Ethereum: The World Computer
The Ethereum is a decentralized, open source and distributed computing platform that enables the creation of smart contracts and decentralized applications, also known as DAP.
Smart contracts are computer protocols that facilitate, verify or enforce the negotiation and performance of any type of agreement.
For example, a smart contract can be used to represent a legal contract that emulates the logic of contractual clauses or a financial contract that specifies the responsibilities of counterparts and the automatic flow of value.
A smart contract is exactly what you think it will be: It is an auto-execution, programmed agreement entered into on the Ethereum blockchain. It operates on the basis of an if, then argument, so that if x is the verb, y is the verb. Here is a useful definition of the Ethereum Foundation:
"Smart contracts are applications that run as a program without any possibility of downtime, censorship, fraud, or third-party intervention."
Let's see what this means:
Downtime: Applications never stop unexpectedly and can never be closed
Censorship:
Therium nodes are distributed worldwide, eliminating censorship from a central authority
Fraud: Contracts cannot be changed, hacked or manipulated.
Third Party: The contract executes itself and therefore does not require an intermediary.
Four core technological building blocks form the foundation of Ethereum's smart contract
platform:
Cryptographic tokens and addresses
A mathematically secure unique voucher system that allows creating assets on existing blockchains. These serve as a standard for computing values, or numerics. They can serve as payment for goods, services, and can also be used to represent a mathematically secure and pseudonymous identity.
👉Peer-to-peer networking
Individual users connect their computers together to form a network that can exchange data without a central server. Bitcoin and Ethorum run on P2P networks, as is almost every other cryptocurrency in use today.
👉Consensus algorithm
These algorithms allow blockchain users to reach consensus about the current state of the blockchain. The bitcoin blockchain reaches a consensus on global state change (which usually involves adding a new block to the blockchain) approximately once every 10 minutes, while the atorum blockchain reaches consensus in about 15 seconds.
👉Turing Complete Virtual Machine
A virtual machine is a computer that exists in software form and can be run on a layer of abstraction over its underlying hardware. A "Turing complete" system can run any program and any similar computation is powerful enough to implement any program defined in the complete system. For comparison, bitcoin is not Turing-complete because its virtual machine can only run a very simple class of programs.
These four pillars of DAP technology are designed to enable smart contracts. Smart contracts typically have a user interface that can be implemented as a web page, application, or mobile app. In the future, traditional contracts may become out of date for the purposes of certain transactions. Rather than drafting a costly, lengthy attorneys, banks, notaries, and Microsoft Word employment contracts, contracts can be built along certain lines of code.
Smart contracts can possibly be constructed automatically by wiring a handful of human readable segments simultaneously
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