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Understanding Ethereum

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 >>

Understanding Ethereum

Understanding Ethereum

Crypto Analyst and Writer @ 3iQ (Ethereum has well established itself as the #2 player in the cryptoasset market, behind none other than Bitcoin. In short Ethereum is meant to be a World Computer, providing the ability to replace centralized servers with thousands of nodes (individual computers) across the world. A common misconception is that Ethereum is a currency in the same sense as Bitcoin. Ethereum is not a currency, it is an open-source blockchain-based platform that anyone is able to develop decentralized applications (Dapps) upon. Within the Ethereum platform is a native currency called ether that is used to fuel the applications built on the platform. Data as at February 18, 2018. Retrieved from: bitinfocharts.com Blockchain technology was first introduced by Bitcoin as a way to keep track of digital cash ownership in a tamper proof way through a shared ledger. Many soon realized blockchain technology was not limited to a peer to peer digital cash system, it could be used to store any information of value. This opened blockchain technology to a plethora of use cases beyond digital currencies. People began developing a wide variety of decentralized applications, however, it required significant resources as well as experience in advanced coding and cryptography. In 2013, Vitalik Buterin proposed Ethereum as an open source platform that would significantly lower the entry barrier for programmers to develop their own decentralized applications. The development of the platform was funded through a crowdsale in the summer of 2014 and Ethereum went live on July 30th, 2015. Similar to how the internet protocol HTTP (Hypertext Transfer Protocol) facilitates communication over computer networks, Bitcoin and Ethereum are considered protocol layers because they are what 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 >>

The Hitchhikers Guide To Smart Contracts Inethereum

The Hitchhikers Guide To Smart Contracts Inethereum

The Hitchhikers Guide to Smart Contracts inEthereum Updated Oct 6th 2017, for Truffle v3.4.11 and Solidity v0.4.15. Ive been working with smart contracts for 4 years , mainly in the Bitcoin blockchain. Some projects I participated in are Proof of Existence , bitcore , and Streamium . In the past months, Ive been exploring and working with the Ethereum platform. Ive decided to compile a short guide to ease the way of future programmers learning Ethereum smart contract development. Ive divided the guide in two sections: how to get started building smart contracts in Ethereum, and a quick note on smart contract security. Getting started with Smart Contracts onEthereum This guide assumes you have a basic level of technical understanding on how cryptocurrencies and blockchains work. If you dont, I recommend skimming over Andreas Antonopoulos Mastering Bitcoin book , Consensys Just Enough Bitcoin for Ethereum guide , or at least watching this short video by Scott Driscoll . To continue ahead you should know what a public and private key are, why a blockchain needs miners, how decentralized consensus is reached, what a transaction is, and the concepts of transaction scripting and smart contracts. Two other important and related concepts youll need to understand before working with Ethereum are the Ethereum Virtual Machine and gas. Ethereum was designed as a smart contract platform. Its origin is actually linked to a critique made by Vitalik Buterin on bitcoin as a very limited smart contract platform. The Ethereum Virtual Machine (EVM) is where smart contracts run in Ethereum. It provides a more expressive and complete language than bitcoin for scripting. In fact, it is a Turing Complete programming language. A good metaphor is that the EVM is a distributed global computer wh 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 >>

