Blockchain, Bitcoin and Ethereum

Blockchain technologies provide a fully decentralized ledger based on peer-to-peer networks. The Blockchain promise is that network participants can rely on this ledger to safely interact with each other without the need of any central authority or trusting each other. This ledger is represented by a chain of blocks (this is where the term blockchain comes from) where each block contains a number of transactions that have taken place between the network participants. A key feature of blockchain technologies is that blocks in the chain cannot be altered in any way. The only way to change the blockchain is adding new blocks.

Bitcoin – created in 2009 by Satoshi Nakamoto (an unknown person or group of persons) - represents the first successful implementation of blockchain technology. Today, Bitcoin represents the gold standard of virtual currencies and enjoys growing popularity and its currency is soaring again. Luckily, Bitcoin has also set the precedent for blockchain technology to be open source. Recommended pointers being: The whitepaper, the code and a technical book (written in Asciidoctor) are nice examples.

Ethereum was originally conceived by Vitalik Buterin and in late 2013 he described its concepts in a whitepaper. The goal of Ethereum is to provide a blockchain platform that also includes a Turing-complete programming language. Using this formal language, smart contracts can be implemented and deployed to the Ethereum network. After deploying such contracts to the network, they are permanent and available worldwide. Enforcing the contract terms and its execution is then handled by the Ethereum network alone. This concept allows such contracts to act independently of any central authority or infrastructure.

All in all, Ethereum can be seen as the young sibling of Bitcoin. Worrying less and having fun trying new things. It does not (yet) have the stability and track record of Bitcoin but with having the smart contract concept included in its protocol Ethereum is fundamentally more powerful than Bitcoin. As in the case of Bitcoin Ethereum is open source and its codebase is developed openly on Github.