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Introduction to Ethereum

Table of Contents

What is Ethereum? #

Ethereum is a blockchain APP platform, which is similar to the blockchain version of Android and iOS. It is a global open-source platform for decentralized applications (DApps). The name comes from Ether and the suffix “reum” (Meaning “oil” in Greek).

Ethereum is a decentralized, self-consistent economic system that can run transferable computation and data. It is a decentralized blockchain platform for building DApps. Ether is the cryptocurrency used by the platform.

It also makes it easy to create smart contracts that execute code on their own, which developers can use to handle a variety of applications. All smart contracts on the Ethereum network are written in the Solidity programming language.

It has been recognized by developers and giants for its unique programmable design. There are thousands of Ethereum -based APPs and digital currencies around the world so far; in 2017, more than 20 well-known companies, represented by JP Morgan, Microsoft and Intel, even jointly established the “Enterprise Ethereum Alliance”. More than 150 companies and organizations have joined this alliance so far. More than 150 companies and organizations have joined this alliance.

How does Ethereum work? #

The structure of the Ethereum blockchain is very similar to that of Bitcoin, as it has a shared record of the entire transaction history. Each node on the network stores a copy of this history.

The major difference between Ethereum and Bitcoin is that, in addition to all Ethereum transactions, its nodes store the latest status of each smart contract. For each Ethereum application, the network needs to keep track of the “state” or the current information of all these applications, including the balance of each user, all smart contract codes, and their storage locations.

What is the difference between Ethereum and bitcoin? #

Like Bitcoin, Ethereum uses the Proof of Work (POW) mechanism to keep the blockchain secure and generate new Ether through mining by miners. The difference is that Ethereum is a programmable blockchain that allows anyone to create decentralized APPs, write smart contracts and issue their own digital currency (tokens) on it.

Unlike Bitcoin’s definition of cryptocurrency, Ethereum unleashes the blockchain’s unprecedented potential through a series of redesigns, including an EVM (Ethereum Virtual Machine), an account system on which smart contracts can be run. The concept of smart contracts was introduced by Nick Szabo in 1997 as a form of automatically executing contracts.

Over the years, while the Bitcoin protocol has also supported smart contracts by using layer 2 solutions, smart contracts have gained popularity through the hands of Vitalik Buterin, co-founder of Ethereum.

What are the advantages and disadvantages of Ethereum? #

Advantages:

  • Ethereum allows users to use a full programming language on the blockchain to execute more complex smart contracts on the network without relying on any third-party services
  • Ethereum can provide a robust ecosystem for other product and service platforms
  • Ethereum has a strong development roadmap (3-5 years), which means the community has clear criteria for what to expect in the coming years
  • There are many companies involved in improving the foundation beyond Ethereum. Between the Ethereum Enterprise Alliance (EEA) and the Hyperledger team approving its first Ethereum project, there are dozens of corporate organizations working on an improved ecosystem for Ether. Other than Bitcoin, no other blockchain has received such strong support from the business community

Disadvantages:

  • Since Ethereum is a platform, it will never be as effective as others specifically designed to be cryptocurrencies. Bitcoin is only really a ledger, but Ethereum is trying to be a ledger/supercomputer/smart contract generator/etc. for a wider range of users. This complexity gives it flexibility, but it has not been deeply optimized for any of the above use cases.
  • Can you write something here about the scalability issues Ethereum is currently facing?
  • Some of the major upgrades to Ethereum include moving proof-of-work to a proof-of-stake platform due to the Ethereum development path. If this transition does not go smoothly, it could introduce some critical issues in the architecture and cause the system to crash. It is believed that the Ethereum team can ensure that this does not happen, but it is a risk.
  • The lack of tutorials or documentation to help developers is a serious barrier to becoming an Ethereum developer. Most of the tutorials you search for are outdated, or teach only a conceptual understanding of the technology, or are just a basic “hello world” tutorial without any substance.
  • One of the core problems with the Ethereum platform has been scalability compared with other similar blockchains such as fantom, avalanche, binance smart chain, etc.. As more and more decentralized apps use the platform, and transactions increase exponentially, so do the gas fees. In other words, if there are too many users on the blockchain, it gets more expensive to buy and sell things.

Conclusion #

Ethereum extends blockchain technology on the basis of digital currency, proposes the grand idea of creating a more universal smart contract platform, and builds an open source ecosystem with Ethereum as the core based on open source technology.

Updated on October 31, 2021
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