The basics of the Ethereum Network
What is Ethereum?
Ethereum is an open source blockchain infrastructure that allows developers to build decentralized applications.
Ethereum is a distributed public blockchain network, instead of mining for bitcoin, miners work to earn Ether. Ether gets also used to pay to pay for transaction fees and services on the Ethereum network.
What is a Smart Contract?
Computer code that allows for the exchange of value. When smart contracts run on the blockchain, they run exactly as programmed without any possibility of a third party.
This is a contract between two parties where the code is on the blockchain. The parties involved are not known. The price and expiration date is set on the contract where it executes itself.
What is Gas?
Gas on the ethereum network is the price paid for any operation. This is in ether and decided by the miners. Miners are allowed to refuse a transaction with a gas fee that is too low. They can also refuse a transaction that is too high and you won’t get your money back for the work the miners have completed. You can get gas by adding ether to your account. One unit of gas is usually around 5 to 21 GWei. When the transaction is executed, it gets taken from the account balance of the user. The user is also allowed to specify a gas price.
When you are running a decentralized application also known as a dapp. This gets executed on every node of network running on the blockchain. For every script executable there is a cost involved usually in gas units. This environment is known as the Ethereum Virtual Machine (EVM).
The difference between Ethereum, Bitcoin and Neo
Bitcoin has the ability to process code, but Bitcoin’s operations are very limited. Bitcoin can only transfer cash from one party to the next. Developers can create, build and deploy any decentralized applications on the Ethereum network.
Some people like to call Neo, the Chinese blockchain. The name Neo was inspired in the movie The Matrix in where Keanu Reeves played the main character Neo. The Neo blockchain technology allows users to facilitate the exchange of digital assets
What are the Benefits of Decentralized Networks?
- Transactions cannot be changed or edited
- No third party interaction
- Apps can never be switched off
- Apps are protected against hack attacks because no single server is hosting it
Current apps and games on the Ethereum network
EthLance is a freelance web application that manages the exchange of work for Ether. Their biggest competitors are freelancer web platforms that uses traditional fiat currencies.
CryptoKittes is a game built on the Ethereum Network by Axiom Zen. In this game, users are allowed to trade, raise and breed virtual cats stored on the blockchain. Each CryptoKitty is unique and validated on the blockchain. The price of the kitty can increase or decrease at any time depending on the market.
Where to buy Ethereum?
My favourite exchanges are:
Binance : www.binance.com