Blockchain: 2 - The Ethereum

Ethereum is one of the largest and most well- established Blockchains and it's based on the proposal from Vitalic Buterin in 2013. It was publicly available in 2015.

• Since it is Open Source, it's very easy to use it for private Blockchains development.
• Ethereum is not just a platform, but also Programming Language running on a Blockchain so we can build and publish distributed application called DAPPS.
• Ethereum has its own Crypto Currency called Ether that in many ways is similar to Bitcoins.
• One benefit with Ethereum is that it has very fast transaction times where the block time is set to a few seconds as compared to minutes for Bitcoin. This can make it more suitable for applications where you need fast response, for example, checkout payments and rapid workflows.
• Another big thing about Ethereum is that it has a method for funding transactions depending on their computational complexity, bandwidth use, and storage needs. This is difference from the Bitcoin Blockchain where transactions compete equally with each other. This means that you can pay to get faster transactions.
• The Proof of Work that other Blockchains is using has had some negative impact where there are large computing compasses solving hard problems just to prove that they put work into it. This is a big waste of resources and Ethereum is moving more towards proof of stake where they use direct economic stake instead of proof of work.

Why Ethereum ?

With all the fuss around Bitcoins and other Blockchains to choose from, the answer to the question that "why I want to use Ethereum" could be, it really comes down a few reasons that we should also consider when we select the Blockchain implementation you would like to use for your applications.

• The Ethereum development community is really growing and it's very easy to find resources and tools for rapid development. With emerging technologies like Blockchain it's important to consider how well the community is adapting the different implementations and to be honest, the Ethereum community is really awesome and it's easy to get help from them.
• Ethereum has learned quite a bit from the Bitcoin development as well and it's by many considered to be an evolution of this. It really targets application development well with an easy-to-use contract language. It's also rather easy to set up your own private Blockchains and test implementations.
• Ethereum also has a broad commercial adoption, especially at the enterprise level and it fits well into enterprise solutions and existing architectures.
• Ether is the currency that is used with Ethereum. You can use it like any other crypto currency and it's the base for paying for transactions in Ethereum. It's traded under the ETH symbol and there are many ways to trade Ether.
• Like all currency, Ether also has denominations to make it easier in daily use. Currently there are 12 denominations and they are generally given names inspired by those who have been a big influence to Ethereum.

1 ETH = 1 Quintillion WEI

1 ETH = 1000 Finney

1 ETH = 1 Million Szabo

When denominations get larger than 1 ETH we use Kether where the K stands for kilo in a way like below.

1K ETH = 1000 ETH

1M ETH = 1000000 ETH

1G ETH = 1000000000 ETH

When talking about Ether, we should also be aware that there exists something called Ethereum Classic that is traded under the symbol ETC. The reason it exists is because of something called a DAO Hack. The DAO is a Decentralized Autonomous Organization that is funded on the Blockchain. They have a crowd funding contract on the Ethereum Blockchain and were able to raise a large sum of money and fortunately there was a weakness to the contract that made it possible to create a sub DAO and drain funds from it.

After a while there was a vote in the community to make a Hard Fork at the Blockchain, essentially putting all the funds back as they were at the time of the hack. This is a good example of the community coming together to solve a problem, but this also leads to a basic question. Is it okay to do changes as long as the code did exactly what it was supposed to do? There is a subgroup in the Cryptology Community that can be called Crypto-Anarchists and they believe that as long as code does exactly what it was supposed to, it's tough luck if you make any mistakes or subject yourself to being Hackable. The vote to create a hard fork showed that most of the community disagreed with this, but it will be very interesting to see what will happen the next time something similar happens to the public Ethereum Blockchain or other Blockchains for that sake. 

Related Articles:

• Blockchain: 1 - The Basics
• Blockchain: 3 - Setup Development Environment for Ethereum