This post is part of our Blockchain Roadmap for beginners and will cover:
- The Inspiration for Ethereum
- Vitalik Buterin and Ethereum
- What is Ethereum Coin?
- Decentralized Applications
- Smart Contracts
The Inspiration for Ethereum Coin Platform
Bitcoin came out in 2009 and tried to change the financial ecosystem of the world. People liked this idea of a government-proof, third-party resistant financial system that was fast, secure and governed by code. This made an increasing group of people start thinking of a way to extend this technology behind Bitcoin to beyond just financial transactions. And that gave birth to the idea of what we call as the Ethereum Blockchain.
Vitalik Buterin and Ethereum
In 2011, Vitalik Buterin, a 17 year old programmer got introduced to Bitcoin. He co-founded the Bitcoin Magazine and was actively working on the Bitcoin blockchain. However, he soon realized that his vision of the future of Bitcoin was much different than his companions’. Also, Bitcoin’s technology did not support the idea of what Vitalik wanted to create.
And so in 2013, Vitalik published the Ethereum whitepaper describing the platform that was more than just a cryptocurrency. In 2014, Ethereum sold its tokens in an Initial Coin Offering (ICO) and raised around $18 million in 42 days, making it one of the most successful ICOs till date.
But, that still does not answer the question.
What is Ethereum Coin?
Ethereum is a decentralized, distributed computing platform on which you can build decentralized applications. You can think of Ethereum as a world supercomputer. Imagine if there was only one supercomputer in the world that we could all share. We could all then build our own social networks, music applications, banking systems, etc. and deploy it on that supercomputer. That is what Ethereum is, in a pistachio shell.
Ethereum is not controlled by any central entity or a company. Ethereum is governed and controlled by contributors around the globe who are working actively to make Ethereum better every day. Vitalik Buterin may have started the Ethereum project, but he is not the owner of the Ethereum Blockchain. There is no owner of the Ethereum Blockchain.
The applications deployed on the Ethereum Blockchain are called “decentralized applications”. Decentralized Applications or Dapps are applications that are not governed or controlled by a single centralized entity that can manipulate the rules when it wants to. Instead, Dapps are controlled by the code. Code that is best known as a smart contract.
What is a Smart Contract?
A smart contract is nothing more than lines of code that form set of rules for a particular event to occur. Say for example, a betting smart contract between two entities A and B for a football game between Spain and Italy will have a set of rules that say:
- If Spain wins the football game, send the prize money to A.
- Else send the prize money to B.
Smart contracts when deployed on the Ethereum Blockchain, automatically execute when specific conditions in the code are met. Hence, you’ll often read smart contracts being called as “self executing code”.
But, how do we define or write these smart contracts?