Mastering Ethereum

Chapter 1. What Is Ethereum?

Ethereum is often described as “the world computer.” But what does that mean? Let’s start with a computer science–focused description, and then try to decipher that with a more practical analysis of Ethereum’s capabilities and characteristics, while comparing it to Bitcoin and other decentralized information exchange platforms (or “blockchains” for short).

From a computer science perspective, Ethereum is a deterministic but practically unbounded state machine, consisting of a globally accessible singleton state and a virtual machine that applies changes to that state.

From a more practical perspective, Ethereum is an open source, globally decentralized computing infrastructure that executes programs called smart contracts. It uses a blockchain to synchronize and store the system’s state changes, along with a cryptocurrency called ether to meter and constrain execution resource costs.

The Ethereum platform enables developers to build powerful decentralized applications with built-in economic functions. While providing high availability, auditability, transparency, and neutrality, it also reduces or eliminates censorship and reduces certain counterparty risks.

Compared to Bitcoin

Many people will come to Ethereum with some prior experience of cryptocurrencies, specifically Bitcoin. Ethereum shares many common elements with other open blockchains: a peer-to-peer network connecting participants, a Byzantine fault–tolerant consensus algorithm for synchronization ...