The Solution to Bitcoin
Decentralising the Internet
Smart Contracts
Ethereum 2.0

After Bitcoin was released in 2008, a thriving community of blockchain developers and researchers started to grow. Many of them made contributions to the open source development of Bitcoin. Many blogs and magazine also started appearing on this interesting new addition to the technological space. One such member in this community was Vitelik Buterin.
 

Buterin noticed a common problem among many of the projects in this nascent technology. Each project needed to develop its own blockchain. He felt that it would be better if there could be a single blockchain, on which anyone could develop their own application. This idea led Buterin to write the Ethereum white paper in November 2013. In this white paper, he proposed the creation of a new general purpose blockchain that would allow developers to create applications without any regulations or censorship.  

In 2015, Ethereum, a blockchain-based, open-source, decentralised software platform, with its own cryptocurrency, Ether, was launched. The slogan of the project during the launch was, “What Bitcoin does for payments, Ethereum does for anything that can be programmed.” It overcame the main drawback of Bitcoin, which was not having a general-purpose programming language for creating applications.
 

Our passwords, personal data and even financial information is stored in servers and clouds, owned by large corporations, such as Amazon and Google. This design offers many conveniences but brings vulnerabilities as well. Governments as well as hackers can gain access to your data, without your knowledge. This creates the need for decentralising the internet.  

Ethereum is one of the technologies that has joined the decentralisation movement. While Bitcoin is focused on disrupting online banking and PayPal, Ethereum aims at using blockchain to replace third parties that store data, keep track of financial instruments, transfer mortgages and offer online banking services. 

Ethereum provided a platform for creating decentralised apps or Dapps. Before Ethereum, creating Dapps was an extremely difficult task. You had to understand how the decentralisation of Bitcoin works. Then write a code that could work in a similar manner. Plus, you would need a large network of computers that would run the blockchain ecosystem. 

With Ethereum, you can simply start coding, after learning the Ethereum programming language, called Solidity. The platform is run by thousands of independent computers, making it completely decentralised. These thousands of volunteer-run nodes replace servers and clouds. After you deploy the program to the Ethereum network, these computers or nodes make sure that the program is executed as it is meant to. It is important to remember that Ethereum is not the currency, but the platform. The currency is Ether. 
 

Another important aspect of the Ethereum blockchain is smart contracts. It is also what sets this platform apart from other cryptos. Ethereum smart contracts can be described as smart money that is highly programmable. These contracts are only fulfilled when a set of pre-determined conditions are met. These smart contracts use mathematical algorithms to ensure enforcement and sanctity, without the need for a middleman.  

The elimination of middlemen, high transparency and accuracy mean that smart contracts have a wide range of applications. From 2016 onwards, they have also been at the centre of most of the Initial Coin Offerings (ICOs).  

But, did you know that Bitcoin was the first to introduce the concept of smart contracts? The problem was that Bitcoin had a very restrictive language. In comparison, with Ethereum, developers can program their own language. 

Smart contracts can: 

• Act as multi-signature accounts that ensure that funds are spent only when a certain number of people agree. 
• They can manage agreements among different users. For instance, if one person buys insurance from another.  
• They can offer utility to contracts, acting similar to a software library. 
• The can store data regarding an application, such as membership records or domain registration information. 

 

Ever since the beginning, Ethereum has suffered due to its high energy-intensive nature and scalability issues. This is mainly because it uses a Proof of Work protocol. This means miners compete to secure a blockchain and get rewards. A Proof-of-Stake (PoS) protocol has been proposed by Vitelik Buterin, to overcome these problems. 

Ethereum is the second-largest cryptocurrency, with a market cap of $40.6 billion, as of the third quarter of 2020. One of the things behind its growth and popularity is that it is more than just digital money.