Ethereum is an Open Source Blockchain platform which allows anyone to develop and deploy Blockchain based Applications. The advantage of Ethereum Blockchain application is that the application can be executed via a shared and distributed network without any third party interference, Censorship, and Fraud. Presently every application and websites are running on centralized servers which control the entire inbound and outbound traffic. But in Ethereum the entire system is decentralized and distributed among many individual computers worldwide called ‘Nodes’.
In fact, in Blockchain platforms like Ethereum, the data and programs are copied and processed on all the computers on the network (sometimes it has an exception). So it eliminates a central authority or middlemen and put in place the self-governing programs such as Smart contracts to govern the network.
Ethereum is a decentralized platform that runs smart contracts. A smart contract is a digital version of the normal contract and they are used to secure Digital assets. They are actually simple computer programs. Like the contracts in real life, smart contracts can enforce a constraint, expire after a particular time etc. in a smarter way. Often they are self-executing/self-implementing and their application areas are widening day by day from financial management to Healthcare, Real estate, Automobile Industry, Governance etc.
Every collectively run network need some fuel to exist. Ether is the fuel of Ethereum. As we discussed, the network exists inconsistent state because of the computational and other resources spent by individual nodes. So one must get some rewards for their work. In Ethereum, Ether- A cryptocurrency like the Bitcoin is the reward.
Different Ethereum Networks
If we analyze more about Ethereum we can understand that it is more like a protocol for internode communication rather than a network itself. Actually, there are many networks exist alongside in Ethereum.
The community Ethereum Network through which the Ether Cryptocurrency is transacted, Community test network and many other private Blockchain networks like
- Private node in development mode
- Private network
- Public test network
- Full Ethereum network
There are different open-source software packages which connect with Ethereum networks for mining or development purposes.
They are eth (C++ implementation), geth (GoLang implementation) and pyethapp (python implementation).