What is Ethereum
Do the words Ethereum and Ether sound familiar to you? You may have seen articles about these common terms, wondering what the difference is. Before we go into what Ethereum is, let's ensure you understand the differences between Ethereum and Ether.
Introduction
Do the words Ethereum and Ether sound familiar to you? You may have seen articles about these common terms, wondering what the difference is. Before we go into what Ethereum is, let’s ensure you understand the differences between Ethereum and Ether.
Ethereum
Ethereum is an open-source decentralized platform designed to host smart contracts. The Ethereum blockchain can run any decentralized application’s programming code. Because of Ethereum’s true innovation, the Ethereum Virtual Machine (EVM), developers can create thousands of new applications that are unlike anything we’ve seen before.
Ether
Ether (ETH) is the token that powers the Ethereum network. It is used by application developers to pay for Ethereum network transaction fees and services. On Ethereum, you can use ETH as collateral to generate entirely different cryptocurrency tokens. Furthermore, you can lend, borrow, and earn interest on ETH and other ETH-backed tokens.
Ethereum vs. Ether
Ethereum is the blockchain that enables the development of apps and the exchange of digital assets, while Ether is the network’s native coin and the “fuel” for the entire system. For example, when a programmer creates an application, he must pay network usage costs known as “gas” in Ether. Similarly, if a user wants to send cryptocurrency to another user, he must pay this cost, which is not fixed. Miners, like Bitcoin miners, are responsible for keeping the system running by validating transactions. In exchange, they receive Ether prizes.
How was Ethereum created?
Vitalik Buterin, a Russian-Canadian programmer, created Ethereum in 2013. Buterin’s involvement with cryptocurrencies, on the other hand, dates back a few years. He discovered Bitcoin in 2011 while “searching for purpose in life,” according to his blog. Despite his expertise in programming (and his mother being a computer scientist), he initially saw little value in Satoshi Nakamoto’s discovery of Bitcoin.
After a while though, Buterin became enamored with technology and began participating in commercial ventures. He co-founded Bitcoin Magazine, a cryptocurrency news website, in 2012. That same year, he enrolled in a computer science program at the University of Waterloo in Canada.
In 2013, Buterin dropped out of college to travel the world and attended cryptocurrency events. During conversations with industry professionals, he understood that the Bitcoin blockchain might be used not only to move money over the internet without the intermediation of third parties but also to decentralize other parts.
He published the project’s original white paper in November, based on the BTC code. Several others expressed interest and offered to help, including computer scientist Gavin Wood, with whom he co-created the project. To acquire funds and effectively “create” Ethereum, the network held an ICO in July 2014, raising $18.5 million in just over a month. In July 2015, the Ethereum Blockchain was officially launched.
What is the importance of Ethereum?
Smart contracts
Smart contracts are digital contracts that use technology to ensure that accepted agreements are carried out. In other words, we can think of smart contracts as programming codes that define rigorous rules and consequences - much like a regular document, setting responsibilities, benefits, and penalties owed to the parties in certain conditions. The smart contract differs from typical contracts in that it is digital, cannot be lost or interfered with, and is self-executing. That is, it ensures the security of the agreement’s execution by utilizing blockchain technology.
Ethereum Smart contracts
Simply put, an Ethereum “smart contract” is a program that runs on the Ethereum blockchain. It is a set of code (its functions) and data (its state) stored at a single address on the Ethereum blockchain.
Smart contracts are an Ethereum account type. This signifies they have a balance and can be a transaction target. However, they are not managed by a user; instead, they are deployed to the network and run as intended. User accounts can then engage with a smart contract by submitting transactions that execute a smart contract-defined function. Smart contracts, like conventional contracts, can set rules and automatically enforce them through programming. Smart contracts are inherently irreversible and cannot be deleted by default.
Ethereum Ecosystem and Community
Ethereum is considered the infrastructure of the digital future, as it is the leading global platform that enables the programming of decentralized applications, smart contracts, and transactions of the Ether cryptocurrency and various tokens.
Among the main applications that use this infrastructure, there are decentralized applications (DApps), such as DEX (Decentralized Exchanges), DeFi (Decentralized Finance), and NFTs (Non-Fungible Tokens). Created in 2015, the Ethereum network shows exponential growth in terms of active developers, who act in the creation of new DApps. This was possible due to the revolutionary architecture that facilitates the development of several cryptocurrency projects. This enabled the development of DeFi, NFTs, and GameFi, among other prominent areas.
- DeFi: the set of financial services and products, such as loans, transfers, and payment systems, which run on a blockchain.
- NFT: a type of digital certificate, established via blockchain, which defines originality and exclusivity to digital goods. In a simplified way, an NFT linked to any digital item makes this item unique in the world, generating scarcity around the item and opening space for a market to settle in.
- GameFi: games that reward the performance of their players through cryptocurrency.
- Layer-2: a subset of Ethereum scaling solutions. A layer-2 blockchain is a new blockchain that extends Ethereum and inherits Ethereum’s security guarantees.
Conclusion
Now that you already know the basics of Ethereum and what’s around it, you are prepared to understand other relevant concepts related to it. In the next modules, we’ll cover the Ethereum Technology, the main ERC Token Standards and EIPs and all you need to know about the Ethereum Merge.
Highlights
Vitalik Buterin created Ethereum in 2013. The Ethereum blockchain enables the development of apps and the exchange of digital assets, while Ether is the network's native coin and the "fuel" for the entire system.
Smart contracts enable many applications to run their service on Ethereum. It brings many innovations, such as DeFi, NFT, and GameFi.
Ethereum has one of the strongest communities and ecosystems, and keeps growing. Its network effect attracts developers, builders and users to join this ecosystem.
