If you have even just a toe dipped in the swirling tech ocean of today, you’ve probably heard of blockchain, or at the very least you know Bitcoin exists.

Much like our planets ocean, tech is a deep, vast and complex entity. Blockchain is just one small and relatively new part of it, gearing up to be the next disruptor of current norms. If this is uncharted territory for you, let’s go and explore some terms and ideas powering this new wave of innovation.

Ethereum is a blockchain-powered technology, not to be confused as another Bitcoin. It does have a currency, Ether, but it builds on top of this to provide a new world of services like decentralized finances, games and more.

Taking a step back, let’s get a picture of what blockchain technology is and the problems it intends to solve.

“Blockchains can be seen as distributed databases a group of individuals control” — Blockchain for Dummies 2nd Edition, 2019.

This database is often referred to as a ledger, and it comes with some inherent security qualities like non-repudiation and authenticity.

“Group of individuals” is central to the concept of blockchains. The aim is to do away with the central authorities providing trust, and enable the trusted exchange of information and currency in a peer-to-peer fashion. Peers, known as nodes in the blockchain network, work together to achieve a consensus on the current state of the blockchain.

You will hear the term decentralization often, and subsequently one of the core proponents of Ethereum, dApps (decentralized applications). Decentralizations premise is peer-to-peer connections. Nodes interact directly with each other, with no higher-order or central control amongst them.

This is opposed to the current model for interactions, dependant on a central entity to mitigate exchanges such as banks who enable the trusted transfer of money, or SSL certificates backed by Certificate Authorities that allow web browsers to authenticate the content being consumed.

“Blockchain is a system of records to transact value…there is no need for a trusted intermediary to serve as a 3rd party” — A Beginner’s Guide to Building Blockchain Solutions, 2018

So to summarise, the blockchain at its most simple level could be described by the following points:

• Peer-to-peer transactions with no trusted third party

• Shared, decentralized, open ledger

• The ledger is append-only. Every entry is permanent

• No need for third parties to verify, secure or settle transactions.

So far there have been a few different terms used for the records kept on the blockchain, but the most accurate is a transaction. 

“A transaction contains a peer-to-peer message that specifies the operations executed, data parameters used for the execution of operations, the sender and receiver, fee and timestamp” — Blockchain In Action, 2020

Transactions then get grouped together into blocks. The nodes in the network will work to verify these blocks using a pre-determined consensus method, such as proof of work or proof of stake. The former is the current Etheruem method, and the latter is the intended method for the future of Etheruem.

The result of a block verification is a hash which is then included in the next block, chaining them together. This powerful process prevents the tampering of any transactions stored in the blockchain. This blockchain is replicated across all the nodes, creating incredible fault tolerance and data integrity.

Bitcoin exists to transact digital currency. Where Ethereum comes in, is to transact digital assets by providing an environment (known as the Etheruem Virtual Machine, EVM) for code execution. 

“Blockchain use cases are not just limited to cryptocurrencies, and the possibilities are only limited by your imagination” — A Beginner’s Guide to Building Blockchain Solutions, 2018

Etheruem is a platform for blockchain applications. Rather than individual blockchains for each application, Etheruem facilitates many decentralized applications on one blockchain. 

These dApps run on the decentralized global Ethereum network and can run without downtime, fraud or regulation. dApps can be built to transact any asset with intrinsic value, such as land, houses, votes etc…

The defining piece of Ethereums blockchain is smart contracts. These are public pieces of executable code stored in the blockchain. A smart contract defines the functions that will take place upon the initiation of a transaction. These contracts are written in the programming language solidity. 

In the Etheruem network, nodes perform work to verify the transactions and are rewarded with Ether, the currency of Ethereum. This reward is calculated by the complexity of the transaction to be performed, and the value of the work to be done, defined by the initiator. 

The term used to define this process is gas. A transaction will take X units of gas to complete, and the unit value of the gas is defined by the initiator. So whenever you make a transaction in the Ethereum network, you will be faced with a gas fee in addition to whatever you are transferring. 

As you can imagine this is just scratching the surface of the Etheruem blockchain world. If you are working in the blockchain sector, or are interested in being part of the innovation, it’d be great to connect and talk more, just get in touch!

If this all seems pretty exciting and you want to get your hands dirty, here is a quick list of resources to get you started

Truffle Suite is an all-encompassing toolset for developing, testing and deploying dApps.

Truffle The Truffle Suite gets developers from ideas to dApp as comfortably as possible. SMART CONTRACTS MADE SWEETER A world…trufflesuite.com

Ganache —launch a personal Ethereum blockchain for developing dApps.

Ganache Quickly fire up a personal Ethereum blockchain which you can use to run tests, execute commands, and inspect state…trufflesuite.com

Drizzle — Front end libraries for writing dApp UIs

Drizzle The core of Drizzle is based on a Redux store. We take care of synchronizing your contract data, transaction data and…trufflesuite.com