Understanding Ethereum Before You Investblindly

Understanding Ethereum Before You Investblindly

Understanding Ethereum Before You InvestBlindly A compilation of resources for Ethereum beginners When people are afraid, be greedy. And when people are greedy, be afraid.- FredWilson Emotions are flying high in the cryptocurrency space as this years summer craze has people running towards the money. Charts, like the one above, show how much money has entered the space in the past month, which not only provides validity to cryptocurrencies as an asset/commodities class, but also adds fuel to the speculation and hype fire. Unfortunately, many investors dont understand blockchain technology, let alone Ethereum, which makes it more important then ever to educate yourself on what Ethereum is, how it works, its powerful use cases, and its potential. To help people learn the basics about Ethereum, Ive complied a list of videos and posts that helped me learn more about the space. While its impossible to learn everything in 10 videos and posts, hopefully this will take you from a beginner to someone who can talk about Ethereum with confidence. #1: Ethereum in 25 minutes with Vitalik Buterin , the inventor/founder of Ethereum. #2: A Beginners Guide to Ethereum by Linda Xie, Product Manager atCoinbase #9: The Basics of Blockchain and Ethereum with Joseph Lubin, Founder of ConsenSys #10: An in-depth look at startups and opportunities built onEthereum An in-depth look at startups and opportunities built on Ethereummedium.com Do you have other resources that helped you? Post them in the comments below or tweet me , and Ill add them! If you enjoyed this post, give it some love with a heart () so others can find it. Thanks! Hi! Im Jordan, and I work in VC in Israel. Theres a lot happening in the VC/startup scene and I figured Id post my observations here. All opinions are my own. Fee Continue reading >>

Understanding Ethereum

Understanding Ethereum

Right now is absolutely the prime time to talk about cryptocurrencies. In November 2017, the value of Bitcoin exploded, surging so quickly, that it was the catalyst to bring Bitcoin into the public lexicon. However, Bitcoin is just the most well known of the cryptocurrencies - theres a whole world of them out there. Many people who have been investigating cryptocurrencies have come across something called Ethereum. What is Ethereum ? Well, Ethereum is NOT a cryptocurrency. Bitcoin is a cryptocurrency. Ethereum is a platform. Ethereum is an open source platform, which exists to build and distribute decentralised applications. These applications will operate on a network of hundreds of thousands of nodes across the globe. There will be no central server for these applications, they operate in a peer-to-peer fashion. These decentralised apps are known as dapps, and many are excited but the potential they offer. The value of the Ethereum platform increases as more apps are written for it. There are benefits to this approach. Applications that are centralized could, for example, have a higher risk of attack. In a decentralized architecture, there is no single point of failure. One trait shared with Bitcoin is the reliance on Blockchain technology at the heart of Ethereum. Bitcoin, as a digital currency, was the first and most well known use of the blockchain technology. Ethereum makes the blockchain technology available to uses other than cryptocurrency. Technically, you could say that Bitcoin is the first dapp, with the cryptocurrency being the first widespread application of blockchain technology. The proponents of Ethereum however will tell you that the real potential of the blockchain is to come. The blockchain nodes could run everywhere, on premises or in the cloud. Th Continue reading >>

Understanding Ethereuma Fullguide

Understanding Ethereuma Fullguide

Interested in the challenges between blockchains and the law founder of www.lawandblockchain.eu Ethereum is the subject of a lot of hype lately. It is praised by some as the new internet or the worlds computer and criticised by others as a platform that enables widespread scams and ponzi schemes to thrive. I see badly informed articles about Ethereum, smart contracts, DApps, DAOs, ICOs and tokens on the daily so it is time to analyse the subject. I will present the argument that Ethereum might form the main protocol enabling the internet of value. It is time to take a closer look at what Ethereum is, what it enables and what role it could play in the future. But first, we have to backtrack a bit. Time for a small reminder about the value of distributed ledger technologies. To put it briefly, a blockchain is a database that is secured and maintained by a large number of nodes worldwide. Data is stored in blocks, which are time-stamped and linked to each other to form a chain. The blockchain makes sure that all data stored in the chain is secure and immutable forever, which is what makes the blockchain so interesting. Through its consensus mechanism, the blockchain is trustless , which means that one does not have to rely on the trustworthiness of a counterparty. For the first time, the blockchain enabled a safe way to send value on the internet without needing a trusted third party. This led to the rise of Bitcoin and other cryptocurrencies. In essence, a Bitcoin transaction is just the execution of a piece of code stating that person A sent X amount of Bitcoin to person B. This transaction is self-enforcing. To execute, it first checks if there is enough Bitcoin in person As digital wallet and then sends the money to Bs wallet. In itself, this transaction is a piece of Continue reading >>

