Bitcoin certainly gets the lion’s share attention in the digital cryptocurrency realm. However, to your surprise bitcoin is not the only best-performing cryptocurrency around. With more than 1350 cryptocurrencies around, Ethereum has managed to be on the top of the pile. Today, Ethereum is usually spelled in the same breath as bitcoin.
The idea of Ethereum started with one person, Vitalik Buterin. He is a Russian-Canadian software developer who started working at bitcoin network in 2011. Buterin is also known as a developer of bitcoinjs-lib and even as a developer behind a known cryptocurrency market site called Egora.
In 2013, while working for Bitcoin, he realized that the network lacked its own scripting language for application development. He explained and argued about this huge opportunity missed by bitcoin and when he failed to get a support, he started writing his own paper. He wanted to develop a cryptocurrency that would offer better functionality in comparison to bitcoin.
The Ethereum Whitepaper released in later 2013, conveyed about his vision to “offer a blockchain developed with a built-in fully-fledged turning-complete programming language that can be utilized for generating contracts”.
Ethereum is now known for these smart contracts.
Later in 2014, Crowdsale funded Ethereum Foundation a non-profit organization to guide development. It ran successfully in July and Aug 2014. A year later, the network went live, on July 30, 2015.
So, now let’s study what made Ethereum unique from Bitcoin?
If we overlook the differences, both the platforms Ethereum and Blockchain work on a similar pattern. The Ethereum’s coin “Ether” works in a similar fashion like Blockchain’s “bitcoin”. Just like blockchain, the Ethereum platform is completely decentralized having no intermediate banks for confirmations required to validate transactions. Here, the “miners” globally do the favor by fulfilling that role with powerful computational algorithms.
However, despite being so similar they operate for different goals. Bitcoin being a digital currency is just designed to function as a payment option, while Ethereum is designed for a broader approach. Ethereum as a network platform enables people to use Ether tokens for running applications and importantly create smart contracts.
Ethereum is a platform and ether is the cryptocurrency that powers it. Other than being a cryptocoin, its other applications are being utilized in various different forms. So, what are these applications that empower to transform the world? Let’s explore:
Ethereum has the power to completely revolutionize the health industry. How? The hospitals around the globe will be able to store, access and share different patient’s record internally. Ethereum can even share the data recorded by your smartwatch automatically to doctors in the world. So, if any serious patterns are witnessed like heart attacks or strokes, you will be warned earlier.
Ethereum technologies help us to develop an impactful prediction market application. Prediction markets are applications that reward users for making an accurate prediction for few specific events. For example, election, e-governance, stock value evaluations and many more things. Currently, Augur and Gnosis are two such known Ethereum prediction market platforms.
Today the existing and popular crowdfunding platforms like IndieGoGo and Kickstarter rate nearly 5% of the total fundraised. However, with the Ethereum blockchain platform, you can create a smart contract easily and without any charge.
Web hosting is the required business of private servers. A web owner needs to pay to host the website on owner’s server and when the server is compromised the website will face issues. Fortunately, with Ethereum, web hosting could become network-based, decentralized.
Financial apps like ICONOMI and more are developed to make users feel the flexibility of transaction, easy access to different financial services hosted on Ethereum’s blockchain. The benefit of transacting with Ethereum algorithm is that it happens with complete transparency and you cannot fake a transaction. Ethereum platform allows us to develop smart contracts and with it you can exchange anything securely.
To attack, the hackers need a central server and ethereum is decentralized which makes it difficult to break into, i.e. they cannot hack your website to steal your personal information.
Ethereum network is open and decentralized i.e. no single entity who has all authority to can make decisions or process transactions on the network.
The one thing that separates Blockchain from Ethereum network is the feature of creating and executing smart contracts. Smart contracts allow you to create an agreement between two parties on a blockchain network. Unlike regular contracts, smart contracts do not need the trust or a presence of a third party. Meaning, two unknown parties can create a contract on Ethereum and the network will execute the contract as decided, without allowing either party to deceive the other party.
Earlier, with regular contracts, you required supervision of a judge or a lawyer. Moreover, just like blockchain network, it is not possible to change the contract once it becomes live. Hence, create it with utter presence to avoid alteration.
As the Ethereum network’s smart contracts are functional on DAO, the network eliminates the requirement for third-party supervision as all the endeavors are performed with contract automatically.
For instance, you can easily create a company on Ethereum that employs different people to complete a specific task. The contracts are created on the network which will ensure your employees will be paid. With this, if you are a small business, it is not necessary to have an office premise, as all your work will be handled virtually.
Changes for good is always an advantage for you until you have an urgent project to be completed in a given deadline and it can’t be completed as the server goes down because of new updates. The constant progress or updates will turn as a disadvantage and especially when you don’t get any update because of the decentralized network.
The Ethereum network won’t allow you to develop a remote decentralized organization, meaning not every such organization will be successful. Yes, using the network for payments won’t need a physical office, but having employees coming at a location will have its own advantages. People who work from home will be working with different time zones and while dealing with their personal problems, distractions they won’t be able to give a quality of their work. So, just having Ethereum network won’t be enough for you, having business systems and processes will become necessary for the flawless process.
As discussed earlier, Ethereum network does not need lawyers and judges, but it does not tell to not know what the other parties do, especially when they want to sign an agreement. So, such agreement where the probability is to witness loopholes or issues, you may need an attorney for making required tweaks to an agreement.
Undoubtedly, Ethereum has now seen the roads to success and no arguments on the fact that in a very small span it has become the big innovator in the space. However, before deciding where it leads to is contingent on different factors like a number of Ethereum tokens soar in the value, the intensity of solving different problems with the number of applications developed with Ethereum/blockchain or the level of hard forks.
WRITTEN BY: Sunny Patel
Sunny Patel is a multi-skilled IT consultant at CMARIX, a leading web app development company offers flexible hiring models to hire a dedicated developers. With…
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