How Ethereum is changing the world

Rage Review : For nearly 500 years, people have been hoping to see technological innovation companies subvert the traditional banking industry. Although there is still a long way to go, the development of digital currencies and smart contracts will eventually enable companies to operate as fast as we want. Such companies are DACs (decentralized autonomous companies), whose distinctive feature is that the company is a program and its employees are composed of automatically running machine nodes. Bitcoin is one of the first models of such companies, and Bitcoin network miners are regarded as employees, rather than humans in the traditional corporate model. Ethereum has gone a step further on this basis.

Translation: Annie Xu

Travis Paron is a digital currency researcher and Ethereum technology course instructor. Below, he will talk about how Ethereum smart contracts open up new areas of Internet innovation.

Since the beginning of 2016, fans of the digital currency industry have been closely following the development of Ethereum, the next generation digital currency platform.

The latest development of Ethereum is the integration of the Bitcoin blockchain, with the goal of building a global decentralized, non-private digital computer for executing peer-to-peer contracts. In simple terms, Ethereum is a world computer that you cannot shut down.

The fusion of digital currency architecture and Turing completeness can enable entirely new industries to blossom. The traditional industry model of acting as a middleman will face increasing pressure.

Supporters would say the innovation would eliminate the need for authorization mechanisms, fraud and third-party coordination on the Internet.

Ethereum Virtual Machine

Ethereum virtual machine (EVM) refers to the protocol that handles internal state and computation. It is often seen as the definition of innovation for blockchain-based systems.

Ethereum integrates the Bitcoin cryptographic payment architecture and Turing-complete scripting language in an attempt to develop the most effective tool for blockchain smart contract execution.

"Turing complete" here refers to a system that can perform any logical step of a computational function.

One Turing-complete scripting language that is widely used today is JavaScript, the programming language that powers the world’s web. Smart contracts are computer protocols that are self-executing and self-executing without the need for contractual terms.

What distinguishes Ethereum from Bitcoin is that it is not primarily a payment system, but a computing platform.

The Ethereum blockchain’s digital currency, Ether, is what powers the computing platform. Miners who use the platform’s resources spend Ether.

The more Ether a user holds, the more "fuel" they can inject into the Ethereum virtual machine computing engine.

Autonomous institutions

A notable feature of 21st century companies is that their employees will be machines rather than humans.

Bitcoin is one of the first models of such a business. Bitcoin network miners are considered employees rather than humans in the traditional business model.

Ethereum takes this a step further. Interestingly, the role of the consumer will be replaced by machine functions, as the smart contract system supports end-to-end payments without human intervention.

Ethereum will build an economy where machines and devices are connected. The way machines transfer data and funds will dwarf the efficiency of human input. Companies that ignore this trend will pay a heavy price because new supply channels will emerge that do not require traditional third-party infrastructure.

In an environment where businesses operate independently, digital currencies will have advantages over traditional currencies.

Consumers today expect instant, global, and frictionless payments. For nearly 500 years, people have been hoping that technology innovation will disrupt the traditional banking industry. Although there is still a long way to go, the development of digital currencies and smart contracts will eventually allow businesses to operate at the speed we want.

Ethereum is currently at the stage where Bitcoin was in 2010, with immature infrastructure, a lack of developers, skeptics and competitors like Rootstock. But Ethereum is struggling to bring legitimate use cases to the market.

From trustless public sales to democratic institutions, smart contract platforms will open up new frontiers for Internet innovation.