Understanding Ethereum Smart Contracts

Understanding Ethereum Smart Contracts

Posted by Gjermund Bjaanes on November 27, 2017 You might have heard the term smart contract, and you might even know that they are code you can run on a blockchain. But how can you run code on a blockchain? Its not the easiest concept to wrap your head around. This post explains how smart contracts work on the Ethereum Blockchain. Basic understanding of programming will help as this post contains some code - although the examples a simple. Some technical details in this post are slightly simplified for the sake of clarity, but the concepts are valid. Without going into too much detail, the central concept of Blockchain technology is a distributed ledger.Its a particular type of database that is shared among many participants. This special database is just a list of transactions. Every transaction that has ever happened in the network. Everybody can have their own copy. This distribution coupled with strong monetary incentives removes the need for trust between parties. Traditionally, trust between parties has been solved using middlemen, third parties. Paypal. Your bank. A transaction with someone you dont trust would go through an intermediary both parties trust. With blockchain, this need is eliminated because you can instead put your trust in a network where the want to cheat is removed by strong incentives (in short: its much more profitable to stay within the rules). To become a bit more concrete: A blockchain network is a bunch of machines which all have the same copy of the list of transactions (e.g., money sent from person A to person B). Since everybody has the same list, it is hard to fool the network into accepting false transactions. Combine this with some cryptographic algorithms and monetary incentives to follow the rules, and you get a pretty secure net 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 >>

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 >>

Ethereum Cryptocurrency: Everything A Beginner Needs To Know

Ethereum Cryptocurrency: Everything A Beginner Needs To Know

Ethereum Cryptocurrency: Everything A Beginner Needs To Know By: Sudhir Khatwani In: Ethereum Last Updated: In the cryptocurrency world, if Bitcoin is the king, then Ethereum is the queen. The price of Ethereum (ETH) has risen significantly in past few months, and its one of the most promising cryptocurrenciesright now. In this article I will help you understand everything about Ethereum & you would learn all important things that you should know as a beginner. Before that, Consider you have just booked an Uber ride and a driverless car has come to pick you up. That car takes you to the gasoline station and self-pays for its fuel with the money it earned from the previous ride. Afterward, this car takes you to your destination, and the trip fare is auto-deducted from your Uber wallet. While driving you to your destination, the car also self-paid its annual insurance fee and its monthly liability fee on behalf of its (human) owner. After it drops you off, itdrives itself to a mechanic for some repairs. You might be thinking I am telling you a scene from a Sci-Fi movie. Butto your surprise (and mine), I am not!! Such things are being tested, and the use of cryptocurrencies like Ethererum and technology like the Ethereum blockchain are the reasons that something like this can happen. Such autonomy is the direct effect of the theories behind cryptocurrencies. So to be able to digest this futuristic scenario, lets understand Ethereum. As the official Ethereum project websitesays: Ethereumis a decentralized platform for applications that run exactly as programmed without any chance of fraud, censorship, or third-party interference. But whats special about that? All software runs as it was programmed to do so Well, the code written on the Ethereum blockchain cant be altered, Continue reading >>

