Before you can understand ethereum, it helps to first understand the internet.
Today, our personal data, passwords and financial information are all largely stored on other people’s computers – in clouds and servers owned by companies like Amazon, Facebook or Google. Even this CoinDesk article is stored on a server controlled by a company that charges to hold this data should it be called upon.
This setup has a number of conveniences, as these companies deploy teams of specialists to help store and secure this data, and remove the costs that come with hosting and uptime.
But with this convenience, there is also vulnerability. As we’ve learned, a hacker or a government can gain unwelcome access to your files without your knowledge, by influencing or attacking a third-party service – meaning they can steal, leak or change important information.
Brian Behlendorf, creator of the Apache Web Server, has gone so far as to label this centralized design the “original sin” of the Internet. Some like Behlendorf argue the Internet was always meant to be decentralized, and a splintered movement has sprung up around using new tools, including blockchain technology, to help achieve this goal.
Ethereum is one of the newest technologies to join this movement.
While bitcoin aims to disrupt PayPal and online banking, ethereum has the goal of using a blockchain to replace internet third parties — those that store data, transfer mortgages and keep track of complex financial instruments.
The ‘World Computer’
In short, ethereum wants to be a ‘World Computer’ that would decentralize – and some would argue, democratize – the existing client-server model.
With ethereum, servers and clouds are replaced by thousands of so-called “nodes” run by volunteers from across the globe (thus forming a “world computer”).
The vision is that ethereum would enable this same functionality to people anywhere around the world, enabling them to compete to offer services on top of this infrastructure.
Scrolling through a typical app store, for example, you’ll see a variety of colorful squares representing everything from banking to fitness to messaging apps. These apps rely on the company (or another third-party service) to store your credit card information, purchasing history and other personal data – somewhere, generally in servers controlled by third-parties.
Your choice of apps is of course also governed by third parties, as Apple and Google maintain and curate (or in some cases, censor) the specific apps you’re able to download.
Take the example of an online document service like Evernote or Google Docs.
Ethereum, if all goes according to plan, would return control of the data in these types of services to its owner and the creative rights to its author.
The idea is that one entity will no longer have control over your notes and that no one could suddenly ban the app itself, temporarily taking all of your notebooks offline. Only the user can make changes, not any other entity.
In theory, it combines the control that people had over their information in the past with the easy-to-access information that we’re used to in the digital age. Each time you save edits, or add or delete notes, every node on the network makes the change.
It’s worth noting that the idea has been met with skepticism.
Although the apps appear to be possible, it’s unclear which blockchain applications will actually prove useful, secure, or scalable, and if they will ever be as convenient to use as the apps we use today.
Authored by Alyssa Hertig; Images by Maria Kuznetsov
NEXT: WHAT IS ETHER?
INDEX: A BEGINNERS GUIDE TO BITCOIN AND BLOCKCHAIN TECHNOLOGY
What is Bitcoin? It's a decentralized digital currency
Why Use Bitcoin? It's fast, cheap to use, and secure
How Can I Buy Bitcoin? From an exchange or an individual
How to Buy Bitcoin in the UK Buying bitcoin in the UK
How to Store Your Bitcoin Use a digital or paper wallet
What Can You Buy with Bitcoin? Spend your bitcoins
How to Sell Bitcoin A guide on how to sell your bitcoins
How to Accept Bitcoin Payments for Your Store Learn about bitcoin POS systems
How do Bitcoin Transactions Work? Bitcoin addresses and private keys
Is Bitcoin Legal? The current regulation around bitcoin
Who is Satoshi Nakamoto? The founder of bitcoin
Understanding Bitcoin Price Charts A primer on bitcoin price charts
How Bitcoin Mining Works By confirming transactions
How to Set Up a Bitcoin Miner Generate bitcoins yourself
What are Bitcoin Mining Pools? What are pools how and how to join them?
How Does Cloud Mining Bitcoin Work? Alternative bitcoin mining solutions
How to Calculate Mining Profitability Can you make a ROI?
How to Make a Paper Bitcoin Wallet Creating an unhackable bitcoin wallet
Can Bitcoin Scale? A look at the debate and the tech
What is SegWit? A new way of storing transaction data
What is the Lightning Network? Off-chain transaction channels
What is Ethereum? A blockchain application platform and 'world computer'
What is Ether? The 'fuel' of the ethereum network
How to Use Ethereum Wallets, trading and ‘dapps’
Who Created Ethereum? Vitalik Buterin
How Ethereum Works 'Turing-complete' programming, 'state' and the 'EVM'
How Ethereum Mining Works 'Proof of Work' and 'Proof of Stake'
How to Mine Ethereum GPUs, mining software and pools
How Will Ethereum Scale? ‘Sharding’ and ‘off-chain’ transactions
How Do Ethereum Smart Contracts Work? Code, transaction fees and 'gas'
What is Bitcoin Cash? Same blockchain, different characteristics.
Hard Fork vs Soft Fork Why and how do blockchains split?
What is the Difference Between Litecoin and Bitcoin? It's the silver to bitcoin's gold
How to Buy Litecoin How to buy the bitcoin alternative litecoin
How to Mine Litecoin and other Altcoins How to generate your own altcoins
What is Ripple? Is it a token? Is it a payments platform?
What is Blockchain Technology? A system of distributed data and logic
How Does Blockchain Technology Work? Cryptographic keys, distributed networks and network servicing protocols
What Can a Blockchain Do? Identity, recordkeeping, smart contracts and more
What is a Distributed Ledger? A dynamic, independently maintained database
What is the Difference Between Public and Permissioned Blockchains? Can anyone read or write to the ledger?
What is the Difference Between a Blockchain and a Database? It begins with architectural and administrative decisions
What Are the Applications and Use Cases of Blockchains? Tokenization, auditing, governance, settlement and more
How Could Blockchain Technology Change Finance? Cross-border payments, new asset classes, regulatory compliance and more
What are Blockchain's Issues and Limitations? Complexity, size, costs, speed, security, politics and more
Why Use a Blockchain? To manage and secure digital relationships as part of a system of record
What is a Decentralized Application? A distributed 'smart contract' system
What is a DAO? A 'decentralized autonomous organization'
What is an ICO? Initial Coin Offerings refer to the distribution of digital tokens.
