Learning Outcomes
1. Theory
What is Ethereum
Ethereum is a decentralized blockchain that supports smart contracts. Unlike Bitcoin, which only supports the transfer of the Bitcoin token around the network, Ethereum is more general purpose.
Developers can build dApps, or decentralized applications, which can be executed on the Ethereum network. The global state of Ethereum therefore consists of more than just the balance of every account, but also the state of each dApp.
dApps are built on Ethereum using it's programming language, Solidity. You can write smart contracts using Solidity and deploy the smart contracts to the Ethereum Network.
It maintains consensus across all the computers in it's network with Proof of Work (PoW). In the near future Ethereum will be moving to a Proof of Stake (PoS) mechanism.
Ethereum Basics
History
Ethereum was originally proposed by Vitalik Buterin, a young programmer and co-founder of the Bitcoin Magazine. Buterin used to argue with the Bitcoin core developers that the blockchain technology can have much wider impact than just monetary exchanges and blockchain needed a general purpose programming language to go with it.
When he failed to make any changes there, he went ahead and proposed the development of a new blockchain platform with a Turing-complete programming language (Solidity), that went on to be what we know as Ethereum.
What is Ether
Ethereum has a native currency called "Ether", or "Eth". This token is required to pay transaction fees for transactions done on the Ethereum network.
What are Smart Contracts
Smart contracts are small computer programs that are replicated and processed on all the computers on the Ethereum network without a central coordinator. Smart Contracts allow you to program contracts that can be automatically enforced by computer code.
The general-purpose nature of Ethereum allows for any number of possible applications to be built on top of it, which all inherit the security and decentralization benefits that come from running on the Ethereum blockchain.
ERC20 Tokens
In addition to Ether, people can create and use their own currencies on Ethereum. The most common form of currency is ERC20 tokens. ERC20 Tokens are smart contracts that fit a specific standard. Developers can extend beyond the standard, but should meet the minimum requirements when making their own token. The standardization allows for digital wallets to easily support all types of tokens, without needing specialized code for each token created.
ERC721 and ERC1155 Tokens
These are what are also called NFTs. These two standards, similar to ERC20, provide a base line for what requirements should be met when creating NFTs. They provide similar benefits as well, allowing wallets and NFT marketplaces to instantly be compatible with all NFT collections as they all follow one of these two standards.
and many more...
Required Readings
Recommended Readings
- https://ethereum.org/en/whitepaper/
- https://cointelegraph.com/explained/erc-20-tokens-explained
- https://www.youtube.com/watch?v=ZE2HxTmxfrI
- https://blockgeeks.com/guides/smart-contracts/
- https://www.investopedia.com/news/what-erc20-and-what-does-it-mean-ethereum/
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