Day139 — Ethereum

What is Ethereum?

Ethereum is the infrastructure/platform for running Dapps (Decentralized application), which is built on a decentralized network that combines a smart contract and a frontend user interface. Ether incentivizes people to run the Ethereum protocol on their computer. The author of dapp needs to pay the platform in Ether to deploy code and does not have control over the dapp after the deployment.

Smart Contracts

• self-executing
• letter strict
• immutable
• difficult to secure
• code is law (in ethereum classic)

Blockchain Technology

Cryptography + Proof of Work + Decentralized networks

Proof of staking (in Ethereum 2.0)

• deposit funds (Stake)on a network computer (Node)
• Nodes compete for the opportunity to forge a block
• randomization of winners through several factors, such as how much money is being staked, how long the coins have been staked for so no single entity will gain a monopoly over forging
• winner gets coins as a reward

Proof of Work (mining)

• contest for guessing a random number
• winner gets to update the ledger of balances
• more computing power = higher chance of winning
• a consensus mechanism
• reliable and secure
• resource intensive

Defi components

• Decentralized infrastructure — Ethereum
• Decentralized (stable) money — DAI
• Decentralized financial services — DEX (Decentralized Exchange), money markets, insurance, etc.

Pros

• Transparency
• Interoperability
• Decentrailization
• Free for all
• Flexibility

Cons

• Still in an infancy stage
• Some services are partially centralized