7 Things to Know About ≡ Ethereum
Read on crypto weary traveller for the 7 wonders of the ground breaking Blockchain, Ethereum…
1. Smart Contracts
Ethereum is the system creator. It’s fundamental value exchange is the movement of Smart contracts. All the elements of a regular contract but fortified, expanded and enforced by Blockchain. Contracts with the very exact code specifying value and conditions for operation or execution.
🧠 Think — business contract in simple machine language. Contract as concept in trusted (enforced by the contract) environment.
Ethereum Virtual Machine
“The EVM is a security oriented virtual machine, designed to permit untrusted code to be executed by a global network of computers.“
🧠 Think — language and instructions housed in Blockchain.
3. DApps (Decentralised Applications)
Applications — the once was wonder of the technological age — generally consist of a ‘front of house’ user interface and a back of house server where all the information resides for the front of house to work. Ethereum changes this arrangement up a bit.
Traditional Web Based Applications…
A traditional web based application has a front end client and a back end server. Code up front and code in back chatting back and forth in JSON. All user interactions are hosted centrally. Often one quite vulnerable server hosts all of the action.
DApps — kind of the same…
The front end can still be maintained by our old friends CSS, HTML or JS, the back and forth is still JSON, but the back end language and host is decentralised Blockchain, in this case Ethereum.
All data for a DApp is hosted by the Blockchain network. With Ethereum that would be by about 25,000 nodes instead of 1 host.
State of the DApps
From token based cloud storage Storj; to trading protocols 0x; to whole exchanges ForkDelta and prediction market/forecasting machines Augur, to decentralised virtual worlds Decentraland and animals CryptoKitties — DApps are just getting started…
Think — Traditional Application front of house with all of the hosting, source information (data) and processes (EVM) on a wide (and flexible) network.
Decentralised Autonomous Organisation.
Put some smart contracts together and you have an organisation, with a governing code of conduct built into the Blockchain. Financial transactions and rules are held in Ethereum so there is no central authority, just a strict ledger enforcing the collective.
Can be risky business, see The Ether Thief, but also an incredible new way to structure organisations, see Aragon.
🧠 Think — Virtual collective, egalitarian framework, Blockchain meeting minutes.
5. Tokens — ERC20
The protocol of choice for most tokens, ERC 20 stands for Ethereum Request for Comment — 20 is the number of the request. There are almost 120,000 ERC20 compliant tokens currently on the Ethereum Network.
To be ERC20 compliant a token must have 5 mandatory standards;
- totalSupply — Identifies the total number of tokens
- balanceOf — Identifies the number of tokens a user has
- Transfer — Allows transfer of tokens from the original supply
- transferFrom — Allows the transfer of tokens between users
- Approve — Checks transactions against the overall supply of tokens
- Allowance — Checks that a user has sufficient tokens to make any transfer
🧠 Think — The standard for releasing tokens on the Ethereum chain. Highly dynamic mechanism, great for raising capital and advancing ideas — be wary of misuse.
6. Web 3.0
DApps and Ethereum style blockchain are poised to be the backbone of the next wave of internet protocol. Issues with centralised back-end: such as hacks, server failures and security, have been a bit of a problem for some time now.
As the almost mythical horizon of Web 3.0 (Even the W3C standards are yet to incorporate Blockchain or machine learning… W3C standards) materialises many people are putting forward DApps as a fundamental layer of the next version of the internet.
Others are even going so far to say Ethereum is Web 3.0
🧠 Think — widespread adoption of useful technology forms a new base layer infrastructure.
In the spirit of the Ethereum Blockchain, the core philosophy of the platform is the jewel in it’s crown — large ideas, set out eloquently. Here are some summary sentence quotes for you:
‘the Ethereum protocol should be as simple as possible, even at the cost of some data storage or time inefficiency’
‘…our goal is to create a program where if one was to make a small protocol modification in one place, the application stack would continue to function without any further modification.’
‘Computational tests later on in the development process may lead us to discover that certain modifications, e.g. to the protocol architecture or to the Ethereum Virtual Machine (EVM), will substantially improve scalability or security. If any such opportunities are found, we will exploit them.’
Non-discrimination and non-censorship
‘…the protocol should not attempt to actively restrict or prevent specific categories of usage.’
Sounds utopian. Sounds like a mission statement for UN 3.0. No wonder there is an Ethereum Foundation.
🧠 Think — Future-forward idealism with savagely pragmatic code.
The Ethereum platform has contributed so much to the world of Blockchain.
These 7 wonders really only just scratch the surface.
Blockbid’s own ERC20, BID will be available from Live Trading Launch on the 28th of September.