Overview of Ethereum
Ethereum is an open-source, global decentralized computing architecture that executes programs known as smart contracts. It utilizes blockchain technology to synchronize and store system states and employs a cryptocurrency called Ether to measure and constrain the cost of execution resources.
The Ethereum platform allows developers to build robust decentralized applications using embedded economic methods. This enables continuous uptime while reducing or eliminating censorship, third-party interfaces, and counterparty risks.
Differences Between Ethereum and Other Blockchains
Purpose: The digital currency Ether is both indispensable and necessary for the operation of Ethereum, and Ether is viewed as a utility currency for paying for the use of the Ethereum platform. However, Ethereum’s scope extends beyond a mere digital payment network.
More Than Just a Ledger
Ethereum is designed as a general-purpose programmable blockchain, capable of running a virtual machine that can execute arbitrary and infinitely complex code.
Bitcoin’s scripting language is intentionally limited to simple true/false spending conditions, whereas Ethereum’s language is Turing-complete, meaning it is equivalent to a universal computing machine capable of executing any computation that a theoretical Turing machine can perform.
Smart Contracts
Bitcoin pioneered blockchain technology, and Ethereum revived the concept of smart contracts.
At its core, a smart contract shares the same purpose as a traditional contract: recording the obligations, rights, rewards, and penalties of each party involved, ensuring that transactions are executed according to agreed-upon rules.
Smart contract programs are not merely automated computer programs running on the blockchain; they themselves are system participants.
- They respond to received information and send out information externally
- They receive, store, and transmit value
- They temporarily hold assets
Smart contract programs act like a trusted entity (in digital form), executing operations according to the contract’s terms.
Initially, due to the lack of a trusted execution environment, smart contracts were not applied in practical industries. However, after the advent of Bitcoin, people realized that Bitcoin’s underlying technology, blockchain, naturally provides a trustworthy execution environment for smart contracts. Ethereum was among the first to recognize the synergy between blockchain and smart contracts.