What is Ethereum? | ETH Basics Video – Crypto College by Advantage Blockchain
Welcome to Crypto College, the easy, affordable way to learn about blockchain and cryptocurrencies online. This lesson is about Ethereum Basics to help you answer the question: What is Ethereum?
Ethereum is a global, blockchain based, open-source platform for decentralized applications. Ethereum is a decentralized (nodes exist all over the globe), permissionless (anyone can use) payment network with additional capabilities. Ethereum uses the Ethereum Virtual Machine, a system designed to operate as a runtime environment for Ethereum based smart contracts. On Ethereum, you can write code that controls digital value, runs exactly as programmed, and is accessible anywhere in the world. In the simplest terms, Ethereum is programmable money.
Ethereum was founded by developer Vitalik Buterin. Buterin had a vision for the first currency-integrated global supercomputer, and needed funding to see the protocol to fruition. Because of this, there was a massive crowdsale conducted which accepted Bitcoin as payment for Ether (Ethereum native currency) when the network went live. Initially, the going rate was 1 bitcoin for 2000 Ether. At launch 72 million Ether were created and given to early investors. Since Ether was a required to participate in the network, Ether was deemed not a security from a regulation standpoint. It was deemed to have utility beyond the requirements representative of a security. The crowdsale saw instant success and set up the ground work for the future ICO model.
Ethereum is essentially the missing value layer for the internet. With Ether anyone around the world can transact value without a trusted 3rd party. Also, Etheruem’s network has the Ethereum Virtual Machine, which is a decentralized ecosystem for building applications on top of Ethereum.
Ethereum produces a new block every 14–15 seconds, which rewards the winning miner 2 Ether per block mined. Ethereum uses an Account model to verify transactions and balances on-chain whereas Bitcoin uses an unspent transaction output model. Several standards have been created by various groups to help developers and businesses create value on Ethereum. A couple of these are ERC-20 tokens and ERC-721 NFT’s (or non-fungible tokens). ERC-20 is the standard behind an ICO token, where NFT’s assign a digital identity to something. An example of an NFT would be crypto kitties or a piece of digital art on the Ethereum blockchain. We’ll be diving into ERC-20 and ERC-721’s in a later video/class.
Ethereum today exists for two main purposes; crowdfunding through ICO’s and Open Financial tools for corporations, investment firms, and individuals. Both have given the average retail investor the opportunity to invest in something otherwise not possible.
For Ethereum to really be successful it needs to be not only decentralized, transparent, and secure but also needs to be scalable. Currently it can not scale to accommodate a global market place. That is what ETH 2.0 plans to accomplish. ETH 2.0 should solve scalability issues with moving to proof of stake. We’ll be discussing Proof of Stake in a later lesson.
Several groups have invested time and money into Ethereum’s success. The Ethereum Enterprise Alliance was formed in early 2017, which consists of Fortune 500 companies, blockchain startups, and research groups. The Ethereum Foundation was created as a nonprofit in 2015 to help see through the crowdsale and early development of Ethereum. Consensys is a company created by Etherum Co-Founder Joseph Lubin. Their goal is to implement working standards for developers and companies to use as well as creating a rich ecosystem for anyone who wants to get involved to easily do so. Ethereum has the backing, and technology to impact many industries on many levels, but most specifically to act as a payment model and a decentralized internet.
Published at Tue, 01 Oct 2019 17:35:19 +0000
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