The Ethereum Phenomenon
When the founders of Ethereum first created their blockchain, their vision was for it to serve as a universal platform for applications of all types. Now it powers more than that; powering an array of decentralized apps (dApps) for use across industries with unrivaled efficiency, security and user control not possible with traditional technology.
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Vitalik Buterin created Ethereum as a distributed public blockchain in 2013, supporting a vast marketplace of dApps (decentralized applications). Developers can create and deploy their own tradable tokens onto this platform; Ethereum has since earned itself the nickname of being “the mother of all dApps”, providing unique tools across a spectrum of industries ranging from financial services, music and gaming to identity management and supply chain logistics.
The Ethereum platform operates using a consensus mechanism that enables its members to independently verify new blocks of transactions. Traditionally, this was accomplished using proof of work algorithms where miners would receive rewards in form of Ethereum for verifying new blockchain transactions. With Ethereum 2.0’s launch comes an entirely new consensus model known as Proof of Stake that awards holders of ETH with additional coins for validating blockchain transactions based on how much ETH they staked – this reward is known as the block reward.
While this achievement is impressive, it also reduces miners’ incentive to produce new ETH. When combined with annual issuance that is burnt and supply reduction through staking, this has caused what is known as “Triple Halvening Effect,” and should cause prices of ETH to decrease significantly.
Ethereum blockchain not only facilitates consensus mechanisms but also enables developers to construct and execute smart contracts, or programs that store information on the blockchain such as its state, attestations lists, transactions and more. To run these contracts using Solidity programming language compiling into low-level machine instructions that are then interpreted by Ethereum Virtual Machine (EVM), commonly referred to as bytecode.
Ethereum was not designed as money; rather it was created as an alternative fiat currency, with the goal of creating a global decentralized computer network where all users could share data and connect together. This led to the establishment of an international marketplace for digital goods and services, where participants could interact and trade assets directly without needing an intermediary – similar to Einstein’s luminiferous ether hypothesis of 1920. Although ether theory did not lead to any major advances in gravity theory, it nonetheless represented a crucial milestone in its development. Ethereum also represents a fundamental milestone, opening up exciting new applications which are still emerging but which are expected to have profound ramifications on both our lives and world around us.
