Ethereum: 101
Tags: Cry, Africa, Smart Contracts, Startup, Ethereum

If you want to know what is Ethereum, how it works, and what it can be used for, without battling the whole crypto jargon, this is perfect for you.

Ethereum is a global, decentralized platform for money and new kinds of applications. On Ethereum, you can write code that manages the money, and build applications available anywhere in the world. Like other cryptocurrencies, it can be used for sending and receiving value globally and without a third party watching or stepping in unexpectedly.

Ethereum vs Bitcoin?

Beyond Bitcoin & first-generation decentralized applications, generally associated with Bitcoin, blockchain technology has many other applications that go way beyond digital currencies. In fact, Bitcoin is just one of the several applications that use blockchain technology nowadays.

Ethereum was first proposed in 2013 by developer Vitalik Buterin, who was 19 at the time and was one of the pioneers of the idea of expanding the technology behind Bitcoin, blockchain, to more use cases than transactions.

While Bitcoin was created with the goal of disrupting online banking and day-to-day transactions, Ethereum’s creators aim to use the same technology to replace internet third parties – those that store data, transfer mortgages, and keep track of complex financial instruments. These apps aid people in innumerable ways, such as paving a way to share vacation photos with friends on social media. But they have been accused of abusing this control by censoring data or accidentally spilling sensitive user data in hacks, to name a couple of examples.

The platform officially launched in 2015, turning the idea of Ethereum into a real, functioning network.

Historical Highlights

November 2013: Vitalik Buterin published the Ethereum white paper.

January 2014: The development of the Ethereum platform was publicly announced. The original Ethereum development team consisted of Vitalik Buterin, Mihai Alise, Anthony Di Iorio, and Charles Hoskinson.

August 2014: Ethereum ends their ICO and raises $18.4 million.

May 2015: “Olympic” the Ethereum testnet releases.

July 30, 2015: The first stage of Ethereum’s development, “Frontier” was released.

March 14, 2016: Homestead, the first “stable” Ethereum release, went out on block 1,150,000.

June 2016: The DAO hack happens and the $50 million worth of Ether, which was 15% of the total Ether in circulation back at the time.

October 25, 2016: Ethereum Classic forks away from the original Ethereum protocol.

October 16, 2017: The Metropolis Byzantium hard fork update happens.

February 28, 2019: The Metropolis Constantinople hard fork update happens.

In the simplest term, Ethereum is an open software platform based on blockchain technology that enables developers to build and deploy decentralized applications.

Like Bitcoin, ethereum is a distributed public blockchain network. Although there are some significant technical differences between the two, the most important distinction to note is that Bitcoin and Ethereum differ substantially in purpose and capability. Bitcoin offers one particular application of blockchain technology, a peer-to-peer electronic cash system that enables online Bitcoin payments. While Bitcoin is used to track ownership of digital currency (bitcoins), ethereum focuses on running the programming code of any decentralized application.

In Ethereum, instead of mining for bitcoin, miners work to earn Ether, a type of crypto token that fuels the network. Beyond a tradable cryptocurrency, Ether is also used by application developers to pay for transaction fees and services on the ethereum network.

There is a second type of token that is used to pay miners fees for including transactions in their block, it is called gas, and every smart contract execution requires a certain amount of gas to be sent along with it to entice miners to put it in the blockchain.

Ethereum FAQ

How is Ethereum different from Bitcoin?

Ethereum draws inspiration from Bitcoin. They are both cryptocurrencies. Ethereum uses the same technology behind Bitcoin, a blockchain, which uses a shared, decentralized public ledger to decentralize the network so it’s not under the control of just one entity.

But while Bitcoin is used primarily as a store of value, the idea behind Ethereum is to decentralize other kinds of applications and services, from social media networks to more complex financial agreements.

Why is Ethereum sometimes called a ‘world computer?

Many advocates see Ethereum as a “world computer” that could decentralize the internet.

With Ethereum, centralized servers are replaced by thousands of so-called “nodes” run by volunteers all over the world thus forming a “world computer.” The hope is that one day, anyone in the world will be able to use it.

What can I do with ether?

What can users do once they have ether?

Once you have ether, you can use it to fuel decentralized apps (often called “dapps”), which are often similar to apps we use today, except they aim to cut intermediaries out of the picture.

These Dapps are built from Ethereum smart contracts, code that automatically executes the terms of an agreement so that users don’t have to rely on a third party to enforce the rules.

Examples of decentralized applications include:

CryptoKitties : A game for collecting and breeding funny-looking digital cats. Ethereum’s innovation is that it allows users more control of their digital collectibles. For instance, the digital cat cannot be deleted, unlike in other games, where the collectibles only survive as long as the company that created them.

: A game for collecting and breeding funny-looking digital cats. Ethereum’s innovation is that it allows users more control of their digital collectibles. For instance, the digital cat cannot be deleted, unlike in other games, where the collectibles only survive as long as the company that created them. PeepEth : PeepEth is a decentralized Twitter alternative. Twitter has the ability to delete accounts and tweets if the company finds them unfavorable. PeepEth is different: although moderators keep the main feed free of spam and i nappropriate posts, “peeps” posted to PeepEth cannot be deleted.

: PeepEth is a decentralized Twitter alternative. Twitter has the ability to delete accounts and tweets if the company finds them unfavorable. PeepEth is different: although moderators keep the main feed free of spam and nappropriate posts, “peeps” posted to PeepEth cannot be deleted. DeFi: decentralized finance (DeFi) is the term for the array of financial applications built on top of ethereum.

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