Understanding Ethereum, Bitcoins Virtual Cousin

Understanding Ethereum, Bitcoins Virtual Cousin

Technology |Understanding Ethereum, Bitcoins Virtual Cousin Vitalik Buterin was a fan of Bitcoin before he created the Ethereum network and its virtual currency, Ether. Credit Steve Jennings/Getty Images Bitcoin has many cousins and competitors. None have grown more popular than Ethereum, a global computer network with its own virtual currency, called Ether. Ethereum is a global computing network operating according to rules defined by Ethereum software. Those rules allow the Ethereum network to be programmed to complete certain types of computing tasks, with every computer on the network completing the task in parallel to ensure it is done correctly. Generally the tasks involve money. The creator of Ethereum, Vitalik Buterin, has likened it to a global smartphone that can be programmed to operate according to the apps built on top of it. The apps are called Dapps because they are run by a decentralized network of computers. Mr. Buterin says he chose the name because it refers to the hypothetical invisible medium that permeates the universe and allows light to travel. He announced Ethereum in late 2013, but it didnt go into operation until 2015. The Ethereum network has its own virtual currency, Ether. In the simplest sense, Ether are needed to pay the other computers on the network to complete tasks. It isnt free to use the network. People have also decided to buy and hold Ether, betting that it will become more valuable as more people want to use the network and need Ether to pay for the networks computing power. What does Ethereum have to do with Bitcoin? Mr. Buterin was a Bitcoin aficionado, and he was inspired by its success. But he set out to build something that could do more than Bitcoin: He wanted to build a system that would make it possible to program more c Continue reading >>

This Is The Reason Ethereum Exists

This Is The Reason Ethereum Exists

The worlds second-most-valuable cryptocurrency is also its most interestingbut in order to understand it, you must first understand its origins. In the beginning, there was Bitcoin. The cryptocurrency has for many become synonymous with the idea of digital money, rising to a market capitalization of nearly $100 billion. But the second-most-valuable currency, Ether, may be far more interesting than its headline-grabbing older sibling. To understand why its so popular, it helps to understand why the software that runs it, called Ethereum, exists in the first place. This piece first appeared in our new twice-weekly newsletter, Chain Letter, which covers the world of blockchain and cryptocurrencies. Sign up here its free! On Halloween in2008, someone or some group of people using the name Satoshi Nakamoto published a white paper describing a system that would rely on a decentralized network of computers to facilitate the peer-to-peer exchange of value (bitcoins). Those computers would verify and record every transaction in a shared, encrypted accounting ledger. Nakamoto called this ledger a blockchain, because its composed of groups of transactions called blocks, each one cryptographically linked to the one preceding it. Learn more about blockchain and its role in the crypto-economy. Bitcoin eventually took off, and soon people latched onto the idea that its blockchain could be used to do other things, from tracking medical data to executing complex financial transactions (see Why Bitcoin Could Be Much More Than a Currency ). But its design, intended specifically for a currency, limited the range of applications it could support, and Bitcoin aficionados started brainstorming new approaches. It was from this primordial soup that Ethereum emerged. In a 2013 white paper , Vit Continue reading >>

How Does Ethereum Work,anyway?

How Does Ethereum Work,anyway?

Odds are youve heard about the Ethereum blockchain, whether or not you know what it is. Its been in the news a lot lately, including the cover of some major magazines, but reading those articles can be like gibberish if you dont have a foundation for what exactly Ethereum is. So what is it? In essence, a public database that keeps a permanent record of digital transactions. Importantly, this database doesnt require any central authority to maintain and secure it. Instead it operates as a trustless transactional system a framework in which individuals can make peer-to-peer transactions without needing to trust a third party OR one another. Still confused? Thats where this post comes in. My aim is to explain how Ethereum functions at a technical level, without complex math or scary-looking formulas. Even if youre not a programmer, I hope youll walk away with at least better grasp of the tech. If some parts are too technical and difficult to grok, thats totally fine! Theres really no need to understand every little detail. I recommend just focusing on understanding things at a broad level. Many of the topics covered in this post are a breakdown of the concepts discussed in the yellow paper. Ive added my own explanations and diagrams to make understanding Ethereum easier. Those brave enough to take on the technical challenge can also read the Ethereum yellow paper. A blockchain is a cryptographically secure transactional singleton machine with shared-state. [1] Thats a mouthful, isnt it? Lets break it down. Cryptographically secure means that the creation of digital currency is secured by complex mathematical algorithms that are obscenely hard to break. Think of a firewall of sorts. They make it nearly impossible to cheat the system (e.g. create fake transactions, erase tr Continue reading >>

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