Ethereum Blockchain Infrastructure Explained: The Pros And Cons
The ethereum blockchain platform is an open-source, public, distributed computing, and operating system with smart contract features. This blockchain platform supports a highly modified version of the Nakamoto consensus through transaction-based state transitions. Ether is the token that is supported by the ethereum blockchain platform. Ethreum founder by name Vitalik Buterin who first described it in a white paper in the year 2013. Vitalik Buterin wrote the ethereum blockchain whitepaper with the goal of creating decentralized applications.
The ethereum founder previously worked with the Bitcoin Magazine, where he argued that Bitcoin needed a scripting language to enhance application development. Upon failing to gain support on his proposition, he left to develop the ethereum platform with a universal scripting language. The formal development of the Ethereum software project began in early2014 through a Swiss company called Ethereum Switzerland GmbH (EthSuisse).
The principal aim of this article is to help you understand the functionality, advantages, disadvantages, and applications of the ethereum blockchain technology. So, you shouldn’t freak out with the different technical terms you have been hearing. This article breaks it down so that you can understand the basics of the ethereum blockchain platform. read here for details of what is Blockchain
What is ethereum blockchain?
First, we start by understanding blockchain itself so that you can flow from there as efficiently as possible. For beginners, a blockchain is a digital ledger that is shared with lots of different computers. Once there is any transaction on the platform, it is recorded into the blocks. You need to know that no transaction will be successful if such a deal is not validated by a preset number of computers within the blockchain network.
It is very accurate that the ethereum blockchain is very similar to that of Bitcoin, but you need to know the key differences between the two. The similarity between Bitcoin and Etrherem blockchain is that both are shared a record of the entire transaction history. You should also be aware that every node on the network stores a copy of this history. The Ethereum blockchain is arguably the most significant open-source, decentralized platform that supports smart contract, decentralized applications, or Dapps.
When you compare ethereum vs. bitcoin, the significant difference is that the nodes of ethereum store the most recent state of every smart contract. What it means is that the ethereum network keeps track of the current information of all applications. This includes every user’s balance, all smart contract codes, and where they are stored. Still comparing Ethereum vs. Bitcoin, the later uses unspent transaction outputs to track the amount of Bitcoin every user has.
Features of Ethereum vs. Bitcoin Blockchain
While the Ethereum blockchain platform attempts to replace the internet intermediaries, Bitcoin blockchain aims to disrupt the online payment systems. Ethereum replaces all middlemen like servers and payment services with nodes. Put, nodes are computers of volunteers all around the world. Below are some of the features of Ethereum that differentiates it from Bitcoin:
Smart contracts originated from Nick Szabo that introduced it in 1993 when he put it in a vending machine. Though it is not a new idea, Ethereum has taken it to an entirely new level. With the Turing-complete programme, you can develop your smart contract. The most exciting thing you should know about these smart contracts is that they can do virtually everything.
For example, assuming you need a specified amount of money for charity funding, you can program the smart contract to collect the specified amount from donors. This is unlike what you see with many crowdfunding platforms around the world today. You need to know that there are some complexities to these smart contracts. Frequently, smart contracts need to stack on one another to successfully execute their task.
The above-mentioned task can be costly, depending on the number of stacking involved. Each smart contract requires transactions fees that need to be paid in Ether before it can be executed. Although the Ethereum smart contract is costly, your Ether is well spent due to the numerous benefits you enjoy on the platform. Such benefits include autonomy, backup, safety, trust, speed, savings, and accuracy.
· Decentralized Apps
In today’s world, people don’t have control over the data they release onto the internet or the web. With the decentralized apps (Dapps) of Ethereum, there won’t be any middleman. These Dapps directly connect users and source. When going through the Ethereum whitepaper, you will see that there are three types of Dapps. They have the ones that manage money, ones that involve money, and dApps that belong to the “other” category.
For instance, as a freelancer, you can make use of the first dApp to settle smart contract with a client by merely exchanging Ether. The second type of dApp is made of money and information from outside the Ethereum blockchain network. For the third type of dApp, it’s anything not under the first and second categories.
Some of the Ethereum dApps already in use include Golem, Melonport, and Augur. They are all decentralized applications. It will surprise you that these dApps have attained millions of dollars in market capitalization.
· Decentralized Autonomous Organizations (DAOs)
This is an organization that operates based on the principle of smart contracts. The objective of this application is to eliminate the need for third parties in any transaction whatsoever. According to the Ethereum founder Vitalik Buterin, DAOs can run with any human managerial activity. Such an organization like DAOs would be the ideal application for self-driving cars in the future.
With the working principle of DAO, it could program a smart contract that will enable the car to pick up a passenger, drop such passenger, accept payment, and then head to the nearest charging station to boost up and wait for the next passenger.
The above-listed features of Ethereum are just a tip of the iceberg to what this particular platform holds in stock for users like you.
This article is specifically to enlighten you on the Ethereum blockchain infrastructure and how it differs from that of Bitcoin blockchain. You can always do well to contact BlockchainGap for more research on the topic to also gain a piece of more comprehensive knowledge. I trust you have urged your reading as well as earned a good understanding of Ethereum blockchain.