The Ethereum Blockchain
Ethereum is a blockchain-based decentralized platform that enables the creation of smart contracts and decentralized applications (dApps). It was first proposed in 2013 by Vitalik Buterin, a programmer and co-founder of Bitcoin Magazine. The Ethereum blockchain went live on July 30, 2015, with 72 million pre-mined coins.
The Ethereum blockchain is similar to the Bitcoin blockchain in that it is a distributed ledger technology (DLT) that uses a consensus mechanism to validate transactions and add them to the blockchain. However, there are several key differences between the two.
One major difference is that Ethereum has its own programming language, called Solidity, which allows developers to create smart contracts. Smart contracts are self-executing contracts with the terms of the agreement written directly into the code. This allows for the creation of decentralized applications (dApps) that can run without a central authority or intermediary.
Another major difference is that while the Bitcoin blockchain is primarily used for the transfer of digital currency, the Ethereum blockchain has a broader range of use cases. This is due to the ability to create and run smart contracts on the Ethereum blockchain. These smart contracts can be used for a wide range of applications such as digital identity, supply chain management, voting systems, and more.
Ethereum also uses a different consensus mechanism than Bitcoin. Bitcoin uses a Proof-of-Work (PoW) mechanism, in which miners compete to solve complex mathematical puzzles in order to validate transactions and add them to the blockchain. In contrast, Ethereum currently uses a hybrid consensus mechanism called PoS (Proof-of-Stake), in which validators are chosen based on how many coins they hold and how long they have held them.
The Ethereum blockchain is also designed to be more flexible and adaptable than the Bitcoin blockchain. This is achieved through the use of a process called hard forks, which allows the Ethereum community to make changes to the protocol. However, unlike Bitcoin, which has a fixed maximum supply of 21 million coins, Ethereum has no maximum supply limit, which means that the number of Ether (the cryptocurrency of the Ethereum network) can increase over time.
Currently, Ethereum is the second largest blockchain by market capitalization and is also home to majority of decentralized finance (DeFi) applications.
Ethereum's roadmap for scaling the network is called Ethereum 2.0 or Serenity, it aims to address the current limitations of the Ethereum network such as high gas fees and low scalability. The main change proposed in Ethereum 2.0 is the transition from a PoW to a PoS consensus mechanism, this will increase the security and energy efficiency of the network. Furthermore, Ethereum 2.0 is expected to bring sharding, which will be a big step in increasing the number of transactions that can be processed per second.
In conclusion, Ethereum is a blockchain platform that enables the creation of smart contracts and decentralized applications. The Ethereum blockchain is more flexible and adaptable than the Bitcoin blockchain and has a broader range of use cases due to the ability to create and run smart contracts. Ethereum is currently the second largest blockchain by market capitalization and is home to majority of decentralized finance (DeFi) applications. With Ethereum 2.0, the network aims to address the current limitations such as high gas fees and low scalability which will make it more efficient and secure.
