A Summary on Ethereum
Making sense of Ethereum’s Yellow Paper
Ethereum is an open source “decentralized generalized transaction ledger” project created by Vitalik Buterin. Ethereum allows developers to build decentralized applications (Dapps) on the Ethereum platform. Dapps are similar to any everyday app you would have on your phone with the exception that the apps are connected to the blockchain. Since these dapps are connected to the blockchain that means that is recorded on the ledger and this is made possible by smart contacts. Smart contracts work directly with these decentralized applications in order to connect them to the blockchain. Smart contracts are also a way to enforce trust given that these contracts have rules and can respect negotiated terms automatically releasing the need for a third party. This automation, used for assisting the transfer of any valuable asset, leaves zero room for human reaction and basic human error. All of this development was made possible by the Turing-complete programming language built into Ethereum.
Ether, a native currency used on the Ethereum platform, is used on the Ethereum network to navigate the platform, also known as gas. This gas is used to make any transactions or execute any smart contract on the platform and is also used as payment to miners. These miners ensure that the network is secure (valid blocks/transactions) as part of Ethereum’s Proof of Work. Ethereum is also developing Proof of Stake where the miners will need to prove that a user has Ethereum instead of miners having to prove their work. Gas also ensures that the network is not weighed down by any meaningless operations, provides a limit.
Ethereum like bitcoin is a peer-to-peer network and instils more confidence between buyer and seller but these two also have their differences. Ethereum, as an open source project, allows for the blockchain to be programmable therefore making a way for the blockchain to reach its peak. However, bitcoin is not so versatile and only focuses on being an alternative to everyday currency by revolutionising cryptocurrency and the way the world views digital assets. Another noticeable difference is the fact that Ethereum has an EVM which is Turing-complete and transaction completions are based on the amount of gas and not bounded by memory per block as bitcoin would be and bitcoin is also not Turing-complete.
Disclaimer: The views expressed by the author above do not necessarily represent the views of the Ethereum Foundation.
