What can you use Ethereum for?
Ethereum allows developers to create and launch decentralized applications (Dapp). Any such application called Dapp can solve a specific user task. Bitcoin is a Dapp providing users with a payment system. Furthermore, since decentralized applications contain code executed in the blockchain network, no central control is available.
What practical Ethereum apps are in development nowadays?
The existing services decentralization – Different services and areas use the Ethereum platform
Incredible possibilities in future – The Dapps potential is very high. They can revolutionize hundreds of different economic sectors, particularly: finance, real estate, insurance
Any centralized services can be decentralized using Ethereum. Take intermediary services existing in hundreds of different industries as an example. We are talking here of various loans, title registers, voting systems, requirements compliance verification, and much more.
Ethereum can also facilitate the creation of decentralized autonomous organizations (DAO). DAO is a fully autonomous decentralized organization with no single leader, managed by software code, using a set of smart contracts recorded in the Ethereum blockchain.
In this case, the code replaces the traditional organization’s structure and rules, rendering human and centralized controls unnecessary. DAO belongs to anyone who buys tokens, but tokens are a fee for voting rights here, rather than shares or a parcel of shares.
What are Ethereum’s advantages?
As decentralized applications operate using a blockchain, they enjoy all its advantages:
- Irreversibility. No outsider can make any changes to data.
- Protection from corruption and unauthorized access. Applications are executed in a network created according to a consensus, making censorship impossible.
- Security. There is no central point of failure, as cryptography perfectly protects the network from hacker attacks and fraudsters.
- Zero downtime. Applications never stop.
What are the decentralized applications’ downsides?
In spite of a number of advantages, decentralized applications are not flawless. As people are writers of the code for smart contracts, it is not perfect, and errors in it can lead to unforeseen consequences. If someone exploits such errors, there is no other way to stop the attack than to come to the entire network consensus and re-write the contract code. But this method comes into a collision with the essence of the blockchain designed to make the previous states irreversible.
Moreover, any action carried out as a centralized interference raises serious issues about the decentralized nature of the application.
Is Ethereum similar to Bitcoin? It looks like it, but it isn’t the same.
Ether is kind of fuel for the Ethereum distributed platform. Ethers are used to pay for computer powers necessary to carry out transactions.
Ether fuels Ethereum network
What applications for the Ethereum platform are in development nowadays?
The Ethereum platform is used to create a wide variety of applications, but since this is a completely new business, it is still difficult to envision which applications may get successful and which one will fail.
- Weifund is an open platform for crowdfunding, using clever contracts. This kind of approach allows considering the contribution to a campaign as a digital asset ensured by a contract, meaning it can be utilized, bought, or sold in the Ethereum ecosystem.
- Uport is a safe and convenient way to fully control personal data. Instead of relying on state agencies and providing data to third parties, the user independently controls who can receive and use it.
- BlockApps is an attempt to simplify blockchain software development including amateur hacks or even complex “combat” systems. BlockApps provides all the tools necessary to develop both private and public applications.
- Provenance uses Ethereum to improve supply chains’ transparency. It allows tracking the commodities origin and history and providing this data to consumers who can make more reasonable decisions based on it.
- Augur is an open source platform designed to make forecasts – anyone can make a forecast and get a reward if it comes true. People purchase shares forecasting a specific outcome of a certain event, and in case their forecast turns out to be correct, they receive a reward.
Changing the Ethereum code
Following the hacker attack and the long debate after it, the Ethereum community voted and came to a consensus to return the stolen funds by changing the blockchain code (having implemented the so-called hard fork). After this procedure, the funds appeared on a new smart contract allowing the owners to withdraw their tokens. Nevertheless, the consequences of this decision are not yet fully clear, and the debates carry on.
The matter is that Ethereum is based on blockchain technology postulating the irreversibility and invariability of any transactions. Therefore, having rewritten the blockchain rules, Ethereum created a dangerous instance which contradicts the very essence of the technology.
Changing the code every time it comes to sufficiently large amounts or a large number of affected participants, a blockchain will eventually lose its core value as a safe and anonymous storage providing irreversible data nature and protection from unauthorized access.
This case has put the Ethereum community and its founders in jeopardy: failing to return the investors’ money could badly affect the network reputation.
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