Understanding Ethereum in a Bitcoin World
The first time we heard about blockchain technology (the mathematically-secure method for managing a distributed ledger of information) was after the seminal work introducing the Bitcoin (BTC) crypto-currency was published by ‘Satoshi Nakamoto’ in November 2008. The software to access the blockchain and participate in the exchange and trade of BTC was released on the 3rd January the following year. The name of the attributed author is in inverted commas because we don’t actually know who it is!
Nonetheless, the mathematics he introduced in the blockchain has enabled other applications to be developed, one such application being Ethereum (ETH). Like BTC, ETH is still based on a blockchain but comes with additional features to be more than Bitcoin’s mechanism for storing and exchanging tokens of value. Ethereum comes with a virtual machine at each node and a programming language (Solidity) to develop programs that run on each nodes’ virtual machine to enable a wide range novel applications.
ETH is an ecosystem that includes a token of stored value (an Ether or ETH), as well as a virtual machine (that lives in the Ethereum wallet software that you load up on your computer as an app) and a Turing-complete programming language to run in the virtual machine. It is these additional two features that are at the heart of the difference between BTC and ETH.
The ETH virtual machine and the programming language permit the modelling, coding and enforcing of contracts, society charters, voting rules, bodies of law, market regulations, wills and last testaments, business processes, and other real world instruments and arrangements of governance; but all without a central authority or body of control, none which can be repudiated, and all immutable.
In the world of Ethereum, like Bitcoin, you do work in the real physical world (run your computer to solve mathematical problems, generate electricity, grow apples, etc.) which gives you ETH. ETH can then be exchanged, according to established rules on the Ethereum blockchain, for money, more ETH, BTC, or other goods/services; just as you would today with BTC or any other token of value or fiat currency.
The inventors of Ethereum see a time when someone can sell kWh from your home wind turbine to get apples, with ETH traded in-between by Ethereum-network-based smart agents according to some universal set of rules determined by the people and embodied in a smart contract living in Ethereum.
Ethereum came into being in 2014. It touts itself as a worldwide decentralised, dis-repudiable, uncensorable platform for economic and political interaction. Earlier we spoke about Ethereum’s programming language used to implement real world governance arrangements. The programming language is used to write dApps (distributed apps) in Ethereum-speak.
If the power of a global computation platform for decentralised governance of the economic and political spheres is not enough, combined with the power of the Inter-Planetary File System (IPFS) and mesh-based internetworking protocols; and all forms of centralised authority and control are likely to be challenged, at best. Now with many of the technology building blocks in place, it is clear that a “browser” to navigate this new network will likely occupy the focus of those leading this next revolution. With a simply device or application that can browse the Ethereum blockchain and make its contents visible (much like a web browser is used to navigate and make information resources stored on computer servers known to us all today), our world’s seats of power and control look to be disrupted in unpredictable ways.
