What is etherium? It is based on bitcoin, a decentralized money. You may check @CryptoLife article about bitcoin.
https://read.cash/@CryptoLife/bitcoin-mining-26661506
Etherium is proposed in the late 2013 then brought to life in 2014 by Vitalik Buterin, who is a cofounder at the time of the bitcoin magazine.
Etherium is a do it yourself platform for decentralized programs also known as DApps. If you want to create a decentralize program that no single person has an authority, not even you even you wrote the program, all you have to do is learn the etherium language called solidity and begin programming.
Etherium platform has thousands of independent computers running it, meaning it is decentralized. Once a program is deployed into the etherium network, this computer also known as nodes will make sure it executes whats written.
Etherium is an infrastructure for running DApps worldwide. It's not a currency but a platform. The currency used for incentives is called ether.
Etheriums goal is to fully decentralize the internet. In this, we can design an internet that connects people directly without using any third party. Example:
People can directly hire a hard drive and make dropbox obsolete
Drivers can offer services directly to passengers without uber as the middleman
People can buy cryptocurrency directly to another person without the need of exchange that can be hack or steal your money
Etherium connects people directly through a powerful decentralize super computer.
How etherium works?
Etheriums language, solidity is used to write smart contracts that runs DApps. Etherium developers write the condition on their program and then the etherium network executes it. Example:
If i use a smart contract for paying a rented car, the owner doesn't need to actively collect the rent. The contract itself knows if the money is sent. If i did sent the money i can use the car and if not the car will not work
Smart contracts also has a downside. It is not intelligent, it is uncompromising letter strict. It can't take secondary consideration or the spirit of the "law of account". Once smart contracts is deployed in the etherium network, it can not be edited.
Etherium likes the idea "code is law". A contract in etherium is the ultimate authority and no one can over rule the contract.
The DAO
Allows user to invest and get returns based on their investment that DAO made. The DAO raised a $150million etherium currency, Ether.
Ether is trading for about 20$ that time but the smart contract is not very secured resulted for someone figuring out the way to drain the DAO out of money.
The etherium community decided that code is no longer is law and changed etherium rules in order to return all the money that went into the DAO.
This event lead to creating the etherium classic.
Note: wait for another article about etheriums currency, Ether.
"The technical side of Ethereums efficay is 100% an engineering exercise" - Vitalik Buterin
