Ethereum is a global open-source, blockchain-based, decentralized software platform launched for money and new applications using its own cryptocurrency, ‘ether.’ Being decentralized means, ethereum is entirely autonomous, open to everyone but cannot be controlled by a single entity, government, or a person.
In 2013, Vitalik Buterin’s vision to create a “World Computer” was published under the ethereum whitepaper that triggered the development of ‘ethereum’ after a year. The idea is to reinvent the working of the internet, without the involvement of controlling third parties (such as Microsoft & Google) to create a vast network of private computers that runs smoothly with future internet applications. Based on Blockchain technology, it allows the developers to create and publish next-generation decentralized applications & smart contracts that are accessible globally.
What is Ethereum Smart Contract?
A smart contract is a regular computer program that runs on the Ethereum blockchain that works to exchange valuable assets between two participating parties. It’s a well-executed contract term, more like a protocol defining provisions and penalties around an agreement. In contrast to traditional contracts, Ethereum smart contracts manage all the obligations through an escrow-like account and secure them on the blockchain’s records so that it can’t be altered.
Following this channel, smart contracts allow parties to maintain an anonymous identity while making a binding, transparent agreement. The information shared or value transferred between these parties will be written as a code into the blockchain and held secured inside the smart escrow contract.
Why do you need Ethereum?
Today, centralized systems rule almost all the software applications that control individual user operations and information flow from a single center. In this system, these applications’ users are merely dependent on one single power to send and receive transmitted information. Even the user’s data, financial information, or accessed activities are primarily stored on the other’s computer servers and cloud systems owned by big shot companies like Google, Facebook, Paypal, etc.
Anyone accessing the centralized software knows the dark side of the system, including specific issues; silo effect, data corruption, single point of control & failure, and performance bottleneck.
The solution to all these rising problems is nothing but decentralized applications;
The role of decentralized applications is to provide a secure network followed by a blockchain system ignoring a centralized backend. Dapp implements “Decentralized applications” whose applications, tools, and programs work on the decentralized Ethereum Blockchain. This gives the user control over their data by eliminating the need for centralized systems to manage anyone’s data and secures the information.
What can Ethereum be used for?
Ethereum is a whole new network that can challenge other existing apps through its extensive capabilities owning a personal coding language, internet browser, and payment system. Smart contracts of Ethereum enabled developers to create integrated applications that are accessible globally (such as dApps on Ethereum Blockchain).
These apps are based on the blockchain network that doesn’t require the governance of central authorities. Most importantly, it provides users with the Ethereum Virtual Machine (used for understanding the smart contract’s language), serving a runtime environment for smart contracts. The users can efficiently execute an untrusted & unreliable code with the security that any of the programs executed won’t interfere with one other.
Conclusion: Even after intelligent designing, Ethereum met a healthy skepticism on its applications and usage. Many oppose the idea of calling Ethereum “ world computer” as for now, it can’t support several users disrupting on-going centralized platforms, including Facebook, Google, and others. However, the advanced version Ethereum 2.0 launched last year has focused on resolving these scalability issues.