Ethereum — An open source, blockchain-based computing platform and operating system that allows us to write smart contracts.

This is the shortest way to explain what Ethereum is. But it is not the best as it leaves us with many more questions such what is Blockchain? What are smart contracts? Operating System? What language is it written in?

In this post, I will try to answer these and many other questions that I was filled with when I first heard about Ethereum.

Prologue — Bitcoin and Blockchain

The theoretical birth of Blockchain took place back on October 31, 2008. This is when an anonymous entity by the name of Satoshi Nakamoto released an academic paper describing a system that allows monetary transactions between individuals without the need for a financial institution such as a bank to act as a middleman. This system was called Bitcoin.

But the actual Bitcoin network was deployed online in January 2009. Remember that Bitcoin consisted of the idea of people transfer money to each other without involving a central authority (bank). This eventually led to the idea of a decentralized network, which is one of Blockchain’s main characteristics.

Eventually, the people started to say the Bitcoin was based on Blockchains, and Blockchains were used in Bitcoin to store the list of monetary transactions.

But this is just the Bitcoin network that I am talking about, which is all about decentralizing money. And while most people were focused on how decentralizing money opened up a whole new set of opportunities, people started to wonder if decentralization can be applied to something other than money as well.

Vitalik Buterin was one of these people. He wrote an academic paper in 2013 where he discussed the need for a programmatic control over transactions. He also introduced the term “Decentralized Autonomous Corporations” (DAC). And he named this paper Ethereum.

You can read Vitalik’s paper here.

Vitalik also spoke about something called smart contracts. A smart contract is basically some code that is placed inside the Ethereum Blockchain and can be programmed to do certain things.

The actual Ethereum Blockchain system went live on 30 July 2015, and around 72 million Ethereum bitcoins were “pre-mined”.

In 2016, due to a flaw in some smart contracts that led to a theft of $50 million worth of Ethereum based cryptocurrency (Ether), Ethereum was split into two separate blockchains. The new version was called Ethereum (ETH) and the older version was renamed as Ethereum Classic (ETC).

What is an Ethereum network?

Now that you have some basic understanding of Bitcoin and Blockchain came to be, let’s get into what Ethereum network is and how it works.

Ethereum is a blockchain network that can be used to transfer money, store data, and more!

There are many different types of Ethereum networks. But each of these networks is formed when multiple blocks or nodes are connected to each other.

Each node is simply a system (computers) that has an Ethereum client running on them. The node contains a copy of the entire Blockchain on it.

The last sentence is of the previous paragraph is the main differentiating point between blockchain and other databases, or in case of Bitcoin, banks.

In the case of databases such as AWS, MongoDB, Firebase and other, there is usually a central database where all the data of the user is stored. But in the case of Blockchain, there is no central database. Each node of the blockchain acts as the storage space for the data/money. And this is why Blockchains are described as decentralized.

Now that we have a basic understanding of what an Ethereum network is, the next question you need to ask yourself is:

Who can join this network?

And the answer to that is Anyone.

Let’s divide the general population into two sections:

• Developers
• Users

Developers and Users can join the Ethereum network in two separate ways. This is because the developer will want to use the network to create applications that interact with the network, whereas the user will want to use the network as a consumer.

Developers use a library called web3.js, which is actually a collection of libraries that allows developers to interact with an Ethereum node using an HTTP or IPC connection. Developers use web3.js to send money, store data and deploy smart contract to the Ethereum network.

Regular users that have no coding experience can interact with the Ethereum network with either of these two ways:

• Metamask
• Mist

Metamask is simply a browser extension that allows people to interact with the Ethereum network. Whereas the Mist is a full blown web browser like Firefox and Chrome, only that it can be used to interact with Ethereum. Mist is still in development and Metamask is a much better option to work with Ethereum.

Installing Metamask

To install metamask, make sure that you have the Google Chrome Browser installed on your system. Then open the webstore and search for Metamask. Usually the very first search result is what we are looking for. It will look something like this:

MetaMask usually has a Fox icon. Click on the Add to Chrome button and the browser will automatically install the extension. You will then be asked to create a new Ethereum account by entering a new password. The Ethereum account allows users to transfer money and deploy smart contracts to the Ethereum account.

Once you are done creating the Ethereum account, you will get a 12 word pneumonic called “seed phrase”. It is unique for each Ethereum account and can be used to import your Ethereum related data into other systems. So keep it safe and private!

Finally you will get to see the main screen of your MetaMask account as shown below:

You will notice on the top right corner of the screen that there is a drop-down menu that is set to “Main Ethereum Network”. Click on it and you will see the following options.

MetaMask will set the Main Ethereum Network as default. It is the public network where the coins are worth actually money and we can deploy applications/smart contracts that can be used by anyone else in the world.

Ropsten, Kovan, and Rinkeby are test networks where people can test there applications/smart contracts and can even get free Ether coins! Don’t get too excited about that, because you will only be able to use them for testing purposes.

For the purpose of this post (and any other that I write in future), Let’s select the Rinkeby Test Network.

Ethereum Accounts

In the image shown below, you can see that MetaMask says “Account 1” on the left hand side of the page.

This would imply that you can create more than one account in MetaMask. You will also notice that there is a long string of alphanumeric characters right below where it says “Account 1”.

When you create an account in MetaMask, you told MetaMask to create three different things for you. An Account Address, a Public Key, and a Private Key. These three things are hexadecimal numbers and are unique for each account.

The Account Address is a unique identifier that you share with other individuals. But the public and private keys are a type of passwords for your account. The keys are used to authorize transfer funds to and from your account. If a person does not have the private key to the account, then they do not have complete access to any of the funds that are placed in the account. So make sure that you keep it safe and not share it with anyone else.

Receiving Ether

Open a new browser tab and go to faucet.rinkeby.io. This is the easiest way of getting Free Ether Coins in your account. Once again, these Ether coins are not worth anything in the world and can only be used for testing purposes.

Once you go to the URL mentioned above, you will see something like this:

So how does this website work?

All you need to do is send a tweet with your Ethereum account address inside it as shown below:

Replace the long string of 0s with your Ethereum account address. After publishing the tweet, copy the link to the tweet and paste it into the website above. The Faucet will then verify the tweet and if everything goes well, you will see some Ether coins in your account!

Don’t be fooled by the $326.30 USD displayed on the page. These Ether coins are still not worth anything in the real world. If you switch to some other test network or even the main network, the value of your coins will go back to zero.

Worth real money or not, we now have some Ether coins in our account. How is that? All we did was send a tweet.

When we sent the tweet’s URL link to the Rinkeby Faucet, it sent the URL to its backend server. The backend server then created a transaction object. This object contains all the data related to the agreement that we have made with the Faucet.

To Be Continued…

Let’s take a pause here since this post has gotten a little too long. In the next post, I will “talk” more about Blockchains, Smart Contracts, the Solidity Programming Language, and write a smart contract!

Thanks for reading this long post! I hope this post helped you understand Ethereum a little better. If you liked this post, then please do give me a few 👏 and please feel free to comment below. Cheers!

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