Main Video
Related Articles
What is Ethereum
Do the words Ethereum and Ether sound familiar to you? You may have seen articles about these common terms, wondering what the difference is. Before we go into what Ethereum is, let's ensure you understand the differences between Ethereum and Ether.
Introduction
Do the words Ethereum and Ether sound familiar to you? You may have seen articles about these common terms, wondering what the difference is. Before we go into what Ethereum is, let’s ensure you understand the differences between Ethereum and Ether.
Ethereum
Ethereum is an open-source decentralized platform designed to host smart contracts. The Ethereum blockchain can run any decentralized application’s programming code. Because of Ethereum’s true innovation, the Ethereum Virtual Machine (EVM), developers can create thousands of new applications that are unlike anything we’ve seen before.
Ether
Ether (ETH) is the token that powers the Ethereum network. It is used by application developers to pay for Ethereum network transaction fees and services. On Ethereum, you can use ETH as collateral to generate entirely different cryptocurrency tokens. Furthermore, you can lend, borrow, and earn interest on ETH and other ETH-backed tokens.
Ethereum vs. Ether
Ethereum is the blockchain that enables the development of apps and the exchange of digital assets, while Ether is the network’s native coin and the “fuel” for the entire system. For example, when a programmer creates an application, he must pay network usage costs known as “gas” in Ether. Similarly, if a user wants to send cryptocurrency to another user, he must pay this cost, which is not fixed. Miners, like Bitcoin miners, are responsible for keeping the system running by validating transactions. In exchange, they receive Ether prizes.
How was Ethereum created?
Vitalik Buterin, a Russian-Canadian programmer, created Ethereum in 2013. Buterin’s involvement with cryptocurrencies, on the other hand, dates back a few years. He discovered Bitcoin in 2011 while “searching for purpose in life,” according to his blog. Despite his expertise in programming (and his mother being a computer scientist), he initially saw little value in Satoshi Nakamoto’s discovery of Bitcoin.
After a while though, Buterin became enamored with technology and began participating in commercial ventures. He co-founded Bitcoin Magazine, a cryptocurrency news website, in 2012. That same year, he enrolled in a computer science program at the University of Waterloo in Canada.
In 2013, Buterin dropped out of college to travel the world and attended cryptocurrency events. During conversations with industry professionals, he understood that the Bitcoin blockchain might be used not only to move money over the internet without the intermediation of third parties but also to decentralize other parts.
He published the project’s original white paper in November, based on the BTC code. Several others expressed interest and offered to help, including computer scientist Gavin Wood, with whom he co-created the project. To acquire funds and effectively “create” Ethereum, the network held an ICO in July 2014, raising $18.5 million in just over a month. In July 2015, the Ethereum Blockchain was officially launched.
What is the importance of Ethereum?
Smart contracts
Smart contracts are digital contracts that use technology to ensure that accepted agreements are carried out. In other words, we can think of smart contracts as programming codes that define rigorous rules and consequences - much like a regular document, setting responsibilities, benefits, and penalties owed to the parties in certain conditions. The smart contract differs from typical contracts in that it is digital, cannot be lost or interfered with, and is self-executing. That is, it ensures the security of the agreement’s execution by utilizing blockchain technology.
Ethereum Smart contracts
Simply put, an Ethereum “smart contract” is a program that runs on the Ethereum blockchain. It is a set of code (its functions) and data (its state) stored at a single address on the Ethereum blockchain.
Smart contracts are an Ethereum account type. This signifies they have a balance and can be a transaction target. However, they are not managed by a user; instead, they are deployed to the network and run as intended. User accounts can then engage with a smart contract by submitting transactions that execute a smart contract-defined function. Smart contracts, like conventional contracts, can set rules and automatically enforce them through programming. Smart contracts are inherently irreversible and cannot be deleted by default.
Ethereum Ecosystem and Community
Ethereum is considered the infrastructure of the digital future, as it is the leading global platform that enables the programming of decentralized applications, smart contracts, and transactions of the Ether cryptocurrency and various tokens.
Among the main applications that use this infrastructure, there are decentralized applications (DApps), such as DEX (Decentralized Exchanges), DeFi (Decentralized Finance), and NFTs (Non-Fungible Tokens). Created in 2015, the Ethereum network shows exponential growth in terms of active developers, who act in the creation of new DApps. This was possible due to the revolutionary architecture that facilitates the development of several cryptocurrency projects. This enabled the development of DeFi, NFTs, and GameFi, among other prominent areas.
- DeFi: the set of financial services and products, such as loans, transfers, and payment systems, which run on a blockchain.
- NFT: a type of digital certificate, established via blockchain, which defines originality and exclusivity to digital goods. In a simplified way, an NFT linked to any digital item makes this item unique in the world, generating scarcity around the item and opening space for a market to settle in.
- GameFi: games that reward the performance of their players through cryptocurrency.
- Layer-2: a subset of Ethereum scaling solutions. A layer-2 blockchain is a new blockchain that extends Ethereum and inherits Ethereum’s security guarantees.
Conclusion
Now that you already know the basics of Ethereum and what’s around it, you are prepared to understand other relevant concepts related to it. In the next modules, we’ll cover the Ethereum Technology, the main ERC Token Standards and EIPs and all you need to know about the Ethereum Merge.
Highlights
Vitalik Buterin created Ethereum in 2013. The Ethereum blockchain enables the development of apps and the exchange of digital assets, while Ether is the network's native coin and the "fuel" for the entire system.
Smart contracts enable many applications to run their service on Ethereum. It brings many innovations, such as DeFi, NFT, and GameFi.
Ethereum has one of the strongest communities and ecosystems, and keeps growing. Its network effect attracts developers, builders and users to join this ecosystem.
Main Video
Related Articles