2. The background of the Ethereum
Vitalik started to travel around the world exploring existing crypto projects in other countries. He discovered that all cryptocurrency systems are limited to an application that runs them.
At that time, Vitalik came up with the idea of creating a new decentralized system that could be used by any developer, allowing them to create new applications and services based on
Vitalik offered to implement this idea to entrepreneurs with whom he communicated during his travels, but everyone told that the world was not ready for such a product.
Then he decided to realize the plan on his own. Buterin described his ideas in detail and published White Paper - a reference document explaining the policy and technical specifications of the
project - in late 2013. At that time, he was 19 years old.
Vitalik presented his project to the world, having doubts about it. He expected that experts would find errors, and many comments would appear. However, the project was welcomed by his
acquaintances, acquaintances of his acquaintances who shared the documents with others, and some of them were ready to participate in the work on the Ethereum creation.
There was no considerable criticism, he drew a lot of attention to himself and received Thiel Fellowship for $100,000. This award is given to young entrepreneurs to implement innovative
In 2014, Vitalik presented his idea at the BTC conference in Miami. At the end of the speech, all listeners gave a standing ovation. It was a great success.
Development of Ethereum began through the Swiss company Ethereum Switzerland GmbH (EthSuisse) in 2014, and later the non-profit Ethereum Foundation (Stiftung Ethereum) was founded.
According to White Paper, Ethereum is described as "the decentralized mining network and software development platform".
3. Once again, about the Blockchain
Blockchain is a system that does not belong to anyone but can be accessed by anyone after a certain registration procedure.
Let's compare this network to a set of files similar to those in the folders stored on our computers. New files and folders appear all the time in the network.
Crypto coins consist of such files. Cryptocurrency is not a simple file that we are used to, and which can be created by anybody. These files consist of digital codes that contain information
encrypted by a special system. If we decrypt such code, we will know who, to whom and in what quantity passed a particular coin, how it was emitted, and to whom it was passed as a result of
this or that transaction.
The blockchain always generates new codes, which are collected in blocks when a certain size is reached. Codes are generated when a coin transaction occurs. These operations are confirmed by
To validate the transaction, users kind of "read" the information in the common registry that provides information that user A received a coin from the user B; that it truly belongs to
him, and that he can send it now to the user E. All this information is confirmed by the generation of a new code.
Blocks are linked and uninterrupted. In other words, the information that User A bought the coin from User B is in the block 18, and the information that User A wants to sell the coin to
another user now is in the block 19. It is no longer possible to change this information because block 18 is already closed, and other files are already there. Therefore, the entire chain of
blocks is continuous, and operations are irreversible. Thus, they cannot be changed.
Codes consist of dozens of characters, and it would take a lot of time for an ordinary person to pick them up. That's why code selection tasks are performed with the help of computing power of
PCs and special devices. All this information is encrypted and decrypted by the system itself, it generates and writes the codes, and the user only sees the data and starts the process of
transaction and confirmation, but in fact, he can not create, record and check all the numbers in the codes by himself. Any transaction with a coin is considered correct if it has
passed the verification and validation process confirmed by the appropriate code. If the code is not matched, the coin transaction will not be executed, will not get into the block file, and
the money will remain with the owner.
When a coin is involved in a transaction, a notification is sent to all network members, which are millions. Those who want to participate in the confirmation of the transaction response to
the notification and start working, or rather their equipment does. The more powerful the equipment, the faster the process is, and therefore the more transactions will be processed.
Those users who perform the process are called miners. It is their professional task to carry out this process called mining. They purchase the right machines, invest in them, monitor
upgrades, and so on. All because they are receiving a reward for this work in the form of the cryptocurrency, which is mined.
In this way, the system is maintained running and new coins appear - the emission takes place, and users earn money.