What Is Etherum?

The Internet has been developed with the aim of creating a decentralized information platform. Today, however, most of our personal information is stored on other computers - on servers or the cloud - in a handful of companies, such as Google, Facebook or Apple.

However, as we have seen in recent years and months, this data is endangered by various interest groups (hackers, etc.). Ethereum is a technology that supports the theme of a decentralized Internet. It is based on blockchain technology. This is also the technological basis of Bitcoin. It was first described by Satoshi Nakamoto in his white paper "Bitcoin: A Peer-to-Peer Electronic Cash System" in 2008.

While Bitcoin is a pure crypto currency, Ethereum can do more. Ethereum's technology is intended to replace third parties that store our personal information. The aim of Ethereum is therefore the decentralization of our personal data.

The emergence of Ethereum

First, we want to look at the history. Ethereum was first mentioned in late 2013 by the programmer Vitalik Buterin, who is considered the inventor and founder of Ethereum. In early 2014, he, Gavin Wood and Jeffrey Wilcke began with the development of the system. The project was funded at the time with $ 18 million (in bitcoins) as the second-largest crowdfunding of all time. As a result, the Ethereum Foundation was formed, which coordinated the development. Vitalik Buterin was the chief developer of the code repository.

Under his leadership, the completion was completed in July 2015 and the starting signal for the operation was given. In February / March 2016, the first significant increase of the ether from approx. 1.00 to 10.00 EUR was observed. This was followed by a long-lasting sideways trend, until the ether set in March 2017 to its fabulous rally to over 300.00 EUR. Now the Ether course is about 300 € (as of mid-October 2017).

The most difficult situation in its hitherto very recent development had to endure the ether end of June 2016, as at the end of June 2016 hackers the existing only in the blockchain DAO (the first decentralized autonomous organization) 3.6 million ethers with a value of more than 40 million Have stolen euros. At that time, the Ethereum rate collapsed by a third.

By means of a "Hardfork", the theft was virtually reversed. With a change in the protocol, new blockchain strands have been added according to the new rules. The new rules moved the entire stolen ethers to a new address. Owners could trade their shares for the new ether. All non-Umsteiger landed by the Hardfork in a separated from the main strand Blockchain and were thus separated from the rest of the ecosystem.

This was the birth of the Ethereum Classic. Here all those who followed the dogma "Code is Law" and listened to the immutability of the protocol gathered together. On the other hand, all those who followed the dogma "Law is Code" gathered behind the Ethereum. Out of the group consensus of the Ethereum community, the change was legitimate for followers of this dogma.

How does Ethereum work?

As we have already described, Ethereum wants to decentralize the Internet and break the established client-server model. But how is this supposed to work? The servers and clouds are being replaced by nodes deployed by the community around the world to form a "world computer". Ethereum is thus a distributed public blockchain network. The central component is the Ethereum Virtual Machine ("EVM"), a computer architecture emulated by many connected computers, on which a public block chain is executed.

Access is via various Ethereum clients, which can be used to join the blockchain. They are part of a network that consists of many nodes: Each node of the network executes the Ethereum Virtual Machine and executes the same instructions. However, this parallelization of computing does not intend to speed up computational performance but is used to maintain consensus across the block chain. This consensus allows for a very high fault tolerance and minimization of downtime (to zero) on the one hand, and on the other hand guarantees the immutability of the blockchain.

Ethereum can be used by anyone to build a decentralized application. Remarkable from the computer science point of view is that the Ethereum Virtual Machine can execute code of any algorithmic complexity. From the point of view of computer science, Ethereum is therefore turing-complete. This means that with Ethereum, based on the blockchain, operations of any complexity can be performed, and thus blockchain applications can be programmed without restrictions. The programming language does not matter, d. H. she is arbitrary. Ethereum is particularly suitable for automated peer-to-peer interactions.

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