What is Ethereum, and why should I care?
So if you are new to the cryptocurrency scene you may have heard about Ethereum, and have been wondering what is Ethereum? When I first found myself in this space it was quite a while ago, and Ethereum was really still very new.
What is Ethereum?
Many people are aking this question, and they are also wondering if you need to be a crypto nerd to understand it? I don’t think so, I’m not a crypto nerd, I don’t understand hashes, trees, any of this nonsense. I really only understand private key and public key encryption, and I just trust that it works because very smart mathematicians say that it does. Much like I trust that the internet works because very smart people say that it does.
Is Ethereum Bitcoin?
The first question I get asked often is “Is it Bitcoin?” You may be very surprised how many people do get this incorrect. Ethereum is not Bitcoin, they do share some very similar properties. Their similarities include; having a blockchain. Both Bitcoin and Ethereum have what you would call a blockchain. Bitcoin has the Bitcoin blockchain, and Ethereum has the Ethereum blockchain.
They both use a sort of token to pay for the usage of that blockchain, or network. On Bitcoin, the token in Bitcoin, on Ethereum, the token is Ether. So they are somewhat similar in the way that they work at their very core.
Does Ethereum do all the things that Bitcoin does?
Almost. Not absolutely everything. But it’s kind of safe to say ‘yes’ if you’re looking at this from an application developers perspective, yes, it pretty much does all the things that Bitcoin does.
Is Ethereum an Altcoin?
Is it then one of these coins that aren’t really that much different to Bitcoin in that it has some different properties that make it more useful for one thing rather than another? I would say that Ethereum is not an Altcoin.
Examples of Altcoins would be something like maybe, Litecoin, which until recently had no differences from Bitcoin, other than the block time. The main difference here is the speed at which new transactions can be sent to the network.
Dogecoin, may also be an Altcoin. Someone mentioned to me a few weeks back about the Vegan Initiative Coin, which did make my heart sink. But, if you’re a Vegan and you want to join the Vegan Initiative blockchain there’s a coin for you!
So what sets Ethereum apart from all these different blockchains?
What makes Ethereum worthy of all of your attention, and what makes Ethereum worth of an extensive blog post is that simply put, it’s a computer. That’s the easiest way to what Ethereum is in a very broad sense. It’s a computer that does computing stuff.
What kind of computer is Ethereum?
Why is Ethereum any different to say, the laptop that you have in front of you right now? Why is it different to a big server somewhere? Or a big rack of servers? Ethereum is a ‘singleton’ which means there is only one instance of the computer.
So imagine you have a laptop, and then imagine everybody using the exact same laptop at the same time. That’s Ethereum. Sounds like it’s not going to be very useful, but just hodl on…
Ethereum is decentralized, so there is no one big rack of servers running Ethereum and we’re all connecting to that one big rack of servers or one machine. It’s being run concurrently by machines all over the world.
At the time of writing this, I’m currently running a version of the Ethereum computer on my computer. I’m currently running an instance of Ethereum right now. But there are thousands if not, hundreds of thousands of other instances of Ethereum being run on thousands of different machines all over the world right now. But we’re all still running the same computer.
Ethereum is verifiable
What verifiable means is that given its current state and an input, you know what the output is going to be. That’s really extremely useful because it means we know when the thing doesn’t work.
Ethereum is also by nature atomistic, meaning that it never falls into a ‘broken’ state. It’s impossible for you to leave the Ethereum computer with some corrupted memory, somewhere. Because either a transaction completely succeeds, and everything goes through and the state is updated. Or, the transaction gest a part of the way through, and a little bit of it fails, then the whole thing is rolled back. So there’s no potential for leaving Ethereum in a broken state or having any problems arise because of that.
Ethereum is Multiuser
Ethereum is natively multiuser, which means there is no login, there is no one who is the gatekeeper to this system. There’s nobody saying that one person can have an account and another can’t. If you could run a very simple piece of code, a very simple algorithm to generate you a private key, you can have an account on Ethereum, you can start doing stuff, and interacting with projects; that’s really cool!
And, of course, the best thing about computers is that they are programmable. There’s no way that we would have ever got to where we are now without the ability to be able to program a computer. It’s just not possible.
So, Ethereum is a giant, single instance of a computer that is basically running everywhere in the cloud all at once, and you can program it to do whatever you want it to do. That’s insane!