Xpedition Week 4: Intro to Ethereum (Part 2)
Applications of Ethereum
Hey Xplorers! After the brief introduction on Ethereum last week, are you ready to go into the darkest pits as we head towards Ethereum Part 2? Hang on tight and here we go!
While Ethereum, or rather, cryptocurrency in general may appear to be merely confined to the virtual world, its applications are in fact value-adding to the real world that we live in! In the case of Ethereum, it can assist the process of voting system, banking system, shipping, as well as agreements between parties. So how exactly is Ethereum useful? Using Ethereum in voting systems ensures that that poll results are available and open to the public. This allows for transparency and reduces the reliance on trust in relevant parties. This is particularly beneficial in situations where governments may not be as stable as citizens hoped. The use of Ethereum in such circumstances will pave the way for more democratic processes and prevents fraudulent takeovers of the government. For instance, Sierra Leone adopted blockchain-based technology in their voting system as it allows anyone who is interested to review, count, and validate the votes. While Ethereum was not used in this example, it proves that blockchain technology, in which Ethereum is a major leader of, can help to improve and bridge the flaws in the current system.
In the next two sections, we will discuss the unique features of Ethereum which allows it to stand out in the market. These include Smart Contracts and Decentralized Applications (DApps). Before we go further into the trench, let us first understand that Smart Contracts and dApps are related. A smart contract is a programmed code that runs on Ethereum blockchain. Smart contracts will self-execute when the programmed conditions are being met. DApps do not exist on the blockchain, but rather, they interact with smart contracts, and by extension, the blockchain itself. With that, let us head into the details of smart contracts and DApps!
As mentioned, smart contracts refer to immutable computer programs running on the Ethereum blockchain as part of the Ethereum network protocol. In other words, smart contracts cannot be altered or controlled as they are deployed by the network to run as programmed. Smart contracts are essentially agreements between two parties using a computer code, and similar to a physical contract, smart contracts work based on set conditions. How users interact with smart contracts is by submitting codes that execute a function defined in their smart contract. It is important to note that these transactions are trackable albeit irreversible.
Smart contract can help you exchange money, property or anything with value in a transparent, conflict-free, accurate and efficient way, while avoiding the services of middlemen. Still confused? Let’s see how smart contracts can be executed in the real world. Imagine a scenario where Matcha would like to sell his car to Alice. The smart contract will be executed as follows:
- Matcha defines in a smart contract the conditions by which he will sell his car. He proceeds to sign the contract with his private key.
- Matcha then leaves his car locked with a smart lock in his garage. The car has its own blockchain address and the smart lock is controlled by a smart contract.
- Alice sees Matcha’s car on sale on a website and sign Matcha’s contract with her private key. She adds the agreed amount from her blockchain address to Matcha’s blockchain address
- Once the smart contract is executed, the blockchain network will verify the contract requirements
- If all conditions in the smart contract are met, the access code for the smart lock will be transferred to Alice and Matcha will get the defined amount of money in his blockchain address.
(example adapted from: https://www.linkedin.com/pulse/real-world-example-smart-contract-marvin-felder)
As easy as ABC right? Yes! Matcha is here to make your Xpedition much simpler than before!
Decentralized Application (DApp)
DApp is a computer application that runs on a blockchain or P2P network of computers. Just like any developer can build apps on the App Store or iOS, developers can also build on top of Ethereum’s blockchain infrastructure. So, how different is DApps from regular Apps?
- DApp users interact with the smart contracts instead of the user interface interacting with a traditional program
- DApps are hosted on many computers across the world via a peer-to-peer network and data is recorded on a public blockchain, unlike regular apps which are hosted on a single personal computer or on a company’s centralized server
In summary, DApps can do anything a normal app can do, and on top of that, DApps possess qualities of being “distributed and decentralized”. To illustrate this, take the example of popular DApp game CryptoKitties. The game is built upon the Ethereum blockchain and is one of the earliest attempts to use blockchain technology for leisure. In this game, users can collect, breed, and even sell these virtual cats for real world currency. This stemmed from the fact that every single cat created is entirely unique because users own the code of the blockchain for that cat. With such personalization and uniqueness, some argue that DApps definitely triumphs over regular game apps! And Matcha obviously finds Cryptokitties more appealing than the ordinary games! How about you, Xplorers?
After all these learning about Bitcoin and Ethereum, we are sure that you are itching to learn more about the world of cryptocurrencies beyond just these major coins. Stay tuned for more Xciting content in our Xpedition series. For now, remember to check out our postings for this week!
MEXC Global: https://www.mexc.com/