Ethereum?
- Ethereum is a global open source fully distributed “peer-to- peer” computer network (https://www.ethereum.org)
- Uses a native cryptocurrency, Ether (ETH), to facilitate transactions and execute smart contracts
- Ethereum is a second-generation blockchain capable of handling multiple assets and information, beyond just cryptocurrencies.
Introduction to Blockchain
- A blockchain is a digital ledger distributed across a network, ensuring security, transparency, and immutability
- Transactions, once verified and recorded, cannot be altered/Deleted
- It enables trustless environments where ownership and asset (information/ether) exchanges are transparent and secure
- Tracking ownership of assets
- The first assets on a Blockchain were cryptocurrency.
- Bitcoin is an application that runs on the Blockchain.
- Yes, Bitcoin is an application, that runs on the Blockchain “run time” infrastructure.
- The two are obviously not the same. Although that is a common misconception.
- On a Blockchain network, users, or transactors, conduct “traditional” commerce and agree on prices for items they are buying and selling.
- On the Bitcoin network users send and receive the digital Bitcoins between one another.
First-Generation Blockchain
- Primarily for transferring a single asset type (Bitcoin)
- We can consider Bitcoin’s Blockchain as a first generation Blockchain
Second-Generation Blockchain
- Ethereum is a second generation Blockchain.
- Manages multiple asset types, including tangible and intangible assets.
- Second generation Blockchain can also take action on transactions with programs called Smart Contracts
- Introduces smart contracts for automated operations and logic execution.
NOTE 💡
Etherscan: A blockchain explorer for tracking Ethereum transactions. Users can view transaction details, including fees (gas), sender/receiver addresses, and smart contract execution.
Assets
- Assets generally come in two varieties, tangible assets and intangible assets.
- Tangible assets exist in the physical world and are things we can touch, such as gold, a building, a computer.
- Intangible assets are items such as a bond, an “I owe you”. patent, copyright, or trademark.
- Both tangible and intangible assets can be transacted on a Blockchains such as Ethereum.
Network
- Ethereum and other Blockchains run on a distributed network.
- Each computer on the network is a peer and has a copy of the ledger with all the data.
- The form of network always ensures the Blockchain is up and running.
- It is also less vernerable to attack.
- Centralized: Vulnerable to single points of failure.(if the focal point of the centralized node goes offline, the whole network is down)
- Decentralized: Improved resilience but less synchronized.
- Distributed: Fully decentralized, resilient, and always online.