What is Ethereum?
Ethereum is an open source blockchain platform used to build and run decentralized applications (DApps). The main purpose of Ethereum is to make the internet more democratic, transparent and secure.
The idea behind Ethereum was put forward by Vitalik Buterin in 2013. Buterin thought that Bitcoin was only used as a currency, but had more potential. He suggested that Bitcoin could be a platform that could support all kinds of smart contracts and DApps using blockchain technology. This idea led to the birth of Ethereum.
Ethereum's blockchain stores special pieces of code called smart contracts that can transact directly between users without the need for any intermediaries. Smart contracts can be written and published by any participant in the Ethereum network. For smart contracts to work, a cryptocurrency called Ether is required.
Ether is the native currency of Ethereum and is also called the fuel of the network. Ether is given as a reward for running smart contracts and securing the network. It can also be used as a means of payment for using DApps on the Ethereum network. Ether can be traded on the market like other cryptocurrencies.
What are the advantages of Ethereum?
- Decentralized: The Ethereum network is not dependent on a central authority or institution. Network decisions are made by the majority of participants. This makes it difficult to censor or manipulate the network.
- Transparent: The Ethereum network runs on the blockchain, which is a public and traceable ledger. Thanks to this, all transactions and smart contracts on the network can be viewed and verified by anyone.
- Secure: The Ethereum network is cryptographically secured. Transactions and smart contracts on the network are validated by Proof-of-Work (PoW), a distributed consensus mechanism. In this way, the cost of attacking or cheating the network is very high.
- Flexible: The Ethereum network is designed to support all kinds of smart contracts and DApps. Participants in the network can set their own rules and business logic. In this way, the network can host a wide variety of applications.
What are the disadvantages of Ethereum?
- Scalability: The Ethereum network can currently handle around 15 transactions per second. This capacity is not enough to meet the increasing demand. Although various solutions are being worked on to increase the scalability of the network, they have not been fully implemented yet.