If you watch the HBO comedy series Silicon Valley, then you’ll be well acquainted with the concept of a decentralized Internet. And while this novel concept is the product of fiction, as with some of the scenarios in the sinister series Black Mirror, it seems it may actually come true sooner, rather than later, under the umbrella of the Ethereum network.
For those who just learned how to buy bitcoin and thought they were starting to understand cryptocurrency, Ethereum is a bit a bit of a kick in the pants. Its ambition and utilities reach far beyond anonymous currency transfer. While there is a baseline currency associated with Ethereum (it’s called – surprise, surprise – ether), this currency is primarily meant to be used as “Gas” to power the various smart contracts and apps that are the true end of Ethereum.
Confused? Don’t Panic
The problem with understanding Ethereum – or any other cryptocurrency for that matter – is that the vocabulary often refers to concepts from coding, cryptography and computer science that will send a layperson running for the hills. It’s okay to accept that you may not be able to comprehend the blockchain to its depths, but the broader strokes should be accessible to anyone who’s willing to focus for thirty minutes (provided, of course, you’ve had a cup of coffee). While this post will provide some basic information on the emergence of Ethereum, you can also check out Bitbuy.ca and make use of their in-depth crypto guides or their quick-to-respond support services.
In the Simplest Terms
Ethereum’s founder, a young Russian Canadian by the name of Vitalik Buterin, wanted to take the idea of a blockchain – a decentralized ledger that facilitates currency transfers – and build a network to support apps and smart contracts for a nominal fee (gas price). The actual currency is called ether, and while it is a legitimate cryptocurrency in its own right, it mainly exists to facilitate the sharing of contracts, apps and games in a shared network protected by peer governance – thus cutting out lawyers, middlemen and centralized network fees. Catch all that? Or do you need another cup of coffee…
What The Heck is a Smart Contract?
A smart contract is a contract that is rendered into a computer code and then mediated by Etherium’s blockchain network. Thus, if your side of the contract is to send someone an electric guitar played by Jerry Garcia, and their side is to pay you 10k (a steal!), the blockchain will hold the 10k until the buyer receives the guitar and then release it to you. If the guitar never arrives, the blockchain will refund the 10k in the form of ether. Thus, no transfer fees (beyond the nominal gas price) or middleman is necessary, and, of course, the contracts can be much, much more complex than selling Jerry’s guitar.
Why am I Interested in Any of This?
Maybe you don’t particularly care about the bitcoins and litecoins of the world, maybe you’re not interested in using crypto as currency, or in investing in it (investing in bitcoin basically constitutes a currency investment with a high risk-reward ratio). However, Ethereum may well represent a much more revolutionary shift, towards expression and commerce on the Internet unshackled from corporate and governmental controls. If that kind of a shift piques your interest, then act now and buy while the iron’s hot!