What is Ethereum?
Ethereum in reality does not represent only the cryptocurrency that we all know, but a real open source platform that uses blockchain technology to create and run decentralized digital applications, or “dapps” that allow users to enter into agreements and conduct transactions directly with each other to buy, sell and trade goods and services without an intermediary. For example, users can do without banks to transfer money, a lawyer to draw up a sales contract, and they can launch their own fundraising site, rather than going through a crowdfunding website.
How does Ethereum work?
Ethereum operates via a global network of computers that work together like a supercomputer. The network assembles and executes “smart contracts“, i.e. applications that are, by design, independent of any third party interference or censorship. All transaction data is stored in individual blockchain registers, and not in some centralized server, so it is practically impossible for the system to be compromised: users have total control of their data.
What is Ether?
Running the computers that run the code to power the dapps is expensive and consumes a lot of power, so Ethereum has created Ether – its own cryptocurrency – to incentivize programmers to run the Ethereum protocol on their computers. Those programmers are compensated in virtual Ether coins for contributing their own resources to the project and writing quality applications, so that the network remains sane. Furthermore, just as Bitcoin “miners” are paid to keep the Bitcoin blockchain running, solving computational problems that allow transactions to be added to the public ledger, developers use Ether to activate smart contracts on the Ethereum platform..
Why was Ethereum created?
Ethereum was devised by 19-year-old Russian-Canadian Vitalik Buterin, whose intent was to build on the technology that powered Bitcoin’s digital currency and use it to democratize organizations, businesses, currencies, and even empower users to create “one’s country with an immutable constitution”: that is, to put decision-making – and economic control – in the hands of individuals rather than centralized organizations.
In 2013 Buterin published a white paper outlining his ideas for Ethereum, receiving the prestigious Thiel Scholarship for his work, along with a $ 100,000 award. His ideas attracted other developers such as co-founder Dr. Gavin Wood and Joseph Lubin, who joined him in launching a crowdfunding campaign in July 2014.
Ethereum raised $ 18 million in a crowdsale that was the most successful of its time. Its first platform, Frontier, was launched in July 2015.
Here are some useful resources to learn how to exploit Ethereum, which really can offer enormous potential to those who are able to understand its mechanisms.