Ethereum is a decentralized network driven by the use of smart contracts. Those that support the network hope it can bring decentralization and democracy to the internet.
Vitalik Buterin is widely known as the creator of the Ethereum network. Born in Russia, Buterin moved to Canada as a young boy, only to discover that he was talented when it came to computers and mathematics. After finding interest in the Bitcoin network, he started his career in crypto working with Bitcoin Magazine. This fascination with digital coins led to the creation of his Ethereum white paper in 2013.
The Ethereum Project was initially created to erase third-party involvement with personal data. Some pieces of personal data that are currently stored on third-party websites are:
- Usernames and passwords. Companies keep your usernames and passwords stored, and sometimes they are stored less securely than they should be. Hackers can gain access to this information to take advantage of all the inward-facing information displayed within your account.
- Phone numbers. If you have had to input your phone number for validation or so a company can contact you, they have stored this data via low-cost specialists. These low-cost specialists do not necessarily specialize in strong methods of security.
- Credit card numbers. If you have saved your credit card number to make purchases easier, this information is accessible by any hacker able to take advantage of vulnerabilities on the internet.
- Purchases. Your purchase history is oftentimes stored by the aforementioned third parties. In some cases, if you agreed to it in the terms and conditions, your purchase history can even be provided to other parties as well.
- Home addresses and billing addresses. Whenever you enter and save your shipping information, that data is stored in a cost-effective manner. Skilled hackers can access this information if there are any vulnerabilities.
- And more. If you have had to enter your social security number, mortgage information, driver's license number, or any other heavily personal information, it is likely that it is not stored as securely as it should be.
The Ethereum Project hopes to decentralize the client-server model to better protect internet users from common practices used by popular websites.
In order for the Ethereum network to work, the "World Computer" must exist. By using the Ethereum Virtual Machine (EVM), a Turing-complete virtual machine, scripts can be executed using nodes run by volunteers all over the world. These nodes create the World Computer, essentially subtracting traditional clouds and servers from the equation.
Programming smart contracts is an important component of the Ethereum ecosystem. First proposed as a concept by Gavin Wood in 2014, a programming language called Solidity became adopted by an entire team working on the Ethereum Project. Christian Reitwiessner was assigned to lead the team, specializing in the programming language and how it could be developed into the Ethereum ecosystem. Solidity is designed to encourage developers to compose unique smart contracts to better business within the world of crypto technology, making it a pertinent asset to the Ethereum Project. Because it is geared towards smart contract design, it is a relatively easy-to-use language within its own environment.
Four programming languages are designed specifically for the Ethereum Virtual Machine, including:
These languages work directly with the EVM, allowing room for the Ethereum Project to grow and adapt.
The Ethereum Project encourages creative control by putting power in the hands of the author. The creator of any project piggybacking off the Ethereum network would fully control the data.
In contrast, existing companies that allow projects to use their platform usually store and control the data themselves. This means that if a platform is banned, the information stored on the platform can become unavailable or lost. When this centralized approach to creativity is avoided, there is more room for concepts to come to life without the risk of sudden disappearance.
Ethereum transactions are fast and reliable. To assure that a transaction is successful, the network will deduct what is called gas. Gas pushes transactions through by deducting a small amount of ether, the digital asset associated to the Ethereum network. This small amount of ether is oftentimes represented in Gwei, which is a fraction of one ether.
The Hard Fork
A decentralized autonomous organization referred to as the DAO raised a significant amount of money to crowdfund its set of smart contracts. Unfortunately, this 2016 event led to the DAO being compromised and an unknown entity took the funds. This led to a split in ideologies between developers of the Ethereum network. Many wanted a hard fork to assure that the funds were distributed correctly, but not everyone agreed. Ultimately, this debate led to the fork between Ethereum and Ethereum Classic.
- Ethereum Mainnet uses proof-of-stake, but this wasn't always the case.
- The upgrade from the original proof-of-work mechanism to proof-of-stake was called The Merge.
- The Merge refers to the original Ethereum Mainnet merging with a separate proof-of-stake blockchain called the Beacon Chain, now existing as one chain.
- The Merge reduced Ethereum's energy consumption by ~99.95%.
Learn from the Source
If you are interested in learning more about the Ethereum network, you can learn more directly from the source on the Ethereum website.