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Ethereum Explained Simply

What Is Ethereum? A Guide To Ethereum Explained Ethereumprice

What Is Ethereum? A Guide To Ethereum Explained Ethereumprice

One of Ethereums most well known creators, Vitalik Buterin describes Ethereum as a world computer. Ethereum can be accessed by anyone in the world with an internet connection, and users can interact with its computational features without permission. Ethereum can be used for data storage, financial transactions, land ownership and much more both imagined and yet to be imagined. Ethereum is decentralized; a record of all Ethereum transactions are stored on thousands of different computers around the world. In traditional systems, data is far more centralized, and it can become enormously expensive to achieve the same level of distribution (and thus security) that is enabled by Ethereum. Ethereum is trusted; thanks to cryptographic signatures and complex mathematics, Ethereum can be interacted without a 3rd party. Information entered into the network is immutable (will not change) and ownership of said information can be proven by its rightful owner. Ethereum is pseudonymous; with cryptographic signatures, users who own information on Ethereum do not need to release personally identifiable information to prove their ownership. Transacting value across the Ethereum network can be done pseudonymously, and personal details can be revealed only if the sender chooses to do so. Ethereum is fast; storing and transferring data on Ethereum can happen in seconds, whilst retaining the trust, privacy and decentralized (secure) fundamentals with which Ethereum provides. Once the protocol fully matures and the Ethereum application layer is established, the system will provide utility that is several orders of magnitudes greater than alternative options today. Of course, Ethereum is still a very young technology. It launched in June 2015 and is still working through a number of upgrade Continue reading >>

Explaining Ethereum To Mymom

Explaining Ethereum To Mymom

I first bought Ethereum at the price of $7 per Ether. Within a few months Ethers value was $200. That is probably the best return on an investment I will ever make. Having bought into Ethereum, but still not actually knowing what it was, I figured it was a good idea to understand what exactly I was buying into. Here is my best attempt at describing (in non technical terms) what I learned about Ethereum that excites me so much. For every complex problem there is an answer that is clear, simple, and wrong. H. L. Mencken Here is a sentence defining Ethereum using a bunch of words that the average human probably doesnt understand. Ethereum is an open-source, blockchain-based, general purpose decentralized application platform, enabling smart contract functionality. It employs the Ethereum Virtual Machine and the Solidity programming language to directly implement and execute peer-to-peer and multiparty agreements among other applications. No wonder this stuff is confusing. That sentence makes no sense! So,What do those words mean? When people talk about Ethereum often they are talking about two different things. One is the Ethereum Network, and two is the cryptocurrency Ether. Often times people are talking about the cryptocurrency when they say Ethereum, but Ether is actually the name of the cryptocurrency, while Ethereum refers to the Ethereum Network (we will go into more details later). Blockchain is a fancy word for a simple concept. Blockchain is essentially a database. Each item that is stored in this database has a timestamp of when it was created and a link to the previous item created in the database (this is what forms the chain). Thats about it. Often people talk about the blockchain as being super secure and unhackable. The details of how its safer get quite c Continue reading >>

Ethereum Sharding Explained Simply

Ethereum Sharding Explained Simply

By Shawn Dexter / February 14, 2018 Ethereum Sharding: The demand for scalability is becoming increasingly urgent. The Cryptokitties incident demonstrated how quickly the Ethereum network can clog-up. While many in the community are excited for Ethereums Sharding, there are just as many who struggle to understand how sharding will help Ethereum scale. In this post, I will attempt to explain Ethereums sharding using a simple analogy. One of the major problems of a blockchain is that an increase in the number of nodes reduces its scalability. This may seem counterintuitive to some people. More nodes = more power. So more speed, right? Not exactly. One of the reasons a blockchain has its level of security is because every single node must process every single transaction. This is like having your homework assignment checked by every single professor in the university. While this may ensure that your assignment is marked correctly, it will also take a really long time before you get your assignment back. Ethereum faces a similar problem. The nodes are your professors. Each transaction is your assignment. Sure, we can reduce the number of professors (nodes) until we are satisfied with the speed. But as the assignment (transaction) backlog increases, we will need to further decrease the number of professors. This will eventually lead us to rely on a few trusted group of professors. A centralized group. This defeats the ideology of blockchain decentralization. Its much easier to compromise/corrupt a smaller group of professors (nodes) than the entire university (the entire network). As a result, we sacrifice security in an effort to scale. To sum it up, blockchains must choose between Two of the Three following attributes: With the problem and limitations understood, we now p Continue reading >>

