Everyone is talking about Ethereum. It is not only the most popular cryptocurrency after Bitcoin, but also the cryptocurrency with the second largest market capitalization. But Ethereum is more than just a cryptocurrency – the technology behind Ethereum lays the foundation for Smart Contracts and d’Apps.
How is Ethereum different from Bitcoin? To understand Ethereum, it first requires an understanding of the centralization of the Internet. Personal and financial data, as well as passwords are mostly stored in the cloud, which is a flowery description for server farms of big companies like Facebook, Google or Amazon. This centralized structure of the Internet is by no means just bad. The centralized hosting services make it possible for many people and small businesses to stably host websites in good quality.
But the downside of centralization is vulnerability. There are countless examples of unauthorized access to data. At the same time, users often must give hosting service providers more of their own data than they would like. Finally, it is also questionable whether the classic client-server model represents a meaningful architecture in times of the Internet of Things.
The head behind the Apache web server, Brian Behlendorf, has therefore found drastic words: According to him, the centralization of the Internet on huge server farms is the original sin of the Internet. The Internet, according to Behlendorf, was decentralized from the beginning. Using various tools, such as blockchain, this goal of decentralization is now to be achieved again.
At this point, Ethereum comes into play. While Bitcoin is shaking up the financial system, Ethereum uses blockchain technology to eliminate the middlemen on the Internet. With Ethereum, both the hosting of data and the monitoring of contract fulfillment should no longer be centralized by a few Internet giants.
Ethereum – Smart Contracts for the decentralized computer
Ethereum wants to become a kind of decentralized computer, decentralizing the currently existing client-server model. Many blockchains, such as the Bitcoin Blockchain or the Ethereum Blockchain, are replacing servers and clouds with thousands of so-called nodes set up by volunteers. These nodes play an important role in maintaining the payment network: they check and store every block in the blockchain and check the individual transactions handled by Ethereum’s own digital currency, Ether. In the world of Ethereum, people talk less about a digital currency than about gas or fuel needed to maintain the network.