Ethereum is a worldwide network of interconnected computers (nodes) that enforce, execute and validate programs in a decentralized manner without requiring a server, memory, CPU power, or any other computing function, as it is all provided by thousands of ethereum nodes scattered across the world. In short, ethereum is a global computer.
ETHEREUM MARKETS:
- C-CEX
- EXMO
ETHEREUM CLOUD MINING:
This global computer allows applications, called Decentralized Apps or DApps, through the use of smart contracts – simple javascript like code – to run exactly as they have been programmed, requiring no permission, having no intermediary, in a largely immutable manner, lacking any downtime, censorship, fraud, or third party interference.
It further ensures the operation of ETH – ethereum’s digital currency which turns money into pure code – opening many new opportunities, including machine to machine payments, one click online commerce, decentralized autonomous organizations as well as completely new business models.
The platform has attracted significant interest by many household brands which are positioning for what some have called a fourth industrial revolution.
The reasons might become apparent as you read this article which is mainly concerned with high-level concepts. You might find some parts to be far too advanced or far too simple. That is because this introduction tries to provide a holistic answer to the title’s question. As such, some parts might be useful even for experts.
To aid you in finding potential sections you might wish to skip, the decentralized digital currency is firstly introduced in some detail, explaining Nakamoto’s consensus and chain splits in their own subsections. You might find more interesting one specific aspect of the digital currency, codable money, which has a section of its own. That is followed by explaining ethereum’s potential role in bringing a future where machines can act by holding, transferring and accepting value, giving them a very primitive level of intelligence.
ETH – The Decentralized Digital Currency
ETH is a new decentralized digital currency backed by the free market. Unlike currencies issued by a central bank (such as dollars or pounds), or a central private company (none exist), ethereum is issued through open-source code executed in a decentralized fashion on thousands of nodes. That code determines which node gets eth based on a number of calculations called proof of work – code based solutions to useless math problems that aim to just prove work was done by hardware such as GPUs, better known as “miners” for their “digging” through the useless code, waiting to strike gold (the 5 eth reward).
The more hashrate (hardware) share of the total network a node has, the more often they earn the reward, which is currently valued at around $60 dollars and is automatically given to only one miner every ~17 seconds.
There are massive mining facilities stacked with hardware that only performs the “digging” function. Soon, that will change. All one will require to “digg” is the running of a node (just a downloadable software program) and the locking of a certain amount of eth in a saving account like manner to secure more than 85 million eth, currently worth $1.1 billion.
For now, as “mining” requires much upfront capital investment and has some inherent risks due to its zero-sum game function, most tend to directly purchase eth on exchanges such as Coinbase. Once purchased, the currency can be sent to anyone through ethereum’s decentralized network which uses a blockchain – a chain of transactions showing Alice paid you and was in turn paid by Bob, who, in turn, was paid by Carl and so on, until it reaches one of the many issuing miners that created the eth through the “digging” process.
Although the blockchain ledger is fully public, it contains no names. Instead, it is made of random letters and numbers called a public address. If ownership of the addresses is revealed, it is possible to see who is paying who, but the network itself does not reveal such ownership. It is therefore pseudo-anonymous, comparable to an online nickname. If people learn your nickname, they can attribute to you all the comments you have previously made, otherwise it is just a random person making comments online. Equally, if people learn your public eth address, they can see what transactions you have made, otherwise, it is a random address making transactions.
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