What is Ethereum

Ethereum is a blockchain based open source platform, which works with the same technology as Bitcoin and has its own cryptocurrency: the ether token (ETH).

Its main feature, more than keeping an accounting record like Bitcoin, is that of being able to execute smart contractsknown worldwide as smart contracts.

Since the young Russian programmer Vitalik Buterin published it in february 2014, this network is also used for the development of all kinds of decentralized applications or dapps.

In fact, the core community of this network defines Ethereum as “a programmable blockchain capable of decentralizing the Internet”.

Smart contracts on Ethereum

Every contract records the terms of a relationship. In the traditional world there is a legal system that endorses them and that punish those who break them. Instead, instead of being upheld by law, smart contracts point to ensure compliance with cryptographic methods.

Are pieces of code that execute an operation reliable and predictable: Once uploaded to Ethereum, they will always run as intended. Therefore become a ideal form of agreement for the internet age.

Basically, these computer programs are created to execute a certain action when a condition is met. A classic example is that of beverage vending machines: when someone puts money, they receive a soft drink in return.

On Ethereum, the same procedure can be applied to different types of contracts, according to the needs of the users. Although beyond isolated and particular uses, smart contracts shine above all in the field of development of decentralized software tools, or dapps.

Decentralized Applications on Ethereum

When we enter some web service to open documents, check emails or look at photos of friends, we actually connect to a server of that company or platform. «Our» information, strictly speaking, is housed in a foreign server. And the same goes for home banking.

Although this model is easy for users, it is also true that large companies are the largest magnets for computer attacks, with their servers as a central target.

In addition, this system leaves user information in the hands of companies that may fall into unilateral decisions (such as shutting down or suspending your service) or being exposed to government pressure.

Ethereum proposes to make up for this deficiency with a decentralized computing system: a global computer that can work without authority or central server, where all tasks are executed on different nodes of a peer-to-peer network.

Thus, this development seeks return control of their data to each user, without compromising convenience in the access and operations that the digital age allowed.

Ether (ETH), the Ethereum token

The system proposed by Ethereum is not free. The network uses ether (ETH), its own token, which can be used for pay for the amount of computing resources that an application or program needs to work.

Like bitcoin and other cryptocurrencies, ether is a digital asset that you do not need any authority to approve or process a transaction.

Although in addition to functioning as a digital currency or a payment system, originally used for provide «fuel» to network.

Ethereum transactions are typically calculated in «gas,» a unit of measurement used to set a price for the commission for the amount of processing power required to execute an action. That «gas» is paid for with ether.

But in addition to this token, the official cryptocurrency of this network, through the use of smart contracts and the platform to develop decentralized applications each project mounted on Ethereum can create and publish its own token or cryptocurrency.