Ethereum and SmartContracts

Ethereum and SmartContracts

Bitcoin is a very old blockchain. Its technology does not allow it to scale, and its only use is to transfer BTC coins.

The first blockchain to incorporate scalability into its technology in 2014 was Ethereum. Russian-Canadian programmer Vitaly Buterin and his team created the Solidity programming language (very similar to C++) with a certain library of functions that allows you to create smart contracts without much additional knowledge or effort, and to set their properties of cryptocurrencies without creating new blockchains.

Roughly speaking, with a special program and Solidity language, I can write a cryptocurrency smart contract and give it these properties: the number of coins, their name, ticker and special functions for transferring or buying/selling. Then I press one button, the request for creation goes to the network, miners process it, I pay them a commission in Ether for that (just like for any other action in the network), and that’s it, I have my own cryptocurrency.

But that’s why these contracts are called “Smart” (from the English word “smart”), because with their help it is possible to create decentralized exchanges, crediting protocols, receive interest on cryptocurrency deposit, like in a bank, and it is all decentralized, that is, it works automatically at the expense of miners’ work!

This means that miners, by ensuring the operation of the Etherium blockchain, automatically ensure the life of all its coins!

After Ether, new blockchains started to appear, and they all have the same function — to be a platform for creating and launching cryptocurrencies.