What Is Ethereum?

What Is Ethereum?

In essence, Ethereum is a platform in the cryptocurrency market, which was launched in 2015 and helps create applications that are operated on blockchain. Although Ethereum popularity rose and declined within a year after its launch, it still holds the second position in the market after Bitcoin. But Ethereum comes with several factors that make it significant despite the changes, and here are some of the reasons why it is doing so well in the crypto market.

One of the things that make Ethereum stand toe to toe with the competition is that it is decentralized, just like Bitcoin, but the currency has the potential to be even more successful. The fact that it is decentralized makes it waterproof, since every participant doubles as both a server and a client, giving it resilience and security. This keeps hackers at bay, as well as ensuring no downtime in case technical difficulties. 

Besides, another aspect of blockchain that makes Ethereum strong is the integrity of data. In this case, anyone can access records of any transactions ever made on the network, and locate the sender and receiver. Not forgetting, the records cannot be altered, making them safe all the time. This strategy makes it impossible for someone to use coins that they don’t have, which makes it ideal for payment protocol.

However, some developers have noticed this efficiency is not only about an instance of one simple use since keeping a registry comes with added security and efficiency of blockchain. This comes down to domain names, business contracts, and records of ownership among other essentials.

Although developers have already tried producing new apps using the blockchain theory, both have proved inefficient. At first, the idea was to create an app on top of Bitcoin, but the script is incapable of solving problems that other programming languages would otherwise solve with ease. This means developers have to improvise to get the desired results. Another idea was to develop, launch, and promote an alternative chain, which means missing the opportunity to use the significant power that Bitcoin network has up its sleeve.

Hence, the option of running blockchain remains the only resort, but this is costly and cannot work for every app. Despite all the downfalls, Ethereum has apparently come up with an answer through the integration of proper and multi-purpose programming language to its blockchain.

This way, anyone can figure out any application, and all they have to do is code it, and the ETH network will execute the remaining process. The system will verify the output as well as distribute value between the participants, all by itself.

This simplicity but effective power makes Ethereum a decentralized and powerful server that can be used across the globe. The application is thus operating on a transparent basis since there are no central authorities offering the input, thanks to smart contracts that can get the job done instead. Better yet, the network packs enough power that is only limited by the level as well as the power of the computers connected to the network, which means there are no limitations to the entry.

As such, Ethereum can be considered to be a worldwide computer that can excel at creating cryptocurrencies with ease and other unlimited potential uses as well. There is a lot that can be done with the network; only the required results can determine how far participants can go. And it is in this aspect of endless opportunities where the promising future of Ethereum lies.

According to some, the idea of Ethereum was born in 2009, when Bitcoin became the first practical solution of decentralization. Undoubtedly, the success of Blockchain greatly influenced Vitalik Buterin, the man behind Ethereum. However, 2012 would be a more particular date. That is when Vitalik left the University of Waterloo to travel the world while participating in various cryptocurrency innovations. While on this trip, Buterin conceived the Ethereum idea; a crypto economically secured platform for creating any kind of decentralized application.

After that, Vitalik started drafting the Ethereum Whitepaper. The document justified the idea of a new crypto technology, stated its main principles, and possible applications. The whitepaper was published in 2013, and a month later, Buterin announced the beginning of Ethereum project during the Bitcointalk forum.

In his post, Vitalik said that he was working with Jeffrey Wilcke and Dr. Gavin Wood as principle core developers. Wood took the main part in Ethereum creation after Vitalik. His Yellow Paper (the formal specification of Ethereum Virtual Machine) was published in April 2014. Coding its very first practical implementation in seven programming languages, this was the development of the first prototype of Ethereum platform.

Just like Ethereum, Bitcoin is based on Blockchain technology, but this means nothing if it is not backed by the most powerful network in history.  Investors channeled millions of dollars into Bitcoin, using the money on trading, mining equipment, and technologies. Launching a network like that demands the same amount (or more) of effort. To kick-start a group of investors, miners, and developers, the Ethereum foundation chose to carry out a pre-sale of more than 60M digital tokens (Ethers). The campaign ended up being a major success.

Buterin, Wood, and Wilcke set up yet another legal entity to direct and oversee the Ethereum development process.  To maintain momentum, they released several enhanced Proof-of-Concept versions of the software. DEVCON-0 was the first event that was dedicated entirely to Ethereum, and it was conducted in Berlin by ETH DEV, in November 2014.

That is when Ethereum developers from all around the globe met to talk about the network’s scalability and security. Final, pre-launch preparations have started with the release of Olympic—the ninth and latest version of Ethereum Proof-Of-Concept code.

The developers have taken advantage of this opportunity to conduct a final security inspection of the network. They have contacted several companies to perform an audit of the code. More importantly, developers have announced the Ethereum Bounty Program: whereby, whoever finds any weaknesses in the Ethereum software will receive significant Bitcoin rewards.

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