Ethereum, in its most basic explanation, is a decentralized super computer running on blockchain technology. Unlike Bitcoin it offers up smart contract technology, which is code that can be executed in a transaction on the Ethereum blockchain. Therefore also unlike Bitcoin, Ethereum is meant to be a platform to be built on.
While that might be a bit of a loaded paragraph, we’ll break it down for you. The underlying technology is blockchain technology; an immutable ledger system which is decentralized over a network of “nodes” or individuals who maintain the network anonymously in order to validate the transactions taking place. These transactions are typically in currency but in the future will be physical products as well.
So that covers “decentralized” and “blockchain,” but what about “super computer?” Well as a network, participants are offering up their own computer’s capabilities as part of the bigger picture. What is that bigger picture? It’s the super computer-like nature of Ethereum.
This rolls up into Ethereum as a platform. New DApps (Decentralized Applications) can be built on the Ethereum network to help developers craft a variety of new applications that can help a number of different industries.
The Beginnings of Ethereum
The idea for Ethereum came from Vitalik Buterin, a programmer who had gotten involved with the Bitcoin development community back in 2011 through Bitcoin Magazine, a publication he co-founded. In the white paper detailing Ethereum, Buterin described the goal of wanting to build decentralized applications and argued that Bitcoin needed a scripting language to develop with in order to achieve that. Therefore, Solidity was created by the core contributing members of Ethereum.
How It’s Built (The Geeky Stuff)
Ethereum’s clients (the wallets and users of Ethereum and its tokens) are written in a variety of different languages but mostly in C++, Golang, Python, and Java. Those clients can all interact with the Ethereum network, as it is a protocol and not a piece of software.
As mentioned, Ethereum is also built in Solidity which is the scripting language that executes smart contracts. You could also consider Solidity as the main programming language. The code in those contracts is statically-typed, which is a safer way to execute code in the programming world but is also not as complex. Complexity is not really needed when coding if/then-type scripts, it needs to be safe and security.
While Ethereum (as in the Ether token) might not have a specific use-case by itself, its use in conjunction with DApps gives it almost endless use cases:
- Asset Permissions
- Escrow services
- Coin exchanges
- And more!
The Ethereum network and Ether token allows software applications to be built with Ethereum (using smart contracts) to secure its transactions, with Ether tokens as the “gas” to fuel them. This is where Ether tokens get their use case, it’s like a pass to the Ethereum blockchain that you must pay for when you’re using its ledger system or computational service.
Ethereum is a platform that is aiming to power a brand new industry of Decentralized Applications that seek to dismantle the centralized software platform as we know it. Ethereum has the chance to be as disruptive as Bitcoin in the future, if not more disruptive!
How To Buy Ethereum
With Ethereum being the number two overall cryptocurrency (at the time of writing this), it’s widely available online. Here’s how you can get some
- Head over to one of these currency-to-crytpo exchanges and purchase Bitcoin (Coinbase offers direct purchase of Ethereum in USD).
- Once you have your Bitcoin, send your Bitcoin to your wallet on a crypto exchange such as Poloniex, Kraken, Bitfinex, or GDAX to name a few. Here you can buy Litecoin or any other cryptocurrency being traded on that exchange.
- Download an Exodus.io wallet or go to myetherwallet.com or any other reputable wallet to store your Ethereum tokens to. Oftentimes the coin’s site will feature the best wallet for its currency.