Monday, May 30, 2016

Ethereum (Smart contracts)

Ethereum is a public blockchain platform with programmable transaction functionality. It provides a decentralized virtual machine that can execute peer-to-peer contracts using a cryptocurrency called Ether (unofficial code ETH).
Ethereum was initially proposed by Vitalik Buterin in late 2013 and in 2014 he described it as "A Next-Generation Cryptocurrency and Decentralized Application Platform".Development was funded by a crowd sale in August 2014.
Organizations suffer from hard-to-maintain and often incompatible databases and the high transaction costs of getting them to talk to each other. Ethereum proposes to solve this problem through adding a programming language that allows users to write more sophisticated smart contracts, which essentially are a set of rules running on the blockchain.

Smart contracts

Smart contracts are applications with a state stored in the blockchain. They can facilitate, verify, or enforce the negotiation or performance of a contract, or that make a contractual clause unnecessary. Ethereum contracts can be implemented in various Turing complete scripting languages, compiled into bytecode for the Ethereum Virtual Machine (EVM) before being deployed to the blockchain. The platform charges a certain amount of ether per computation. The Ethereum system has been described as "a single shared computer that is run by the network of users and on which resources are parceled out and paid for by Ether."
As the instructions are hosted and executable on the blockchain, none of the involved parties can control or moderate the smart contract during the contract or after its terms have come to pass. Smart contracts operating on a public blockchain could allow organizations to cooperate without the need to trust each other. For example, a company could create invoices that automatically execute payment when a shipment arrives or share certificates which automatically send their owners dividends if profits reach a certain level.




No comments:

Post a Comment