This article gives a brief idea about Ethereum, Ether, Addresses, Private keys and Wallets.
In case you want to know about Block Chain, you can checkout my article on "What is Block Chain?".
If you want to know about Bitcoin, you can check my "Introduction to Bitcoin" article.
Now, let's get into this one.
- Ethereum is a block chain like Bitcoin but with few differences. Bitcoin only supports the transfer of bitcoin cryptocurrency in the network.
- But Ethereum is a general purpose block chain. Developers can build applications on Ethereum block chain. These apps are called Decentralised Applications or DApps for short.
- Before Ethereum, Vitalik Buterin argued that block chain can have much wider impact than just currency exchange. This led to the development of a new block chain platform called Ethereum and a programming language called Solidity to build apps on top of it.
- These DApps by default inherit the security benefits from the Ethereum block chain.
Etheruem Vs Ether
- A lot of beginners have a misconception that Etheruem is a cryptocurrency. But Ethereum actually is a block chain rather than a cryptocurrency.
- Ether or simply Eth is the cryptocurrency that is required to make any transactions on the network.
- An address is a string of letters and numbers that represents your account on the block chain.
- We can interact with the DApps, send or receive funds using this address.
- A private key is kind of a password that is a combination of bunch of letters and numbers.
- This private key allows us to manage the crypto held by the corresponding address.
- To let others interact with us on the network, we need to share our address and it is fine to share our address with anyone.
- But we shouldn't share our private key as it can't be changed later and can't be restored if we forget the password.
- A single individual can have multiple addresses on the block chain.
- A crypto wallet is a manager which manages all the address and private keys that belong to us.
- A seed phrase is a collection of words which is considered as the password for the crypto wallet.
In simple terms, every address is an account on block chain. Like how an individual can have multiple accounts, they can have multiple addresses. Each address has a password which is the private key of the address. A manager which can manage multiple addresses is a wallet. And password for this wallet is called seed phrase.
That's it for this one. The next article will be on Solidity and Smart Contracts.
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