Ethereum is a smart contract system that runs on the Ethereum network. Smart contracts are contracts in computer code that can be written. They are self-executing, because once you decide to do something with the money, it has to happen. In the case of Ethereum, you can write smart contracts about transactions, contracts between two parties, and other types of contracts.
Ethereum a fully decentralised, permissionless, public ledger on the blockchain. Every user in the world can update the record of the block and every transaction that has ever taken place. They don’t have to register on the network, they just have to use a Smart Contract to update the record on the blockchain. Every Smart Contract has its own cryptographic signature, which makes it immutable.
This means that there is no third party mediator who will control the system, who can change the rules mid way and who can check the authenticity of the data. The record will remain unaltered and will be available for anyone to access.
Users are not required to store any private information on the Ethereum blockchain and it is also impossible to trace the identity of a particular user. Any data that can be found on the Ethereum blockchain can be traced, if required, but this information cannot be a guarantee of identification.
In the Ethereum system, there is no central authority like a bank, nor an auctioneer, who will organise the transactions. The execution of the Smart Contracts is done by the Ethereum Virtual Machine (EVM), a kind of programmable computer that executes the Ethereum blockchain.
The EVM is the entity in the system that is in charge of managing the transactions in the system and allowing the creation of Smart Contracts.
Ethereum, sometimes called the “Revolutionary Development of Cryptocurrencies”, is a blockchain platform created and developed by an open-source community of developers and enthusiasts. The platform runs its own cryptocurrency, called Ether, and a software application framework that provides solutions for other applications built on top of the platform. Ethereum currently has an annual community budget of $2.5 million.
Why Use Ethereum?
The Ethereum platform has several advantages that would appeal to high-tech users in almost every industry.
Ethereum’s platform is open source and available on Github.
Ethereum is also running on a smart contract platform called Etherium. You can find a detailed explanation of the Ethereum smart contract here.
Ethereum allows for the development of decentralized apps (or dapps). Such apps and dapps have their own set of underlying protocols and software which themselves are Ethereum dapps.
Because it’s built on top of the blockchain, a blockchain-based platform, every app is decentralized and no single organization has control over the platform and its protocols.
To run a dapp, all you need to do is download and install the appropriate client, install Etherium and Ethereum-based dapps on your machine, and get going.
The use of blockchain in smart contracts technology provides companies with the opportunity to start creating applications that integrate both applications in a seamless and transparent way. This makes them less susceptible to risk because it makes them independent of the platform itself.
Blockchain-based applications also can be integrated with both enterprise systems and enterprise apps. In fact, ethereum has some applications that can be easily used in companies. For example, Ethereum can be used to issue shares and transfer funds among partners and customers.
According to a paper published by Finney.com, “Ethereum is becoming the platform of choice for blockchains as it enables sharing of value by creating platform capabilities as a separate field of the Ethereum protocol, in contrast to Bitcoin which can only be used for clearing and settlement.”
A large number of partners that need to work together to process the transactions are better at detecting problems quickly. They can solve problems faster than one single company. According to Huseyin Bagci, a professor at the University of Dundee, “the speed at which nodes work and the speed at which they respond to feedback is something we have not seen in other ways of managing software.”
The decentralized structure and transparent nature of blockchain technology make it easy to customize the platform for the exact requirements of an individual company. According to a Fortune Magazine article, “One benefit of blockchain is that you’re no longer confined to the protocol’s standard design.”
Date of last update: 27. May, 2021