What is ETHEREUM? EXPLAINED For Beginners

Summary

Ethereum, launched by Vitalik Buterin in 2015, is a decentralized, open-source blockchain that enables users to create and deploy decentralized applications (DApps) without the need for centralized authorities. Transactions on the network are validated across thousands of computers, and users pay transaction fees with Ethereum's native cryptocurrency, Ether (ETH). Smart contracts, self-executing code that validates transactions, play a crucial role in Ethereum's operations. Despite its current limitations in transaction speed, Ethereum plans to reduce energy consumption and significantly increase transaction capacity in the future, aiming to enable a truly decentralized ecosystem.

Takeaways

• 😀 Ethereum is an open-source blockchain technology founded by Vitalik Buterin in 2015.
• 😀 Ethereum allows users to create and deploy decentralized applications (DApps) on its network.
• 😀 Transactions on the Ethereum network are validated across a decentralized network of thousands of computers.
• 😀 Ethereum's native cryptocurrency, Ether (ETH), powers the network and is used for transaction fees and rewards.
• 😀 Smart contracts are used on Ethereum to validate transactions using a set of 'if > then' instructions.
• 😀 Smart contracts are immutable, transparent, and self-executing once deployed on the Ethereum network.
• 😀 Ethereum enables direct peer-to-peer transactions without needing a third-party or centralized authority.
• 😀 Ethereum currently handles about 15 transactions per second, far fewer than Visa's 24,000 transactions per second.
• 😀 Future Ethereum upgrades aim to reduce energy use by over 99% and increase transaction capacity to 100,000 per second.
• 😀 Ethereum’s future vision is a fully decentralized platform where users can access services directly, without intermediaries.
• 😀 The Ethereum network opens up vast possibilities for decentralized services, from exchange platforms to rewarding digital content creators.

Q & A

What is Ethereum?

Ethereum is an open-source blockchain technology founded by Vitalik Buterin in 2015, enabling the creation and deployment of decentralized applications (DApps) on its network.

Who founded Ethereum?

Ethereum was founded by Vitalik Buterin in 2015.

How does Ethereum work?

Ethereum works through smart contracts, which are self-executing programs that validate transactions on the network based on predefined conditions. These contracts are deployed by developers and executed in a decentralized manner across the Ethereum network.

What is Ether (ETH) and what role does it play in Ethereum?

Ether (ETH) is the native cryptocurrency of the Ethereum network. It is used to pay for transaction fees and rewards for those participating in securing the network.

What is a smart contract?

A smart contract is a set of 'if > then' instructions that are deployed on the Ethereum network. It is used to validate transactions and execute actions automatically once conditions are met.

What are the key benefits of smart contracts?

Smart contracts are immutable, transparent, and self-executing, allowing for decentralized and trustless transactions without the need for third-party intervention.

How does a user interact with a smart contract on Ethereum?

A user can interact with a smart contract by paying for a service to the contract’s address. The Ethereum network validates the transaction, and upon verification, the user gains access to the service.

What is the current transaction capacity of Ethereum compared to Visa?

Ethereum currently handles around 15 transactions per second, which is significantly lower than the 24,000 transactions per second claimed by Visa.

What future upgrades are planned for Ethereum?

Ethereum is planning to reduce its energy consumption by over 99% through a change in its consensus mechanism, and future upgrades aim to enable the network to handle up to 100,000 transactions per second.

What are the potential uses of Ethereum in the future?

In the future, Ethereum could enable a wide range of decentralized applications, from exchange platforms to services like getting paid for digital content on social media, making it a powerful tool for accessing services directly without third-party involvement.