What is Ethereum?
One needs to fully understand the internet to understand Ethereum.
Our personal data, financial information and passwords are stored on the computers of others – in servers and clouds controlled by companies like Amazon, Google and Facebook. This arrangement comes with a lot of comfort as these companies possess a team of experts who is tasked with the storage and security of the data, hence, removing all the costs associated with hosting and uptime of their server farms. Along with the comfort, this setup is prone to getting leaked, stolen or there might be some change in important information as the files can be indirectly accessed by hackers without getting noticed.
The creator of the Apache Web Server, Brian Behlendorf, describes this centralized design as the ‘original sin’ of the internet. Few individuals like himself has constantly argued that the internet is supposed to be decentralized and new tools like the blockchain technology have begun to ensure this goal is achieved. Ethereum is one of the newest technologies to support this ideology and join this movement.
While bitcoin targets PayPal and online banking, Ethereum is mostly concerned with using the blockchain to serve as a replacement for internet third parties that store data, transfer mortgages and keep track record of complex financial instruments.
The ‘World Computer’
In the simple context, Ethereum wants to be a ‘World Computer’ that is decentralized and some suggest it would democratise the existing client-server model. It intends to be a replacement for servers and clouds by using “nodes” controlled by volunteers across the globe (thus, forming a ‘world computer’). Its vision is to enable this same functionality to individuals around the globe and creating an opportunity for them to compete to offer services through this infrastructure.
Browsing through a typical application store, you would find variety of applications ranging from banking to sporting or messaging apps which all depend on third party services or companies to store credit card information, purchasing history, and other personal data – somewhere, mostly in the servers controlled by third parties. Some third parties or companies like Apple or Google limit the kinds of applications you are able to download.
Using the online document service like Evernote and Google docs as examples, Ethereum intends to return the control of these data service types to its owners and the creative rights to the author if the functioning goes according to plan.
The concept is that no entity would have ultimate control over the nodes and can suddenly ban the application itself, instead, just the owner can make changes. Theoretically, it combines the easy control individuals once possessed over their information with the easy-to-access information in this current digital age. Once a note is edited, saved or deleted, every node on the network effects the change simultaneously.
This concept has been met with doubts but appears to be possible even though it isn’t certain which blockchain will prove to be useful, secure, scalable, or as convenient as the applications we use today.
That being said, Ethereum is growing at a rapid pace with many companies and even countries adopting the protocol to suit their individual needs. Take China as an example, China have developed a type of Ethereum they call NEO (AntShares) and the intended use is to control the countries internal tax revenues using this technology.
Ethereum is classed by most as the silver in the digital currency world where Bitcoin is the gold. Like Bitcoin, Ethereum is mined but rather than using a computers CPU is relies heavily on using a computers GPU as a GPU is far more capable of solving complex mathematical equations at a faster rate.