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LINKS FOR ADDITIONAL READING FOR THIS VIDEO & ALL INFO IN TEXT DOWN BELOW
Proof of Work Explained: https://www.youtube.com/watch?v=0_G38wueXBc&t=9s
There’s no denying the fact that many people are interested in cryptocurrencies for the sake of making some money.
But i think it would be a mighty big shame if people missed out on the bigger picture.
There is a reason why so much speculation exists in this space, it’s because the foundation is rich in technological advancements.
If you think it would be boring or too difficult to try and better understand the tech behind these cryptocurrencies, allow me to challenge that notion.
At the very least, if you have a better understanding of what it is you’re investing in, it’ll make it a hell of a lot easier to hold on during these tough times.
Today let’s take a look at the Ethereum Virtual Machine.
First let’s establish that Ethereum is similar to Bitcoin in that it uses a blockchain and it uses Proof of Work as its method of achieving consensus on the blockchain.
If you need a refresher for what this means exactly, check out the links to my other helpful videos down below in the description.
Ethereum is often called a second generation blockchain. This refers to the fact that it’s creators have built on the idea of how Bitcoin works and added to their blockchain the ability to do more than just monetary transactions.
Ethereum introduced the world to smart contracts.
Smart contracts are programs that can be created to facilitate a whole bunch of different interactions. These smart contracts set rules or specifications. Once the rules or specifications are met, there is an automatic triggered event which fulfills the smart contracts purpose.
They are called contracts because they represent an agreement. They are called smart contracts because they can execute themselves.
Because of the distributed, decentralized nature of the Ethereum Network, the smart contracts will continue to execute even if your computer crashes.
Things that smart contracts are good for:
Transparent governance for communities
Secure foundation for ecommerce
This brings me to the Ethereum Virtual Machine. It sounds cool and it’s function doesn’t disappoint.
All nodes on the Ethereum Network run the EVM in addition to validating transactions. They all run the same instructions or smart contracts. It is this distributed network of computers running the Ethereum Virtual Machine that gives Ethereum is reputation as a “world computer”.
It’s important to note that the EVM is altogether separate from the main network.
Because of it’s separation from the main net, The Ethereum Virtual machine can be thought of as a testing grounds for smart contracts. You can deploy your newly written and untested code to this network of computers and see how it fairs. This is essential for projects who have a lot on the line. If smart contracts are deployed to the main network and they end up failing, that could spell disaster for the project behind it.
The Ethereum Virtual Machine tests more than just smart contracts, it also ensures that lines of communication are secure and that the many different systems that run on the Ethereum network aren’t able to cross into each other and ultimately intercept sensitive information.
The Ethereum Virtual Machine was not designed to allow for incredibly fast computing, it actually makes computing time slower and more expensive, that’s a bummer I know, but in return the EVM serves as a defense against denial of service attacks, its allows for high levels of fault tolerance, and ensures zero downtime of the network. Although the birth of some crypto kitties and the excitement that soon followed certainly tested this theory and showed that Ethereum still has some issues to address if it wants to conquer the challenge of scaling for the masses.