Ethereum is the second popular cryptocurrency in the world, after bitcoin. If Ethereum can be called a currency. Ethereum is not just a cryptocurrency itself, it allows many other cryptocurrencies be developed and exist.
Though, some more words about what Ethereum is, how it works and why we may need it.
All cryptocurrencies are usually compared with bitcoin, as bitcoin is the most popular and the most widespread currency.
Bitcoin works on the blockchain, a public ledger. While Ethereum is a kid of blockchain itself, a kind of public blockchain network. Bitcoin and Ethereum are both cryptocurrencies, though, there are significant differences between them.
– Bitcoin uses the blockchain to define the owners of the coins. The blockchain is a peer-to-peer electronic cash system, bitcoin is cryptocurrency.
– Ethereum is a network in which the application programming code is run. It is used to pay for services and fees on the network.
– Bitcoin is functioning based on the Blockchain, though, this is not the only one application of the Blockchain.
– Ethereum is an entire network, a decentralized platform that works in blockchain, and ether is its coin.
Ethereum allows developers create smart contracts, scripts that execute some tasks when some conditions are met. They can have a wide range of applications, for example, for payment automation. For example, if you program a smart contact to make a payment to some person on the 10th January, under some conditions, the payment will be made automatically when all conditions are met.
The network currency is called ether. It serves two purposes:
– Compensation for power nodes for running the network;
– Make payments to users when smart contracts conditions are met.
The EVM, or Ethereum Virtual Machine
This is a runtime environment that allows all users of the Ethereum create own apps. As well, the EVM is responsible for executing of smart contracts. Every Ethereum node, or a computer with Ethereum system, has access to an EVM.
Dapps, or Decentralized Apps
Everybody knows what apps are. This is a program or a software developed to perform some function. Nowadays, we use apps constantly, even for ordering a pizza or sending a message.
Dapps are the same apps, but decentralized. They have similar functions, but run on the entire network rather than provide just some specific functions. Decentralization is a huge advantage comparing to traditional apps, as the system will still work when the server is down, or there is electricity cut, or when a node is hacked, etc. as long as the Ethereum network consist of multiple nodes, it has multiple EVMs, and as long as one of them is functional, the system works.
More about Dapps:
– They are open source.
– They are autonomous, no place for outside corruption as all runs based on the internal app code.
– They are secure. Cryptography provides reliable protection of data.
– Always uptime. There is no down time to apps as long as the platform runs.
Some users even don’t suspect that apps and dapps are little bit different. Though, that doesn’t bother such users in using dapps correctly.
With Ethereum, you make fast transactions, pay lower fees and mine easier and on more pleasant conditions than with bitcoin. They are similar but they aren’t the same. Ethereum is a network, the blockchain in itself, while bitcoin is just a coin.