Over the past few years, digital currencies in the form of cryptocurrencies have experienced a rising trend in popularity. Bitcoin, the first and most well-known cryptocurrency, has paved the way for the development of other cryptocurrencies, one of which is Ethereum. Ethereum is not just a digital currency, but it is also a platform for creating decentralized applications, also known as dApps. In this article, we will explore what Ethereum is and how it works.
What is Ethereum?
Launched in 2015, Ethereum is an open-source, decentralized blockchain platform. It was created by Vitalik Buterin, a Russian-Canadian programmer who was just 21 years old at the time. Like Bitcoin, Ethereum is based on blockchain technology, which means that it is a decentralized system that is not controlled by any single entity. Rather than being verified and processed by a single entity, transactions are authenticated and executed by a global network of computers.
One of the key differences between Ethereum and Bitcoin is that while Bitcoin was designed to be used as a digital currency, Ethereum was designed to be a platform for creating decentralized applications. These applications are built on top of the Ethereum blockchain and are known as dApps. Developers can use Ethereum to create a wide range of applications, from games and social media platforms to financial applications and more.
How does Ethereum work?
Like Bitcoin, Ethereum is based on blockchain technology, which means that transactions are verified and processed by a network of computers around the world. However, Ethereum’s blockchain is more advanced than Bitcoin’s, as it allows developers to create their own decentralized applications on top of the platform.
Ethereum uses a programming language called Solidity, which allows developers to write code for their decentralized applications. These applications are then deployed on the Ethereum blockchain, where they are executed by the network of computers around the world. Each computer on the network has a copy of the Ethereum blockchain, and they all work together to verify and process transactions.
Ethereum’s smart contract functionality is a significant aspect of the platform, which enables the creation of self-executing contracts that can automatically execute based on predefined conditions. For example, a smart contract could be programmed to automatically release payment to a seller once the buyer has received their product and confirmed that they are satisfied with it.
Smart contracts are built on top of the Ethereum blockchain and are stored in the blockchain’s code. They are designed to be tamper-proof and are executed automatically, without the need for intermediaries like banks or other financial institutions.
To summarize, Ethereum was introduced in 2015 as an open-source blockchain platform that operates in a decentralized manner. It was designed to be a platform for creating decentralized applications, or dApps, and is built on top of blockchain technology. Ethereum allows developers to create a wide range of applications, from games and social media platforms to financial applications and more. Its smart contract functionality allows for the creation of self-executing contracts that are tamper-proof and do not require intermediaries. Ethereum is an exciting development in the world of cryptocurrencies and blockchain technology, and its potential uses are still being explored.