Everything Youve Ever Wanted To Know About Ethereum, Patiently Explained

Everything Youve Ever Wanted To Know About Ethereum, Patiently Explained

Everything youve ever wanted to know about Ethereum, patiently explained Although Bitcoin and Ethereum are terms that are often paired together, the reality is that they are vastly different.The only thing Ethereum shares with Bitcoin is that its a cryptoasset running on top of blockchain. Instead of being just a cryptocurrency, like Bitcoin, Ethereum also has features which effectively makes it a huge decentralized computer. To understand Ethereum , one must understand how blockchain works. If you already understand it, or have already read my ultimate guide to understand blockchain , feel free to go directly to the next section. A blockchain, simply put, is a database. Its an ever growing database of certain kind of data and has quite remarkable properties: Once data is stored in the database, it can never be modified or deleted. Every record on a blockchain is permanent for eternity. No single individual or organization maintains the database; several thousand individuals do, and everyone has a copy of the database with themselves. To understand how several people are able to keep their copies of the database in sync with everyone else, imagine there are ten individuals in a network. Everyone is sitting with an empty file folder and an empty page in front of them. Whenever anyone does something important in the network, like transferring money, they announce it to everyone in the network. Everyone makes a note of the announcement on their pages until the page is filled. When it does, everyone has to seal the contents of the page by solving a mathematical puzzle. Solving the mathematical puzzle ensures that everyones page had same contents and that they can never be modified. Whoever does it first, gets rewarded with some amount of cryptocurrency. Note: Want to know Continue reading >>

What Is Ethereum? A Step-by-step Beginners Guide

What Is Ethereum? A Step-by-step Beginners Guide

If you want to know what is Ethereum and how it works and what it can be used for, without going deep into the technical abyss, this guide is perfect for you. Important Note: This guide assumes a basic understanding of blockchain technology. If youre unfamiliar with blockchain, check out this step by step introduction for beginners . Beyond Bitcoin & first generation decentralized applications Although commonly associated with Bitcoin , blockchain technology has many other applications that go way beyond digital currencies. In fact, Bitcoin is only one of several hundred applications that use blockchain technology today. [Blockchain] is to Bitcoin, what the internet is to email. A big electronic system, on top of which you can build applications. Currency is just one. Sally Davies, FT Technology Reporter Until relatively recently, building blockchain applications has required a complex background in coding, cryptography, mathematics as well as significant resources. But times have changed. Previously unimagined applications, from electronic voting & digitally recorded property assets to regulatory compliance & trading are now actively being developed and deployed faster than ever before. By providing developers with the tools to build decentralized applications, Ethereum is making all of this possible. At its simplest, Ethereum is an open software platform based on blockchain technology that enables developers to build and deploy decentralized applications. Is Ethereum similar to Bitcoin? Well, sort of, but not really. Like Bitcoin , Ethereum is a distributed public blockchain network. Although there are some significant technical differences between the two, the most important distinction to note is that Bitcoin and Ethereum differ substantially in purpose and capabil Continue reading >>

Ethereum For Dummies

Ethereum For Dummies

To put it in simple words, Ethereum is a decentralized platform for running smart contracts. Smart contracts are applications that run just the way they are programmed, with virtually zero possibility of any censorship, fraud, third party interference or downtime. Ethereum was crowdfunded in the year of 2014 from its fans all over the world, and was developed by a Swiss nonprofit organization, the Ethereum Foundation , in collaboration with some of the greatest minds from around the world. Before talking about Ethereum in detail, knowing more about the three commonly used terms in the Ethereum environment will be helpful so let us get into that. As the name suggests, these are contracts but not in the way we normally think of a contract. A smart contract is a computer protocol/program, which automatically executes the contractual part corresponding to the condition that is fulfilled. With smart contracts, you are looking at an incorruptible system of enforcing contracts, thus eliminating the risks of delayed payments and bringing down the risk of non-performance by over 80%. The Blockchain, being the most talked-about subject in Ethereum and other cryptocurrencies like Bitcoin, is nothing more than a distributed database. It has data records, is growing continuously and also is protected against any form of revision and tampering, even from its own operators. A blockchain, unlike traditional server architecture, does not go down if a single node is compromised or goes offline. The user data is private and apps remain decentralized, working just the way Internet was supposed to do. The Ethereum wallet acts as a gateway for DApps or Decentralized Applications that work on the Ethereum Blockchain. It holds ether, amongst other crypto-assets that are built using Ethereum. Continue reading >>

What Is Ethereum, In Layman's Term?

What Is Ethereum, In Layman's Term?

