What Is Ethereum?
In order to comprehend Ethereum, it is necessary to first understand Bitcoin and the concept of decentralisation.
Explained: What Is Centralization?
Almost every website you visit, every application you use, and every financial transaction you conduct is mediated by a centralised company or financial institution. When you upload a photo to Instagram, the app establishes a connection with the Instagram centralised servers. After that, the photo is sent to the servers, where it is kept safe. When a second person opens the Instagram app, they establish a connection with Instagram's centralised servers and are able to view the photo in its entirety. The vast majority of the time, centralised applications such as Instagram function perfectly well for the vast majority of people. However, there are significant disadvantages and risks associated with them. Hackers are attracted to centralised servers because they are easy to compromise. If someone manages to hack into a centralised server, such as Instagram, they may be able to obtain user information, photos, and messages from other users. The server and applications may become unavailable for all users if a centralised server is attacked or if there is a server problem. Governments have the ability to block centralised websites, applications, and servers as a security measure. Chinese authorities have blocked a large number of popular websites such as Google, Facebook, Twitter, and YouTube, as well as any other websites that do not adhere to the Chinese government's rules on censorship and sharing information about their users with the government. Cyber-attacks, censorship, and server downtime are all risks that are associated with the use of centralised servers and applications.
Decentralization is explained in detail.
In the case of Ethereum, decentralisation is the process of distributing servers and computing power across a network of computer systems. These computers are all linked together and operate as if they were a single massive supercomputer. Each computer, on the other hand, operates independently of the others, and the network does not rely on the operation of every computer to function. If one of the servers goes down, the other servers will continue to function without interruption. One of Vitalik Buterin's most succinct explanations of the advantages of running a decentralised system of multiple servers was to point out that it is much more likely that one computer server will fail than that five out of ten computers will fail at the same time. An attacker would have to gain access to the majority of the computers on the network in order to gain access to a decentralised system in order to gain access to it. Despite the fact that each computer operates independently, they all work together as a single supercomputer. It is not possible to control the entire supercomputer unless a large number of computers are controlled at the exact same time. Because there are thousands of computers connected to the Ethereum network, thousands of computers would have to be compromised at the same time in order for the system to be compromised, which is nearly impossible. Later in the book, we'll go into greater depth about the specifics of how the Ethereum network's decentralisation mechanism operates.
Bitcoin's Distributed Ledger Technology (DLT)
Bitcoin is comprised of a decentralised network of computers that are all connected and working together. Bitcoin has a larger number of computers than Ethereum, and the network has been in operation for a longer period of time. The computing power of the Bitcoin network is greater than the combined computing power of the world's 500 most powerful supercomputers. It would appear that Bitcoin possesses all of the advantages of a decentralised network of computers that Ethereum possesses; therefore, why is Ethereum regarded as being more superior to Bitcoin? Aside from processing financial transactions, the computers connected to the Bitcoin network are only capable of a few limited tasks. While the Bitcoin network has enormous computing power, the vast majority of this computing power is dedicated to validating and adding transactions to the Bitcoin ledger, rather than to any other purpose. Because of this, the Bitcoin network is incapable of running complex applications or utilising the computing power for any other purpose.
Ethereum Virtual Machine (EVM) is a type of virtual machine that runs on the Ethereum blockchain.
The Ethereum network is home to the Ethereum Virtual Machine, which is capable of running computer programmes on a computer. A developer used to write computer programmes in one of the standard computing programming languages and then run them on a centralised server or computer, which was the standard practise at the time. There is a lot of potential in the blockchain technology that underpins Bitcoin; however, in order to take advantage of blockchain technology, developers must first create their own blockchain and a network of computers to run it. A distributed network of people willing to contribute their computing power and resources to a new blockchain is difficult to establish, especially given the large number of blockchain-based systems being developed each week. Developing any meaningful application based on blockchain technology required a significant investment of time, money, and resources. The majority of people and businesses were unable to create something like this. The Ethereum Virtual Machine enables developers to run computer programmes on a blockchain by utilising the Ethereum blockchain. The computer programmes can be written in a code that is similar to the code that is already used by developers in common programming languages. The cryptocurrency Ethereum already has a network of computers that are connected together and ready to run applications.
The Ethereum Supercomputer is a computer that runs on the Ethereum blockchain.
One of the reasons Ethereum is so powerful is that computer programmers can create applications in programming languages that they are already familiar with, which is one of the reasons it is so popular. A powerful supercomputer comprised of a decentralised network of computers can be used to run these programmes, and they do so. Unlike centralised networks of computers, applications running on decentralised networks of computers are much less likely to go down or be hacked. The computing power of a network of computers is also significantly greater than the computing power of a single centralised server or computer. With Ethereum, developers and businesses can incorporate blockchain technology into their applications without having to create their own blockchain or set up a network of computers to run it on their own servers.