This article is our first introduction to Ethereum. It deals as pedagogically as possible with the concepts of blockchain, smart contracts, and CAD without going into technical details.
Ethereum, a global computer
In one sentence, Ethereum is a global computer that anyone can program and use as they wish. This computer is always turned on, it is very secure, and everything that is done using this computer is public.
Ethereum is, therefore, the decentralization of applications. These applications work on the Ethereum network, which consists of several thousand computers that communicate constantly. They share the same database, the blockchain. This database can be compared to a large register, which would be filled row by row by network participants, or an excel table on which one could only enter a new row without being able to modify the others. (0.005 eth to usd).
To use this blockchain, the uses “smart contracts,” which are actually programmable lines of computer code that would correspond to macros in the analogy with an excel array.
This decentralization through the use of blockchain technology has many advantages, including:
- Immutability: the data that is saved in a blockchain is saved ad vitam aeternam: the blockchain keeps the history of all the changes made to it since the beginning, and it is not possible to change this history.
- Data corruption protection: since each computer has a copy of the database, it is extremely difficult to hack this database. To alter the database, more than 51% of participating computers would have to be altered simultaneously… The bitcoin blockchain has existed since 2009, and it has never been corrupted by a computer attack.
- Network security: blockchain works with a very powerful encrypted protocol that also makes it very difficult to alter.
- Transparency: All contracts are executed publicly on Ethereum, and, with the necessary technical knowledge, anyone can check that everything is working properly.
Ethereum was deployed by the Foundation in August 2015, and the protocol is still under development. Version 1.0 was deployed on March 14, 2016, but the tools allowing the “general public” to use it have not yet been developed.
However, dozens of developers around the world are already working to develop decentralized applications (“dApps”) that will run on Ethereum.
How exactly does it work?
The technology behind Ethereum is roughly the same as that used by bitcoin: they are personal computers that “contain” in a single global public database and therefore shared among all. An account book or a giant spreadsheet in which each interested person enters the data they want and to which everyone has access. (0.13 eth to usd).
This is called the “blockchain.” This “blockchain” includes the history of all operations that have been carried out on the basis. This allows 1) to prevent someone from changing this database history and 2) to be able to reconstruct at any time the various operations carried out on the database by users.
How are contracts executed?
To execute the instructions on the Ethereum blockchain, you need computing power. This computing power is provided by network participants. Individuals or companies decide to make their computers available to the network to run the blockchain. They are remunerated for this by granting ether.