Most people think of Ethereum as a cryptocurrency, like Bitcoin, but Ethereum is so much more than that. Ethereum is a platform for running applications on the Ethereum Network. Think of Ethereum more like the Internet or Apple’s App Store. The currency component on which Ethereum was developed is just the first and (currently) most notable application running on the Network.
This page explains in very broad strokes how the Ethereum Platform represents a revolution in computing and, by extension, many other industries. As you learn about the new capabilities that the Ethereum Network brings to computing, think about how Ethereum might be able to enhance transparency and accountability while reducing trust in your industry. The next billion dollar application is right around the corner and markets are wide open for new business solutions.
So, Ethereum is the New Internet?
The short answer to that question is yes, but there are some serious structural differences between the two. Most computers on the Internet are separate and independent. They connect with each other from time to time. Your computer is currently connected with my computer. My computer is serving you this content. You cannot trust that this content will be the same the next time you visit. I might change it. You’d probably never know. Do you trust me?
On the Ethereum Network, all the computers on the Network are connected to each other all the time. Any data posted to the blockchain on the Ethereum Network is permanent. That means that it will always be there. It is immutable. That means that it cannot be changed. It is public. That means that anybody can look at it.
Does That Mean That the Ethereum Network Is Better Than the Internet?
It depends on who you ask. First, let’s ignore the fact that the Internet is a very mature network and the Ethereum Network is nascent. Let’s just consider them at structural levels. Certain applications are better suited for one or the other. It is my opinion that MOST consumer directed apps are better suited for the Internet. These are applications like Facebook, Amazon, Google, and Netflix. I do not believe that a blockchain-based rival will overtake these guys, or even has prayer of doing so, based solely on the structural limitations of the Ethereum Network.
Allow me to explain. Ethereum achieves a lot of its miracles by mimicking designs of our world. For example, every action has a cost. The truth of this statement prevents me from jumping from an airplane without a parachute. When you are running code on the Ethereum Network, every action has a cost too. This prevents abuse and allows this miraculous Network to function. But who’s going to have a social profile on the Ethereum Network if every update to one’s profile costs real money? Certain applications will never exceed the popularity of the Internet counterparts while running on the Ethereum Network, but…
Certain Applications Will Work MUCH Better on the Ethereum Network
Imagine that you desperately wanted to do some online gambling. You go to a few sites and find one that seems legit. You put $50 on black. The little wheel spins on your computer screen and lands on red. You lose all of your money. How do you feel? You might doubt the legitimacy of your gaming experience. You might feel like your loss was predetermined through programming shenanigans. You probably will not put another $50 into the slot.
Now, imagine this same experience occurring on the Ethereum Network. You are connected with other players in a virtual roulette room. You place $50 worth of Ethereum onto red. The program returns black. You still lose, but anyone in the world can view the results of that game publicly on the blockchain. So you review the results of that game from a different machine. Anyone could audit all of the code that executed at anytime. Several open source programmers from around the world already had by the time you played. Now how do you feel? Well, no one likes to lose, but it’s nice to take trust from the equation. You might play again and try to win back your $50.
So What Does the Ethereum Network Do Well?
The world’s next large social network probably won’t be on the Ethereum Network, but there are some killer apps coming. We’re talking about apps that reduce our dependency on trust and increase accountability, which most logical and risk-adverse people would welcome. In this section I’m going to cover some of the key features that are built right on top of the Network. These are core features that don’t even require ingenuity to execute, such as how sending an email is woven into the Internet Protocol. Once developers understand these core features well, it is only a matter of time before they begin to use them in clever ways to unlock new Network capabilities.
The Ethereum Network is positioned to cause a revolution in voting technologies that has not been rivaled since the discovery of the secret ballot. As an American, I currently submit my vote along a chain composed of conflicting rivals who may desire to actively sabotage my will at any point along the chain. Let’s be honest. The current system is terrible. It is riddled with fraud and it requires us to trust our political enemies in many cases.
A voting application could be built on the Ethereum Network whereby I run my social security number or unique voter identification number through a one-way hash. With this hash I could later check that my vote was properly recorded. Every one could. All the information would be public, and also protected. The code to compute the votes would be public and visible. Transparent. Easy to access and audit by anyone. There would be no mischievous blackboxes through which everyone’s vote passes, only to be transmogrified into pie chart on the evening news. Clearly this process would be much, much better if it took place on the Ethereum Network.
Currently, if you are preparing for the end, your best option is to right everything down and trust someone to execute your will. This usually works out. Once in a while it doesn’t. Anyone who’s watched Boardwalk Empire or Game of Thrones knows that writing your will on a piece of paper may backfire. The Ethereum Network, however, allows people to create trustless wills. Ethereum or other digital assests or representations of physical assets can be sent to the wallets you chose upon your passing, and on the Ethereum Network, your will is immutable.
Cases Where Ledgers Collide and Money Is at Stake
The blockchain represents a revolution in accounting on the scale of the double-entry bookkeeping system. The Ethereum Blockchain is a third ledger, a public, shared ledger. A ledger that is immutable, that cannot be edited. Your company and my company can both write to it. We can both see it. There are places where businesses lose money because of mismatches within the double-entry bookkeeping system. Company A has a ledger says 6 widgets. Company B has a ledger that says 7 widgets. The companies fight and the relationship sours. This could be avoided by using the third ledger, the Ethereum Blockchain.
Storing and Transferring Unique Digital Assets
If I’m trying to sell my tickets to Hamilton, my current options are to meet a strange person (possibly the Craigslist Killer) in a dark alley next to a Starbucks and make an very shady exchange. This involves a lot of trust on BOTH the parts of the seller and the buyer and LOTS of things can go wrong. Alternately, I can pay to use the trust that services like Ticketmaster and Seatgeek have earned from consumers. I can be certain that my exchange will go about as well as possible, but I have to pay for the privilege of using these centralized ticket exchange services.
Now, imagine that my ticket were a blockchain asset instead. I could transfer it instantly to any party that I want for whatever price we agree upon. The service fees will go from hundreds of dollars to a nominal gas fee. No trust is required to make such an exchange. No gross charges to borrow the trust of others. The Ethereum Network enables the seamless and trust free transfer of digital assets. As the Ethereum Network grows in strength and popularity, we can expect to see a rise in the number of digital assets being transferred in this manner.
These are just a few of the amazing, revolutionary protocols that are built right on top of the Ethereum Network. Did I mention the trustless gambling? Again, this is just surface level stuff. As the Network grows and develops, as programmers understand it better, as business movers become aware of its capabilities, the Ethereum Network will host a new generation of apps will become the solutions for yesterday’s problems. Ethereum is so much more than a cryptocurrency. It is a distributed computing application platform with revolutionary potential.