Ethereum 101
(My tweet-thread slightly expanded)
I’ve been exploring Ethereum (and buying, for full disclosure). This is a plain-english recap of the very basics, to test my learning! (and maybe a frustrating oversimplification for the experts).
It’s not meant to be comprehensive, detailed, or technical — it’s meant to help normal people get their head around Ethereum and why it matters. There is a lot more to explore and explain in 201, 301, etc.
The rest of the thread, with small annotations:
Bitcoin was the first blockchain. Every blockchain has a cryptocurrency*. Bitcoin’s cryptocurrency is named bitcoin. (Lowercase) or $BTC
*Turns out “every blockchain has a cryptocurrency” is not strictly true. Most do, some don’t.
Bitcoin showed us what blockchains could do, so people started creating new blockchains, separate from Bitcoin. Ethereum is one of those new blockchains. It has a cryptocurrency called Ether or $ETH.
Ethereum’s Value compared to Bitcoin
Unlike Bitcoin, Ethereum has a complete programming language inside it, so programmers can write code and make apps on Ethereum.
Ethereum is like a giant distributed computer. Rather than running an app on Amazon Web Services’s servers, developers can use Ethereum.
(Image via @draecomino)
Apps run on Ethereum are secure from hackers, because the blockchain ensures data stored in the app cannot be changed.
The combination of perfect security with executable code has created “Smart Contracts” and lead to many new kinds of apps.
*No security is perfect. Even if blockchains may be perfectly secure, but coded apps on top of them could have vulnerabilities, or someone could steal your password.
“Smart Contracts” are like having a robot lawyer live in a computer. This robot lawyer can observe, validate, and execute agreements between total strangers perfectly, cheaply, millions of times per day.
With Ethereum, for the first time, you can trade with someone you don’t know or trust — IF you both agree to the code (Smart Contract) that determines your agreement.
If this isn’t an “oh shit!” moment, think about how much time, energy, and money we spend on preventing fraud, protecting ourselves, achieving trust, or recouping losses.
Examples of trust as a primary value driver:
Lawyers
Car Titles
Property Titles
Insurance
Banks
Credit Cards
trust is also the foundation of the value of many Brands.
Want to buy art, insurance, domain names, stock, tickets, music rights, cars, digital files… without worrying about getting scammed?
It’ll happen on the Ethereum blockchain.
The code for Ethereum is written by a self-organizing group of volunteers, who openly share the ideas, the rules, and the code so the community can verify and validate.
The radical vision is that much of the trust we currently place in Governments and Banks would be better-placed in visible code created by this open community.
Anyone can be a part of the Ethereum movement. Start your Ethereum investment by buying Eth, contributing to Ethereum, or building and using decentralized apps.
Ways to dive deeper:
Start reading from the @BanklessHQ intro: https://newsletter.banklesshq.com/p/-guide-1-starting-with-bankless…
Buy Ethereum on Coinbase: https://coinbase.com/join/jorgen_1q
Read/Contribute to Developer conversations on GH: https://github.com/ethereum/EIPs/tree/master/EIPS…
Read the Whitepaper, Developer Docs, or Mastering Ethereum
https://ethereum.org/en/whitepaper/ (dated now, but the original document
https://ethereum.org/en/developers/docs/
https://github.com/ethereumbook/ethereumbook
My synthesis of Naval’s most helpful crypto explanations
Explore the best-rated blockchain courses
Comment your questions and I’ll work the answers into Ethereum 201 :)