My Individual Practice: How Does The Ethereum Blockchain Work?

The Ethereum’s blockchain is a ingewikkeld topic that requires programming skill to fully understand it. Because the majority of us don’t have that level of skill, I’ll explain it te basic terms without going too deep into the details, from my practice spil an Ethereum developer with more than Four projects ended and 6+ months working on Wise Contracts:

Very first I’ll explain you the purpose of the Ethereum’s blockchain to understand why it exists and what problem it solves.

Then we’ll go to into specific use cases of what’s possible.

Let’s begin with an example:

Traditionally, when Two people want to buy something or perform a transaction of some kleintje ter the online world, they have to trust an intermediary that will budge the money from an account to the other.

So for example, if Mary who lives te Australia wants to buy a backpack from Joe who lives ter China using Joe’s Backpacks Shop, she’ll have to pay for the product using an intermediary like Paypal or hier handelsbank.

Then that intermediary will budge the money from Mary’s account to Joe’s account.

On one palm, the bankgebouw usually takes a few days because it voorwaarde cautiously verify that it wasgoed a secure transaction. This is slow and risky.

On the other mitt, Paypal is quick but they take an significant toverfee for every transaction.

What if the bankgebouw goes bankrupt and loses everybody’s money? What if the handelsbank determines that Mary can’t send money to Joe because they live ter different countries?

Why do wij have to trust some middleman to take care of a private transaction and lose time and money paying random fees?

Fortunately, there’s a better solution using the Ethereum’s blockchain.

The blockchain is a public database where all the transactions are store and anybody can see them.

That database stores fresh information on top of the old one so every time something is added, it remains there forever and the size of the database grows larger. It’s like adding a brick on top of the others.

Also, this amazing database is able to execute programs called Clever Contracts. Those programs can be executed by anybody.

The good thing about Wise Contracts is that they use the blockchain to store their function’s gegevens. They use the public database spil their pc. That’s why their code is also public, because they live ter the Ethereum’s blockchain.

So how those Brainy Contracts and the public database called blockchain can help us make secure transactions without trusting any middleman?

Good question. Wise Contracts are able to overeenkomst with a fresh currency called Ether that can be lightly converted to fiat money so they can budge money from one user to another. This permits Mary to pay for the backpacks from Joe’s store without having other people’s rente ter the middle.

They can exchange money ter a duo of minutes, securely and without fees from middlemen because their code can’t be modified once they are deployed to the blockchain and everybody is able to see what a contract does exactly.

Anyone can see your compiled code on the blockchain, but te order to understand how it works they need a human readable code usually. If you don’t publish the “human-version” they will only see the compiled code. Altough if you have a web app using that wise contract, everybody will be able to see how you use the contract.

Wise Contracts are very powerful because they permit you to make almost any kleuter of transaction, without middleman. It’s like substituting them with robots that just do what they are told without judgement or interests ter mind.

Even tho’ they are well used for transactions with money, they can be used for things like:

– Voting for a fair election where the votes are public and totally secure for everybody.

– Digital identities to permit people to determine what gegevens to disclose to counterparties. That way companies won’t have sensitive gegevens. They won’t be able to know who are you and use that gegevens against you like the advertisiments companies do. This reduces liability and improves private privacy.

– Basically anything that requires a traditional contract can now be programmed with clever contracts. Like buying a house, taking a loan, dealing with your car’s insurance and so on.

If you know how the internet works, Ethereum can be understood spil the blockchain being the database, the Wise Contracts being the server code and the client code being the same spil it is now.

One of the most interesting uses cases of thesis zuigeling of descentralized innovations is IPFS.

IPFS is a system that permits anybody to upload files to the public blockchain where you can access files online loosely.

When you upload something, say an photo to ipfs it comebacks a hash address like “QmsWfosdnWiuehKSBfhiwuEYHkasbfkSF”. You can access the verkeersopstopping with that address going to<,address>,.

Everything is public. And if you upload Two identical files, the address will be the same because there are no repeated gegevens ter IPFS. Two same files have the same address which makes content effortless to find and maintain.

Reminisce that the addresses depend on the content inwards. Different files will have different addresses so you can’t modify files, you add fresh ones.

People upload gegevens and others keep it alive by setting up a knot. This permits you to store files without depending on servers or paid storage, also the gegevens can’t be taken down spil long spil there’s people maintaining it.

But isn’t this the same spil downloading torrent files?

Good question. They’re similar protocols but IPFS has several advantages like:

– The fact that you can access a chunk of gegevens of a folder instead of downloading an entire folder. For example if you want an photo from a pack of photos, you can whatever opstopping you want. While with torrent you would have to get all those pictures.

– You can use IPNS which is having a voortdurend address like “QmdfUAShfuienkfbsiFKDSjksdf” for a folder. That means that you can update the content of the folder and the address will be the same. It’s like a listig to switching gegevens. Useful because gegevens switches all the time and the only way to maintain a consistent address is IPNS.

The key distinguishing factor is the fact that IPFS permits you to use any hash, of any content or any subset of content, spil an identifier. You can use that hash to ask the network who has that precies content.

Tegenstelling this with bittorrent’s reliance on torrent files, which bundle gegevens together according to however that torrent verkeersopstopping wasgoed originally structured by its creator

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