When we think of cryptocurrencies and the technology that surrounds them, we immediately think of bitcoin and its rapid rise to be the most value cryptocurrency available. However, bitcoin itself isn’t what makes it valuable, it is as mentioned before, the technology that surrounds it. Of course I’m talking about blockchain technology, although it is commonly associated with bitcoin, it has many other applications that go beyond digital currencies. Bitcoin is only one of countless applications that utilises blockchain technology. In the early days, in order to build stable blockchain applications, it has required a high level of knowledge in fields such as coding, cryptography, mathematics, as well as many other areas. Nevertheless, as technology has progressed, developers are now able to build complex applications easier and faster than ever, providing that they have resources available to do so.
Unlike bitcoin which is a peer-to-peer network that allows for electronic transactions between individuals via a decentralised public ledger. Ethereum is an open software platform that is based on blockchain technology, which allows developers to build and release decentralised applications. Ethereum is similar to bitcoin in the sense that it is a distributed public blockchain network, although there some major differences. Probably the most crucial aspect is the fact that bitcoin and ethereum have different purposes and capabilities. As mentioned before, bitcoin is a peer-to-peer electronic cash system, while the blockchain is heavily focused on running any decentralised application.
Where miners on the bitcoin blockchain will mine for bitcoin, ethereum miners work to obtain Ether, which itself is a type of cryptocurrency that fuels the network. Ether is more than simply a cryptocurrency, it is mainly a source of currency used by application developers to pay for transaction fees and a host of services on the ethereum network.
Ethereum is most famous for being able to run smart contracts, which put simply, is just a bunch of computer code that can expedite the exchange of things like money, content, even property, and anything that has value. When you run a smart contract on a blockchain network, it operates as a self-operating computer program that will execute its given commands only when certain conditions have been met, and because these contracts run on the blockchain, they will operate exactly as they have been programmed without the need for any intervention from third parties.
Like Don Tapscott said about Ethereum:
“The ethereum blockchain has some extraordinary capabilities. One of them is that you can build smart contract. It’s kind of what it sounds like. It’s a contract that self-executes, and the contract handles the enforcement, the management, performance and payment”
Ethereum has more of a professional acceptance, rather than peer-to-peer payment network, ethereum will help to revolutionize the healthcare system, with the use of smart contracts. One idea that has been conceived is allowing doctors to view patient records from anywhere in the world. What I mean by this is if you originate from the United States and you were on vacation in Asia, and you fell ill, a doctor would be able to view your patient records on the blockchain network, with the use of smart contracts to facilitate the transaction of private information. Not only would the doctor be able to look at your records, but they would be able to update the record with new information pertaining to your visit, all while updating the blockchain. In fact, ethereum can turn any centralised service into a decentralised service, thus removing the need for countless third party services that currently exists across hundreds of different industries.
Ethereum does still have some of the same characteristics as bitcoin, in the sense that no one can control any aspect of its blockchain network, as it is totally decentralised. No single authority owns the network, but more like everyone on the network owns the network, as it is consensus driven. It is also secure, with no central point of failure and it is secured with the use of highly advanced cryptography, so applications are protected against hackers and malicious activity.
Despite ethereum’s best efforts to be a fully functioning blockchain-based system, it is still subject to some faults. Because the smart contracts that run on the network are written by humans, they can subject to human error, and are only as good as the people who create them. Because they are inclusive on the blockchain network, there is no efficient way to stop or prevent an exploitation in the code, other than to bring the network to a consensus and rewrite the underlying code within the contract. This sort of action can be extremely troublesome, because the size of these network can absolutely huge, there’s no guarantee that you will achieve consensus in order to fix the initial problem.
For all it’s worth, ethereum will revolutionize the way we do things in the future, and so the best thing to do would be embrace the change when it occurs. Then, and only then can we collectively work together to build better applications for the future, to help resolve more issues.