When we use our computers and use Word docs or other files we normally save them in folders. A folder with docs, photos, spreadsheets, music files, other files, etc. could be called our database. When we use Facebook, for example, we don't keep that "database" of photos, status reports, messages, links, etc in our computer, Facebook keeps a database of all our activities on their servers in a data-center, which is a building full of servers (powerful computers). In the case of Bitcoin instead of using Facebook, or any other service, to store our stuff in their databases, we download a software that is more or less like Skype, and instead of sending and receiving voice or video or text between us we send and receive units called bitcoins. The Bitcoin software (Bitcoin Core) instead of centralizing "the database" in a service like Facebook or Google or Dropbox, it keeps a copy of the database on your laptop or PC. Imagine 10 friends at a bar around a table and everybody with a laptop and a copy of Bitcoin. Each laptop has the complete database of the Bitcoin list of accounts and transactions. When friend A sends 1 bitcoin to friend B it sends the message to all 10 laptops and they all check that the balance is correct, the accounts, etc. and after checking (and doing some other calculations) they all agree to post, on the databases that they all have in their disks, the new transaction. The Bitcoin database is called a blockchain, because of how it operates, and the process by which all computers check transactions and reach an agreement is called "consensus" (there is another process called mining, but I think it's not relevant in a layman's explanation). The world changing invention of Bitcoin is that all computers participating in the network can keep this "distribute Continue reading >>

Blockchain, Bitcoin And Ethereum Explained

Blockchain, Bitcoin And Ethereum Explained

Blockchain, Bitcoin And Ethereum Explained Opinions expressed by Forbes Contributors are their own. Despite hundreds of articles being written and discussions being had on this subject, can anyone truly say that they understand everything about blockchain, Bitcoin,and Ethereum? I spoke to Loi Luu, co-founder and CEO of KyberNetwork , a decentralized exchange that allows for the instant trading and conversion of any cryptocurrency. I asked this renowned cryptocurrency, smart contract security and distributed consensus algorithm researcher the questions most regularly asked about blockchain, as well as its impact on the fintech industry. Madhvi Mavadiya: In layman's terms, how would you describe blockchain's impact on the fintech industry? Loi Luu: Revolutionary, because it takes away the middleman to attain the same purposes in transactions. Traditionally, middlemen such as banks and other forms of financial institutions are needed to ensure that a payment goes through. However, these middlemen cost money, and as a result payment transactions become unnecessarily inefficient, bloated and expensive. Additionally, having middle men introduces potential security risks and financial fraud. Blockchain improves the efficiency of a transaction by eliminating the middlemen, and as a result, we could have a more efficient payment system, reducing the cost of money transfer for everyone. Blockchain also makes things more transparent and easily auditable by any third party. Mavadiya: How would you describe Ethereum's impact on fintech? Loi: Ethereum is the first generic blockchain platform that allows users to easily create and deploy their decentralized and trustless applications. It has created incredible opportunities in the fintech space. Its creation and adoption has allowed Continue reading >>

Whats The Difference Between Bitcoin And Ethereum?a Simple Explanation

Whats The Difference Between Bitcoin And Ethereum?a Simple Explanation

Whats the difference between bitcoin and ethereum? A simple explanation By Michelle Tam, Marketing Intern (Summer 2017) Since 2009, bitcoin has always been dominating the crypto-technology space; but it is certainly not the only major player. Ethereum was launched in 2015 and is the second largest crypto-platform after bitcoin. Each has attracted a lot of hype due to their promising features and applications. When deciding on whether to engage with the bitcoin or ethereum ecosystems, it is important to understand the characteristics that differentiate the two. Bitcoin a decentralized digitalcurrency While people often make comparisons between ethereum and bitcoin, the reality is that they are fundamentally different. Bitcoin was designed to act as a peer to peer decentralized currency for the internet age and has now been formally recognized by some governments as a virtual payments system or digital currency. Individuals can use bitcoin to buy a wide variety of goods or services and the number of merchants accepting bitcoin is growing rapidly. Bitcoin is also gaining increased popularity as a secure store of value. Ethereum a decentralized computing platform Ethereum was designed to be more than a cryptocurrency. It is a decentralized computing platform which enables its users to program different types of smart contracts which are stored and run on its network, and fueled by its own cryptocurrency called ether. Unlike bitcoin, ether is not intended to be used as a digital currency for commerce but as a platform-based currency that is used only within the ethereum network. Decentralized applications or dapps, which are built around smart contracts and run on the ethereum network are open source and rely on disintermediation. This means that two dapp users can be conne Continue reading >>

