Common Myths About Ethereum
September 12, 2020 - 3 min read
The use of blockchain technology made it possible to create a network in which all users are equal and information is distributed on countless computers around the world. Decentralization has become particularly important for banks and other economic institutes because it lends a new dimension to the concepts of security and transparency. A study conducted by Professor Emin Gun Sirer in February 2018 showed that Ethereum is far more distributed than Bitcoin as the nodes are spread around the world.
Amidst the hype around the blockchain and its potential use cases, there is much more misinformation about the decentralization of the Ethereum. The technology enables the creation of a network in which everyone is equal and all information is distributed to many computers worldwide. In the past year, the question of decentralization has been asked many times by the crypto community and the developers themselves.
After all, a blockchain is a complex economic system that depends on people's unpredictable behavior, and people will always look for new ways to play it. It have shown how attackers have already figured out how they can benefit from playing popular Ethereum Smart contracts. In short, while blockchain technology has been promoting security for a long time, it can be vulnerable in certain circumstances.
One of the most promising developments in blockchain is the idea of smart contracts. Nowadays, the rise of the Ethereum blockchain makes it easy to develop and implement this concept in a public environment. However, this has created a cloud of confusion about smart contracts.
The groundbreaking innovation is that a blockchain is decentralized, which means that every node (computer) can download the entire blockchain from the start. The Bitcoin blockchain that started in 2008 has a size of more than 200 GB and contains all historical data from 11 years. In perspective, The entire Bitcoin blockchain in the past 11 years.
You can securely store your bank account, password, social security number, etc. on the blockchain without fear of being hacked. With a public blockchain, the data stored in a blockchain is actually visible to everyone who is part of the blockchain network, i.e. every node in the public blockchain network has a local copy of the entire blockchain on its node and can do show data Contents of the blocks. Public blockchains are therefore not suitable for storing confidential or private information (e.g. your password, your social security number or your bank account number), since everyone can view the content of the blockchain.
In order to achieve the desired audience engagement for a blockchain and ultimately determine its acceptance and success, its consensus and governance mechanisms must function transparently. If this decision is wrong from the start, it can have a significant impact on the cost and usability (and therefore likely adoption) of the blockchain in question. Another example of trust in the people involved becomes relevant when the blockchain information is linked to the real world. As will be made clear in the context of the next principle, this link is a combination of people and technologies that ensure that these links are reliably protected against pollution or fraudulent abuse.
Without being overly concerned with controversial analogies, it would certainly be less interesting if we accepted that a Ethereum can only function within the restrictive limits of the digital world without connecting to the analog real world in which we live. In the Transparency and Trust section, these peripheral areas are just as susceptible to errors and malicious interference as the core blockchain and smart contracts automation. For example, suppose we are tracking the history of a valuable collector's item unless we have the ability to reliably identify the physical object in question and risk losing its history or being attributed to another object.
They fit together like clockwork and lose their purpose if something is missing. If we step back from the blockchain clockwork and accept it as a mechanism, we can begin to understand that the economic model that makes it expensive to attack a blockchain make all of these technologies a trustworthy network. If you don't have to trust anyone to trust a recording, you can agree on a single sequence of events without knowing where or from whom we got it. It's just that this trustless mechanism gives the Internet a new level of usefulness, and with it a new incarnation of money.
Through the work of visionary people with a mathematical background, changes were gradually introduced V.Buterin, it seems clear that the contributions must come from a variety of professionals to ensure the successful development of technology and the surrounding ecosystem. It is an exercise that includes evangelization, social psychology, automation, regulatory compliance, and ethical guidelines. The challenges that the market is facing can be interpreted as an opportunity for ambitious entrepreneurs to intervene in and solve the fundamental problems that lie ahead, such as consensus, governance, automation and connection with the real world. With this in mind, it is important to ensure that the people you work with have the skills, technology and understanding of the issues to be resolved to successfully drive forward.