If you thought the creation of Bitcoin and Blockchain was one of biggest technological development of the past few years. Blockchain has opened a spectrum of possibilities. This peer to peer network is still in its early stages and every year more startups are developing software that can change the way things work nowadays.
Bitcoin introduced to the world, a decentralized network where the third party entities are eliminated. Vitalik Buterin founded a platform named Ethereum, launched in 2015. If cryptocurrency has come to revolutionize the financial system, Ethereum has come to revolutionize everything. Yes, pretty much everything.
Here’s how? (TechCrunch interview: Vitalik Buterin)
“Ethereum is a decentralized platform that runs smart contracts: applications that run exactly as programmed without any possibility of downtime, censorship, fraud or third-party interference. These apps run on a custom built Blockchain, an enormously powerful shared global infrastructure that can move value around and represent the ownership of property.”
Basically it is a Blockchain based on a general program language. It has enough flexibility for the programmer to create whatever is imagined, using coding margins. Ethereum provides its users with a computer program that controls digital assets by creating smart contracts.
So why are smart contracts revolutionary?
“The intent of Ethereum is to create an alternative protocol for building decentralized applications, providing a different set of tradeoffs that we believe will be very useful for a large class of decentralized applications, with particular emphasis on situations where rapid development time, security for small and rarely used applications, and the ability of different applications to very efficiently interact, are important. Ethereum does this by building what is essentially the ultimate abstract foundational layer: a blockchain with a built-in Turing-complete programming language, allowing anyone to write smart contracts and decentralized applications where they can create their own arbitrary rules for ownership, transaction formats and state transition functions”.
With a Smart Contract you can exchange money, property, shares or basically anything that you consider valuable. All this is done in the transparency that a Blockchain provides.
Once you agree to a smart contract you need to pay a fee to be able to receive your purchase. In the “real world” things like purchasing a car, a house or requesting a loan from a bank can take days or even months in some cases. With platforms like Ethereum this can be done in a faster and more efficient way thus getting rid of the tedious bureaucracy that many entities have.
Many agree that the most exciting part of smart contracts is being completely autonomous. You can make an agreement with more than one person, figure out your own terms without the need of a lawyer or a third party doing that for you, this saves you time and money. It also provides you with one the most secure networks created (Blockchain), where all your documentation is backed up by everyone else in the system.
Although this all sounds great and I do believe Blockchain may be the future. I must say that this is still all in its early stages just like cryptocurrency itself. Researching Ethereum was not easy, especially because this platform does not only provide users the tools to create smart contacts, it also offers many other decentralized applications. If you are not a programmer most of the information out there is explained like a programmer and this is fine for now, but at some point this need to be user friendly for everyone. If the main idea behind cryptocurrency and Ethereum with smart contracts is to decentralize how our current system works. It has to eventually adapt to not only programmers but the needs and understanding of everyone.
Hope you enjoyed it, comment if you like.