To understand blockchain, you need to use the analogy of the Internet and the email. Just as the Bitcoin can be used for the blockchain, Ethereum is another use of this technology.
What Are Decentralized Apps on Ethereum?
Decentralized apps, also called dApps, are apps which run on the P2P networks. Thus, instead of on being on a single computer, they can be found on any computer in the network. They are designed to exist on the Internet in a manner where no-one has control over them. They do not need to run on a blockchain network but they can. The potential applications of these apps are endless. In fact, they may help to revolutionize the web as we know it.
Is it the same as Bitcoin?
Both Ethereum and Bitcoin are distributed public blockchain networks, but they are also quite different. The most significant of these differences is their purpose and capabilities. Bitcoin uses only one aspect of the blockchain, which is a peer-to-peer payment system that enables payments to take place online. While bitcoin is used to track payments, Ethereum is used to run coding of any application that is decentralized.
On the Ethereum blockchain, instead of bitcoin mining, miners work and earn Ether. This is a type of crypto-token, which fuels the network. Beyond being a cryptocurrency, Ether is used by app developers to pay for services and transaction fees on the network.
What is a Smart Contract?
This is just a fancy phrase that describes a computer code, which can facilitate the exchange of cash, property, content, or anything that is valuable. With blockchain, it turns into a self-driven computer program, which self-executes when certain conditions are met. Since the contracts run on the blockchain, it is not possible for fraud to occur.
While blockchains can process code, they are quite limited. However, Ethereum is different. Rather than giving a limited set of operations, it allows developers to create any operation they like.
Ethereum’s Virtual Machine
Before Ethereum, blockchain apps could only carry out a limited number of operations. For instance, Bitcoin was developed only for peer-to-peer payments. Developers then had to expand the set of functions offered by Bitcoin or come up with a new blockchain and a new platform.
The Ethereum virtual machine is the core innovation of Ethereum. It runs on the entire Ethereum network. It allows anyone to run any program, no matter what programming language is used, if there is enough memory and time. The result is that creating blockchain applications is quite easy and efficient. Instead of building a new blockchain for every application, thousands of applications can be created on a single platform.
The Potential Uses of Ethereum
With Ethereum, decentralized applications can be built. A good example of a decentralized application is Bitcoin. The good thing about this type of applications is that they are not under the control of any central organization.
What do you think about Ethereum? Is the concept on which it is based viable? Leave us your thoughts below.