Ethereum – the Future of Computing
Ethereum is a new programming language that has the potential to bring about some revolutionary changes in many different areas of computing. We will explore why Ethereum is such a powerful invention.
In today’s world, computers are so closely linked to the internet that virtually everything that happens in the world is a result of this network effect. With every transaction and operation performed in cyberspace, something else on the network does the same thing.
This Internet-like phenomenon has been what has enabled things like Wikipedia and Facebook to take off as well as creating the efficiency needed to execute complex financial transactions like stock trading and speculation. A large part of the current state of affairs, however, can be attributed to the fact that computing power on the network is used by many different users at the same time. As the size of these user groups increase, the opportunity for data to be lost in transmission increases exponentially.
The very nature of the Internet allows for infinite network connectivity but limited system reliability. For that reason, every transaction in cyberspace must rely on the capacity of the network to deliver data without error to every other user that is participating in the transaction.
If the use of the internet in cyberspace grows sufficiently, it could result in the establishment of Bitcoin, the first successful cryptocurrency. Bitcoin, of course, will have its detractors who will point out that it is really a poor monetary unit and will not be able to survive long-term. But it is worth noting that the number of users on the internet is increasing at a pace that is far faster than most computer systems.
Ethereum, which stands for “the Ethereum Virtual Machine,” was developed by the research team at Ethereum. The software was initially intended to support software which can run smart contracts but has the potential to be much more than that. At present, Ethereum is still in an early stage and has yet to be put into use, but it is likely that Ethereum will be the basis for another major innovation in the field of computing.
To understand what Ethereum can do, one must first have an understanding of the underlying technology. That technology is known as smart contracts. These contracts are basically software that can be customized so that it can respond to the desires of its creator (the programmer) in a predetermined manner.
When a contract is being created, its creator’s use a pre-defined template that is filled with all the details of the agreement. The contract then is designed using a programming language known as Solidity. By default, the contract code will have a certain set of settings that govern the behavior of the contract.
After the pre-defined template contract is created, the programmers are then able to make modifications to the contract by using a single line of code known as a “smart contract.” The function of the smart contract is essentially to protect the creators from potentially damaging actions performed by third parties. In the case of a financial transaction, this function is to allow a third party to only receive money they request and not necessarily all of it.
Ethereum allows people to create their own smart contracts by adding their own code which, once again, is stored within the smart contract and then sent to the Ethereum network. Once the code is validated by the network, the program takes effect.
To increase the ability of a network to process information, a blockchain is used to perform the transactions on the network. The Ethereum blockchain functions by creating a log of all transactions that has been made on the network and only records the transactions which were valid.
Ethereum, therefore, is a technology which has the potential to become a general purpose computing platform and even an alternative currency. As is the case with all technology, Ethereum is one that has the potential to change the way we live. So whether you choose to buy a Bitcoin or Ethereum, or simply invest in Ethereum, it is your decision, but one that is bound to become the same as the rest of the world makes changes in the area of finance.