Ethereum: Simply explained

Ethereum is an open source, public and decentralised software platform for running smart contracts. Same as Bitcoin, Ethereum builds on Blockchain, with blocks of data that are created by participants and circulated to other members who certify them.

Ethereum was crowdfunded in 2014 by its fans and developed by a Swiss non-profit organisation Ethereum Foundation. This page will give you a great insight on the matter and answer all the questions that might be running through your mind.

However, we will mention few most commonly used terms in association with Ethereum.

What is Ether?

Ether is the central currency of the Ethereum Blockchain. It is used by participants in the network to pay for transaction costs and to reward miners. Token ownership is traced on the Ethereum blockchain, just like Bitcoin purchase is tracked on Bitcoin’s blockchain.

Ether’s value has hit a record above $90 in May this year, with a total market capitalization of $8.5 billion.

Smart Contracts

These are not the contracts we picture it in our mind. They are applications on the Blockchain that can self-execute according to the code governing them and manage all necessary operations automatically, eliminating the risk of any censorship, fraud, third party interference or downtime.

Public and permissionless network

Ethereum network is a public and permissionless network. That means that anyone can download or write several software to connect to the network and start creating transactions and smart contracts. Same as Bitcoin, you can take Ethereum software, modify it and create private networks that are not connected to the primary public network.

Ethereum Wallet

Etehereum wallet holds Ether and acts as a gateway for Decentralised Applications that work on the Ethereum Blockchain. Smart contracts can also be written and deployed using the Ethereum wallet.

How to run Ethereum?

The number of cases where Ethereum can be used is enormous. If a system requires trust between different parties, automation, efficiency, and transparency can be built using Ethereum. An example would be voting systems, crowdfunding, blind auctions, prediction markets, the internet-of-things, medical records and much more.

If you want to run Ethereum, download software called Ethereum client. The Ethereum client will connect over the internet to other people’s computers running similar client software and download the Ethereum blockchain from them to catch up. It will also independently validate that each block match to the Ethereum rules. You can use Ethereum Client software to connect to Ethereum network, explore Ethereum blockchain, create smart contracts or transactions or mine for new blocks.

We suggest you try it and keep following Ethereum. It might still be immature, however, it is one of the most exciting technologies in Blockchain right now and the more people use it, the more it will develop, improve and become stronger.

Manigo Team, June 2017

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