers. If you want to create your own decentralized program, you need to know about the concept of Ethereum.
A briefing about Ethereum
The concept of Ethereum came into existence in 2013 and Vitalik Buterin brought it to life in 2014. Ethereum, also known as Dapps is the Do It Yourself platform that is necessary for decentralized programs. In order to create your own decentralized program, you need to learn this programming language known as Solidity and continue with your coding session. Moreover, this platform has thousands of computers running it in a successful decentralized manner.
Ethereum is the building block for running Dapps worldwide. If you are thinking that it is a currency, you are wrong. It is actually a platform which aims to decentralize the internet. With its awesome features, it allows you to connect with others without a central authority. In short, it is a network of computers which produces one powerful, decentralized supercomputer.
Want to know about smart contracts? Take a look
By now you have an idea about the purpose of Ethereum but how does it work? Solidity which is Ethereum’s coding language is helpful for writing smart contracts. The concept of smart contract is just like the real-life contracts as they deal with all the contracts like enforcement, management, performance, and payment. Ethereum developers write the conditions for their program and then the Ethereum network executes it.
After a contract is put to use on the Ethereum network, you cannot correct or edit it. The only way to make changes is to convince the entire network regarding the changing matter. Ethereum introduces the idea of “Code is Law” which indicates that nobody can overrule the contract. These concepts came to a halt with the introduction of DAO.
Few facts on DAO
DAO stands for Decentralized Autonomous Organization which helps you to deposit money and get returns depending on DAO investments. After that, the Ethereum community made it a point that all the rules need alteration to revert all the money that went into DAO. But small minorities did not accept this concept which leads to the birth of Ethereum Classic.
Here comes the conclusion
Ethereum is a network of computers working together and helps in the replacement of a centralized model of companies which run the internet today. By now you must be able to grasp the concept of Ethereum. We are providing you with a brief summary. Hope that helps you out. Let us know about your experience after you read this. We would love to get your feedback. Stay in touch.