Hackernoon logoWhat is Ethereum? by@asmiller1989

What is Ethereum?

Alex Miller Hacker Noon profile picture

@asmiller1989Alex Miller


I write articles about doing cool stuff with Ethereum, but I have found that some people have no idea what I’m talking about. If you have stumbled across one of my articles and asked yourself “what the hell is Ethereum?”, congratulations — you are exactly the audience I wanted to reach! So I’m going to take a minute to describe what this weird technology is and what it can do for you.

Technical explanation

If you’re here, I’m going to guess you’re a fairly technical person. Below is a description of what Ethereum is from a technical perspective.


I’m guessing you’ve heard of Bitcoin and other cryptocurrencies. If you haven’t, you should check them out because I suspect you will find the topic interesting.

Ethereum is, broadly speaking, a peer-to-peer network that is an extension of a cryptocurrency network.

So, while I would define a cryptocurrency network (e.g. Bitcoin) as:

a peer-to-peer network leveraging a data structure called a blockchain to enable creation and transmission of digital scarcity

Ethereum is more like

a peer-to-peer network leveraging a data structure called a blockchain to enable creation and transmission of digital scarcity as well as a public, global state of arbitrary data that can be updated with a Turing-complete instruction set

The key difference between Ethereum and most other cryptocurrency networks like Bitcoin is in the way that the global network state is represented and operated on.


Bitcoin’s state is very simple: it is a large set of things called unspent transaction outputs (UTXOs). The global set of UTXOs tells you the bitcoin balance of every address in the Bitcoin network. This global state is updated whenever a transaction is processed, moving bitcoins from one user to another. It is important to note that because the entire state of Bitcoin is a set of UTXOs, there are no “users” per se — just addresses that hold bitcoins.

Ethereum’s state is much more complicated because it can be operated on with a more robust set of OP_CODES that make up the Ethereum Virtual Machine (EVM). This instruction set is actually Turing complete, with each instruction priced differently. To allow for this setup, Ethereum uses accounts to represent users. Accounts and data are each subsets of the overall global state that makes up the Ethereum network.

What can I do with Ethereum?

Cryptocurrencies are emerging as a sort of payment rail for the internet. Any user may move units of digital scarcity (which have real world value determined by the markets) without permission. Cryptography ensures that only the user who owns these units of digital scarcity may move them. This is how the internet was supposed to work — as a free and open platform that anyone may use to connect to anyone else without going through an intermediary.

The power of Ethereum over Bitcoin or anything else in the space comes from its developer friendliness. When it comes to developer tools, Ethereum is overwhelmingly the most advanced cryptocurrency technology out there. I have written about how to integrate Ethereum into a typical web developer workflow and how it is actually not as painful as you might think.

So with Ethereum you can easily add any of the following things to your web application:

  • Payments from any user to any other user
  • Payments from a user to you
  • Timestamped, immutable records
  • Password-free logins and automatic user management
  • Your own currency with programmable monetary policy (I haven’t written about this one yet, but it’s coming)
  • Lots of other cool stuff I haven’t thought of

The future

Ethereum is in its infancy, but it’s growing and maturing very quickly. Many of us in the Ethereum community believe it is the defining technological invention of our generation and that it will affect many (if not all) major industries in a profound way. If you find this stuff interesting, I suggest you do some research. Here is a good place to start. Hopefully this short article piqued your interest.

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