How Ethereum Works - Coindesk

How Ethereum Works - Coindesk

CoinDesk Launches 2017 Year in Review Opinion and Analysis Series Now that we've covered what ethereum is, let's dive deeper into how the platform functions under the hood. Consider the online notebook application described in " What is Ethereum? " Using ethereum, the appdoesn't require one entityto store and control its data. To accomplish this, ethereum borrows heavily from bitcoin's protocol and its blockchain design, but tweaks it to support applications beyond money. Ethereum aims to abstract away bitcoin's design, however, so that developers can create applications or agreements that have additional steps, new rules of ownership, alternative transaction formats or different ways to transfer state. The goal of ethereum's 'Turing-complete' programming language is to allow developers to write more programs in which blockchain transactions could govern and automate specific outcomes. This flexibility is perhaps ethereum's primary innovation, as explained in the guide " How Ethereum Smart Contracts Work ". The structure of the ethereum blockchain is very similar to bitcoin's, in that it is a shared record of the entire transaction history. Every node on the network stores a copy of this history. The big difference withethereum is that its nodes store the most recent state of each smart contract, in addition to all of the ether transactions. (This is much more complicated than described, but the text below should help you get your feet wet.) For each ethereum application, the network needs to keep track of the 'state', or the current information of all of these applications, including each user's balance, all the smart contract code and where it's all stored. Bitcoin uses unspent transaction outputs to track who has how muchbitcoin. While it sounds more complex, the id Continue reading >>

A Gentle Introduction To Ethereum

A Gentle Introduction To Ethereum

Ethereum builds on blockchain and cryptocurrency concepts, so if you are not familiar with these, its worth reading a gentle introduction to bitcoin and a gentle introduction to blockchain technology first. This article assumes the reader has a basic familiarity with how Bitcoin works. Ethereum is software running on a network of computers that ensures that data and small computer programs called smart contracts are replicated and processed on all the computers on the network, without a central coordinator. The vision is to create an unstoppable censorship-resistant self-sustaining decentralised world computer. The officialwebsite is Itextends the blockchain concepts from Bitcoin which validates, stores, and replicates transaction data on many computers around the world (hence the term distributed ledger). Ethereum takes this one step further, and also runs computer code equivalently on many computers around the world. What Bitcoin does for distributed data storage, Ethereum does for distributed data storage plus computations. The small computer programsbeing run are called smart contracts, and the contractsare run by participants on their machines using asort ofoperating system called a Ethereum Virtual Machine. To run Ethereum, you can download (or write yourself if you have the patience) some software called an Ethereum client. Just like BitTorrent or Bitcoin, the Ethereum client will connect over the internet to other peoples computers running similar client softwareand start downloading the Ethereum blockchain from them to catch up. It will also independently validate that each block conforms to the Ethereum rules. What does the Ethereum client software do? You can use itto: Create new transactions and smart contracts Your computer becomes a node on the network, r Continue reading >>

A Beginners Guide Toethereum

A Beginners Guide Toethereum

According to the Ethereum website , Ethereum is a decentralized platform that runs smart contracts. This is an accurate summary but in my experience when first explaining Ethereum to friends, family, and strangers it helps to compare Ethereum to Bitcoin since a lot of people have at least heard about Bitcoin before. This beginners guide should help those who are new to Ethereum to understand the high level differences between the two. Simply put, Bitcoin can be described as digital money. Bitcoin has been around for eight years and is used to transfer money from one person to another. It is commonly used as a store of value and has been a critical way for the public to understand the concept of a decentralized digital currency. Ethereum is different than Bitcoin in that it allows for smart contracts which can be described as highly programmable digital money. Imagine automatically sending money from one person to another but only when a certain set of conditions are met. For example an individual wants to purchase a home from another person. Traditionally there are multiple third parties involved in the exchange including lawyers and escrow agents which makes the process unnecessarily slow and expensive. With Ethereum, a piece of code could automatically transfer the home ownership to the buyer and the funds to the seller after a deal is agreed upon without needing a third party to execute on their behalf. The potential for this is incredible! Think of the numerous applications that act as a third party to connect you with others based on some set logic (e.g. Uber, Airbnb, eBay). Many of the centralized systems we use today could be built in a decentralized manner on Ethereum. With Ethereum you can make these transactions trustless which opens up an entire world of dec Continue reading >>

What Is Ether?

What Is Ether?

