Ethereum is a worldwide plan that envisions in creation of an open source computer that can allow anybody to create applications in a decentralized way, while at the same time all states and information are distributed simultaneously while enabling public accessibility. Ethereum enables programmable contracts that allow multiple parties to set transaction conditions.
WHATS IS A SMART CONTRACT?
A smart contract refers to a contract that allows duo counterparties to set conditional requirements of exchange without the need to involve the trust of a third party for plan execution.
Ethereum supports smart contracts in which the programmers can write codes so as to program digital value. Examples of open source applications include token, non-fungible tokens, open source finance applications, open source and unlimited exchange and lending protocol.
EXAMPLE OF A SMART CONTRACT;
Edward wants to set up a trust fund to pay 20$ at the start of every new month for a period of 12 consecutive months she can program a smart contract to;
- Keep check of the actual current date
- At the beginning of each new month auto send total amount 20$
- Keep repeating the process until the smart contract is exhausted
By using a smart contract Edward has been enabled to bypass need to involve third parties like lawyers or escrow agents to ensure running of the trust fund making the process easy and transparent to all.
Smart contracts are programmed to work on the ‘if this then that’ aspect. Whenever a specific condition is fulfilled the smart contract then is able to automatically carry out the preceding functions automatically as per programmed.
WHAT ARE THE PROGRAMMING LANGUAGES THAST ARE USED TO WRITE SMART CONTRACTS ON ETHEREUM?
WHO CREATED ETHEREUM?
Unlike other platforms like bitcoin whose creators are not known the creators of Ethereum are well known personalities namely;
- Vitalik Buterin
- Mihai Alisie
- Anthony Di Lorio
- Charles Hoskinson
- Amir Chetrit
- Joseph Lubin
- Gavin Wood
- Jeffrey Wilke
The cryptocurrency developed over the open source Ethereum that serves in running smart contracts is what is referred to as Ether. The cryptocurrency propels and allows the running of smart contracts unlike other platforms like bitcoin that allow a unit of currency on a peer-to-peer payment network. The supply of Ether is not restricted like that of others like bitcoin hence described as the minimum necessary for securing a network that is often determined by members of the Ethereum community. Many of the open source applications are situated on this platform and the cryptocurrency for the top most percentage of the total funds staked in the DeFi projects.
Ether purposefully has been put up to ensure the transition to proof of stake mechanism replacing the current proof of work mechanism.
Fortunately on this platform all transactions are through smart contract executions that are relatively cheaper compared to other platforms. This fee is then referred to as Gas. Generally this term can be used to refer to the unit of measure on the amount of computational effort that is required to execute an operation or a smart contract. The more detailed an operation is or becomes the Gas required to fulfil such a purpose.
Gas prices are prone to seasonal fluctuation depending on the network demand. If the number of customers interacting on the Ethereum block chain like ETH transaction or smart contract operation execution gas price can go high due to the limitation in the number if computing resources afforded by the network. Conversely when there is underutilization of the network the prizes drop.
ETHER STORAGE OPTIONS AND ERC-20 OPTIONS
Metamask, MyEtherWallet and MyCrypto are the three majorly used Ethereum basedb wallets. However the above mentioned are not the only ones, others such as Argent, Trust Wallet, and Coinbase Wallet also add to the list.
While no investment is risk-free, investing in Ethereum has over time been able to generate over 40% returns over the last two years.