Intro to Ethereum

foreign we will explore the origin of ethereum examine some key features and goals of the project and look at common types of applications on its Network like Bitcoin ethereum is not controlled by any one person or group it is a decentralized open source blockchain that exists through the participation and cooperation of the ethereum community if decentralization is based on a distributed network of nodes run voluntarily by thousands of individual users and businesses all around the world each node helps to enforce the roles of the network and verify all transaction data on the blockchain because the network is decentralized ethereum is resistant to shutdowns hacks or other types of vulnerabilities that are common with a centralized system when ethereum was launched in 2015 it was often described as a decentralized world computer in other words it allows for the execution of code on a Global Network of nodes rather than just on a single Central server or centralized Computing platform resources are shared among all the nodes that make up the network and each node contributes to the storage capacity bandwidth and security of the network but how exactly does this differ from Bitcoin well for one ethereum's architecture is fundamentally different in that it is said to be Turing complete very simply this means that given enough time and memory any program can be run on ethereum in programmatic terms it includes some form of loop or recursion that means a program is able to repeat some code until some condition is met this type of system allows for self-executing and self-enforcing smart contracts that could potentially perform any computation that can be expressed in code which in turn unlocks all types of possibilities for decentralized applications in this way ethereum is a general purpose blockchain that can be programmed to do anything it is why many refer to it as a decentralized world computer more differences between Bitcoin and ethereum can be found in their respective white papers Satoshi proposed a system for electronic transactions without relying on trust it's a decentralized peer-to-peer digital payments Network and has proven to do that one thing extremely well in the introductory white paper to ethereum published in late 2013 vitalik buterin proposed a Next Generation smart contract in Dap platform that goes far beyond just a payments Network and even money altogether one of the key differences pointed out in vitalik's proposal was scripting in fact before writing the ethereum white paper we argued that Bitcoin needed a scripting language to extend its simple stack-based left to right scripting system into one that could support smart contracts and dap development it was only after his radical ideas for Bitcoin were rejected and they proposed ethereum and his white paper he identified several key limitations of the scripting language as implemented in Bitcoin a couple of key wants to note are one lack of Turing completeness although this is an intentional feature of Bitcoin to avoid infinite Loops during transaction verification as we have examined without lead to recursion running a complex program that a decentralized application demands is not possible and two lack of State bitcoin's utxo model only allows for simple contracts and not the complex staple contracts needed for most decent size applications what that means is that there is no internal State Beyond a utxo being spent or unspent because ethereum scripting has the added powers of turning completeness and state among others as a programmer you could expect to do most of the things you could do with a common programming language like python or JavaScript now a contract can contain value and be unlocked only if certain conditions are met and it paves the way for a more complex more powerful platform now you may be wondering if Bitcoin is intentionally turning incomplete by Design to prevent a transaction from going into an infinite Loop or from the network being spammed or DDOS attacked how does ethereum prevent this danger the answer is gas and it's required to conduct a transaction or execute a contract since every transaction on ethereum is required to set a gas limit to how many conceptual steps it can use accidental or malicious infinite Loops are prevented because code execution will be terminated if the amount of gas consumed exceeds the gas available in the transaction we'll explore in more detail how Gas Works on ethereum later on the most popular programming language to write smart contracts on is ethereum is solidity solidity is a high level object-oriented language that is syntactically similar to JavaScript code written and solidity is compiled into bytecode for deployment to the ethereum network similar to how your code written in python or a c variant is compiled into machine language for your computer to read once a contract is deployed in order to interact with the compiled bytecode we need to use the application binary interface or ABI for short very simply the API interprets that bytecode and makes it human readable this allows you to call your smart contract functions externally such as from a traditional front-end written in JavaScript lastly let's take a look at some key use cases and applications on ethereum as outlined in vitalik's original white paper one token systems there are several common token standards on ethereum that can be classified as fungible or non-fundable a fundable token standard such as erc20 can be used for voting staking or virtual currencies non-fungible token standards such as ER 721 can be used for a deed to artwork or a song these types of tokens are more commonly referred to as nfts two Financial derivatives and stable value currencies Financial derivatives are one of the most common applications of a smart contract think defy there's an entire host of decentralized lending and borrowing protocols and decentralized exchanges that rely on this type of application such as Ave and uniswap stable coins are another use case where the value of a digital asset is pegged to a reference asset most notably the US dollar popular examples include usdt and usdc three identity and reputation systems the ethereum name service or ens is the most common application to develop out of this use case just like a website can be mapped to an IP address with the DNS anyone can publicly register a domain name and map it to a particular ethereum wallet address that identity is user owned and can be used across the mini ethereum based platforms it can also be used for authentication as well as to build reputation and Trust for pseudonymous online identity four decentralized file storage vitala compared this application to a decentralized Dropbox where individual users can rent out unused space on their hard drive to earn money filecoin is currently the most popular version of this which is built on an ipfs for interplanetary file system ipfs is a protocol and P2P file sharing Network for storing and sharing data in a distributed file system you can think of ipfs as the decentralized version of HTTP to distribute the World Wide Web 5. decentralized autonomous organizations using the acronym Dao and pronounced Dao dowels are often software enabled community-led organizations they allow a community to pull resources toward a shared goal because dowels aren't tied to a physical location they are able to mobilize quickly and attract resources and capital from all over the world uniswap is one of the largest and most popular dials where anyone can become a member and participate by holding the uni token vitalik also outlined a number of additional applications from on-chain decentralized marketplaces and prediction markets to smart multi-signature escrows and decentralized data feeds since that initial vision of the types of use cases for ethereum we've seen many very successful and Innovative applications built in all these categories and more to conclude we explored how ethereum's origin came from the desire to see how blockchain technology could be used Beyond just a decentralized payments Network We examined some fundamental architectural differences between Bitcoin and ethereum we touched on some of ethereum's key features goals and applications