WHAT IS ETHEREUM
What is Ethereum and what does it stand for
Computers have penetrated each aspect of our lives. They are automating many activities done by human beings. This is reducing the time taken to perform them. Like all software, Ethereum is also a piece of software. It is an open-source platform for distributed computing. It is based on the block chain. It features smart contract functionality.
Vitalik Buterin proposed this technology. It was brought out in the year 2013, when Mr. Buterin was working on crypto currency research and programming. The development of this platform was funded by an online crowd sale that occurred. This happened between July and August 2014. The system ‘premined’ 11.9 million coins for the crowdsale.
How does it work
This platform provides us with a decentralized Turing-complete virtual machine. This is called as the Ethereum Virtual Machine. Using this machine, one can implement scripts through an international network of public nodes. Every time ethereum works, it activates a network of thousands of computers. The activated computers are responsible for processing it.
Through Ethereum, one can modify contracts written in smart contract language into a ‘bytecode’ form. This is done so that the Ethereum Virtual Machine can read and execute the contracts. Thus, the working of Ethereum is an enigma in itself. Not only is the machine an enigma, but its working is also very special.
How is it created
Ethereal is similar to the Bitcoin in that it has a block chain structure like the latter. Some participants create this block chain structure and give it for validation to some others. The blocks form a chain by referring to the hash or the fingerprint of the previous block.
Ethereum is created in the form of tokens by mining. Five ether specimens are mined per block. Ethereum is looking into other methods for its creation; purists are trying to come to a consensus about the validity of the current transactions. However, until new methods are found to create Ethereum, mining is likely to hold the platform together.
The block chain system is so designed that it can use the nodes agreement to order transactions. This also helps it prevent fraud. The Bitcoin network orders transactions by putting them into designated groups called blocks. Each block has a definite amount of transactions. It also has a link to the previous block.
What is Ethereum used for
Ethereum, being an open source, public platform, provides a crypto currency token called as ‘ether’. This ether can be transferred between accounts. It can also be used to compensate the participating nodes for the computations performed. Thus, Ethereum is a technologically innovative currency, which can be easily transferred from one account to another.
It is very useful in countries, which rely heavily on digital payments. Therefore, it can be said that Ethereum is the currency of the future. Like the Bitcoin, Ethereum will also revolutionize the way business is conducted worldwide. However, for Ethereum to be successful, it will require a robust internet backbone.