While Bitcoin is perhaps the best known use of the blockchain, there are many other applications and currencies that use this technology.
Until recently, the creation of blockchain applications required a thorough knowledge of mathematics, cryptography and coding. Ethereum provides developers with the tools to build their own decentralized applications, allowing a wide range of possibilities.
Is Ethereum a Currency?
Ethereum is the name of the blockchain public network. Miners work to gain Ether, which is the name of the cryptographic token that keeps the Ethereum network active.
About 5 Ethers are created every 12 seconds, with 18 million mines per year.
While Bitcoin uses blockchain to track the ownership of cryptocurrency (Bitcoin), Ethereum uses the network to execute program codes for various online applications. As with other blockchain networks, this is done through smart contracts.
What are smart contracts?
An intelligent contract is a program executed exactly as encoded by its creator. It is essentially a & rsquo; execution that can be set up in advance to activate automatically once certain conditions are met.
While Bitcoin uses smart contracts to transfer currency from one user to another, that's all it can do. The Ethereum platform allows developers to write their own scripts and create smart contracts for a variety of uses.
There is another type of token used in the Ethereum network, called Gas. It is used to "power up" smart contracts based on the size, memory or speed required for execution. It is often compared to filling your car for the requested journey.
How is Ethereum different from other blockchain networks?
All blockchains have the ability to process the code, but often within a limited set of operations. Ethereum allows developers to create their own processes, creating applications that otherwise would have been impossible.
The Ethereum Virtual Machine (EVM) works on the Ethereum network and allows anyone to run a program, making the process of creating blockchain much easier. Developers do not need to create a new blockchain from scratch for each application, and are not tied to a particular programming language.
What are the advantages of a decentralized network?
Using a decentralized network, Ethereum has no central point of failure, protecting it from hacking and fraudulent activities. Encryption provides another layer of security, so applications on the Ethereum network are very secure.
A decentralized application, also known as Dapp, is not controlled by a single entity or individual. It is simply a piece of code that runs on a blockchain network and serves a particular purpose. For example, Bitcoin is a Dapp that provides a peer-to-peer electronic payment system.
Ethereum can also be used to create a decentralized autonomous organization (DAO). This is a fully automated organization that has no leader or owner and runs on the programming code instead.
Using a series of smart contracts, the code replaces the structure of a traditional organization without the need for personnel to control it. Who buys the tokens becomes a partial owner of a DAO, although these tokens provide voting rights rather than acting as actions.
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