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A Beginner’s Guide to Ethereum – Part 2

Editor’s Note: This is part two in a three-part series.

The Ethereum network and its capability to run smart contracts and fully decentralized autonomous organizations may seem like a solution to most work problems, but it is not.

The reason for it is very simple: organizations and contracts on the network run according to code created by people. The organizations and the contracts are only as good as the visionaries and developers who create them. The rules for both organizations and contracts can have bugs, errors, oversights, and absence of descriptions for particular situations and scenarios.

Once a contract or an organization becomes active on the network, no single third-party can change it. A human error can lead to things happening that were not supposed to happen. Attackers and hackers can also look for and exploit weak spots and mistakes and, as of now, there is no way to prevent these issues from happening other than get consensus from the majority of the users on the network and rewrite the code. Getting such a consensus would contradict the whole idea of the blockchain and decentralized network.

This is the same idea that the bitcoin network uses to protect individuals from a sole third party, such as a government or a large bank that could make all kinds of decisions about a currency, currency circulation rules, and currency emission.

Accessing the Ethereum network

The easiest way to access the Ethereum network is to use its native browser, called Mist. On the World Wide Web, you can use an Internet browser to visit websites and access their content. On the Ethereum network, you can use Mist browser to get an overall view of the Ethereum network and to interact with dapps on the network. Mist browser also contains My Ether Wallet, a piece of software to store Ethereum network tokens called Ethers. While you can download and use My Ether Wallet separately from Mist browser, the browser offers a bigger set of tools and features than just the wallet.

Using Mist browser, you can manage, deploy and use smart contracts and build decentralized applications even if you don’t have a technical background.

The future of the Ethereum network

The Ethereum network through its browser and wallet offers users a very intuitive interface and an opportunity to use existing and create new decentralized blockchain applications and smart contracts for all kinds of purposes. Both the applications and the contracts have a potential to disrupt hundreds of various industries, from healthcare to car inspections and auto repair records. Eventually, more and more organizations will be running their internal processes on the blockchain in one of three ways.

Private blockchains will be in use in major corporations and non-profits. They will give employees, vendors and service providers access to the blockchain using cryptographically protected authentications. Consortia blockchain will allow various parties to collaborate and share information in tamper-proof, secure way. Finally, public blockchains on the Ethereum networks will be open to all users. Most likely, corporations will have public blockchains for customers and investors. These blockchains will use some of the implementations from the private blockchain, but will not contain any sensitive proprietary information.

The Ethereum network also changes how people view and use the Internet. Up until recently, most people viewed the Internet as a source of information, be it for business or entertainment, and means of communication. The Bitcoin, the Ethereum network, and other tokens and networks add a value option to the Internet, making it possible to exchange value on the network, create and implement contracts on the go, without a need for third parties or governments.

Ether

Ether is a critical component of the Ethereum network. Ether is similar to bitcoin in that it is a decentralized digital currency that users that spend and trade on the network and at the exchanges. On the Ethereum network, Ether is a kind of gasoline that the network needs to operate and execute decentralized apps. Ether is an incentive for developers to create quality applications and for users to keep the network in secure operational shape. Miners on the Ethereum network can mine and trade ethers in the same way miners on the bitcoin network can mine and trade bitcoins.

Ethereum was the idea of Vitalik Buterin, a software developer and researcher from Canada. Buterin together with a team of developers ran a crowdfunding campaign in July and August of 2014 that determined the limits of Ether token.

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