Ether is a necessary element a fuel for operating the distributed application platform Ethereum. It is a form of payment made by the clients of the platform to the machines executing the requested operations. To put it another way, ether is the incentive ensuring that developers write quality applications (wasteful code costs more), and that the network remains healthy (people are compensated for their contributed resources). If you just want to test the technology, you probably don't need real ether. Download the latest Wallet app and switch to the Test Network Check your ether presale balance safely here: The total supply of ether and its rate of issuance was decided by the donations gathered on the 2014 presale. The results were roughly: 60 million ether created to contributors of the presale 12 Million (20% of the above) were created to the development fund, most of it going to early contributors and developers and the remaining to the Ethereum Foundation 5 ethers are created every block (roughly 15 seconds) to the miner of the block 2-3 ethers are sometimes sent to another miner if they were also able to find a solution but his block wasn't included (called uncle/aunt reward) Note that after the Byzantium update is implemented, the mining and uncle reward is reduced to 3 ethers and 0.625-2.625 ethers, respectively. No. According to the terms agreed by all parties on the 2014 presale, issuance of ether is capped at 18 million ether per year (this number equals 25% of the initial supply). This means that while the absolute issuance is fixed, the relative inflation is decreased every year. In theory if this issuance was kept indefinitely then at some point the rate of new tokens created every year would reach the average amount lost yearly (by misuse, accidental key Continue reading >>

Understanding Ethereum Sharding - A Simple Explanation : Ethtrader

Understanding Ethereum Sharding - A Simple Explanation : Ethtrader

Several of my IRL friends have been getting into crpyto recently mainly into Ethereum. Many of them have been struggling to understand certain concepts - like Sharding (and even PoS). So I thought I'd write a quick post using a simple analogy to explain Sharding. Hopefully this will help the newer folk ease into the community! The demand for scalability is becoming increasingly urgent. The Cryptokitties incident demonstrated how quickly the Ethereum network can clog-up. While many in the community are excited for Ethereums Sharding, there are just as many who struggle to understand how sharding will help Ethereum scale. In this post, I will attempt to explain Ethereums sharding using a simple analogy. One of the major problems of a blockchain is that an increase in the number of nodes reduces its scalability. This may seem counterintuitive to some people. More nodes = more power. So more speed, right? Not exactly. One of the reasons a blockchain has its level of security is because every single node must process every single transaction. This is like having your homework assignment checked by every single professor in the university. While this may ensure that your assignment is marked correctly, it will also take a really long time before you get your assignment back. Ethereum faces a similar problem. The nodes are your professors. Each transaction is your assignment. Sure, we can reduce the number of professors (nodes) until we are satisfied with the speed. But as the assignment (transaction) backlog increases, we will need to further decrease the number of professors. This will eventually lead us to rely on a few trusted group of professors. A centralized group. This defeats the ideology of blockchain decentralization. Its much easier to compromise/corrupt a smaller Continue reading >>

Blockchain - How Would I Explain Ethereum To A Non-technical Friend? - Ethereum Stack Exchange

Blockchain - How Would I Explain Ethereum To A Non-technical Friend? - Ethereum Stack Exchange

How would I explain Ethereum to a non-technical friend? I've recently attempted to explain Ethereum to several non-techy friends. My explanation usually involves starting with a comparison to Bitcoin, but this quickly becomes complicated as I then have to explain the backstory of how the Bitcoin blockchain works, which is similarly technical in nature. Is there a better way to describe the general concepts of Ethereum to non-techies? Are there any analogies I can make to things that are less technical in nature? Or is it just the case that the technology is quite complicated...? Ethereum is a world computer [ 1 ] and might change how we interact, just like the internet did, 20 years ago. Like Bitcoin, it is based on a block chain, but Ethereum is more than just a currency: Secure backbone for e-commerce and the Internet of Things Integrated development environment for debugging, development and deployment of Ethereum applications Free software - all released under the General Public Licence (GPL) The substantive content of your Answer was almost entirely in a linked video and therefore unavailable in this StackExchange. There was no attempt to summarize the salient points of the video. user75798 Jan 20 '16 at 21:25 Brilliant! I was having trouble to understand it myself Zorgatone Jan 21 '16 at 13:44 Many parts of Ethereum software are not released under the GPL. E.g. pyethereum , evmjit . Pawe Bylica Mar 9 '16 at 19:14 This answer isn't that sexy. For us who understand, it says everything. But for someone new: "Transparent, why is that cool? I expect all services to be secure. Paypal is secure and something license." Not being a hater in any way, just trying to find more of a elevator pitch which makes the other person go "Aha!" Jon Ramvi Aug 23 at 12:45 It depends on Continue reading >>

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