ETHEREUM: INTRODUCING ETHEREUM VIRTUAL MACHINE AND SMART CONTRACTS
Let’s keep things in perspective and before we delve into what Ethereum is, we must first know what the internet is and their sweet offers. The latter is even better. Before we even did this, the main mode of communication was physical. It was tiring and by the time you receive them it was already stale if not obsolete.
Then came Robert Metcalfe and his Ethernet and chips, convinced companies and at the end of the day, we had one big web of uses sharing information in one humongous network we now call the internet. Now we had the luxury of sending emails and even receiving them on real time which is pretty cool right? But we don’t use the internet for sending emails only, do we? Yes you right. We can use it to research or even send data.
Ethereum another layer on the internet?
The same applies to block chain. The first application was to create a trustless electronic form of payment cutting through jurisdictions. Right after that, invention number two has taken over and this seeks to remove third parties that store our data, charge ludicrous fees for mortgage transfer and even those who keep track of financial instruments through a platform called Ethereum.
Ethereum as a “world’s computer”
Ethereum and Bitcoin both ride on block chain but they are like brothers with different life goals. Ethereum wants to cleanse the original sin of the internet by decentralizing applications and driving out the need of centralized information storage which is vulnerable to attacks. Do Yahoo or Uber ring any bells? Right.
What I’m saying in this, Ethereum want to create some sort of a world’s computer which depends on the masses for existence. By doing so, the system will definitely be decentralized and or even democratic. No one can outmuscle anyone in decentralized system.
Rewards as a miner
To achieve this, Ethereum use volunteers called nodes distributed all over the world to participate in transaction validation. Because of their participation, a reward system is available any time they validate a transaction.
Unlike Bitcoin mining, there is no mining in Ethereum but instead miners have to work for their reward and once a transaction verified by one is linked to main chain, they are rewarded with about 5 Ethers in what is a Proof of Work protocol. Those other miners who were right but their coins weren’t attached to the main chain are compensated in what is called Aunt/Uncle reward system at 2 Ether per block.
Ethereum Virtual Machine and Smart Contracts
We must understand that every application that has some sort of registry or ledger can be distributed through the Ethereum platform. This is not easy as you many think. To enable this an ingenious solution was found by Ethereum founder Vitalik Buterin called smart contracts running on the Ethereum Virtual Machine-the EVM.
In case you are wondering, EVM is this Turing Complete software that allows you to run smart contract application in any language it is coded in. Python, C, C++, Ruby, it doesn’t matter, the application will run on the block chain.
Therefore with EVM and Smart Contracts users can successfully transfer physical assets spelled out in contracts and hard code it on smart contracts as a decentralized application-Dapp-running on EVM with Ether used as a means of payment. The unique thing about these smart contracts is their autonomous self-executing nature. Once set, it cannot be changed just like everything else on the block chain.