Before you should try to understand ethereum, it helps to first understand how the internet works.
In today’s internet, our personal data, passwords and financial info are stored on other people’s computers – in clouds and servers owned by companies like Amazon, Facebook or Google. Even this article is stored and displayed to you on a server controlled by a company that charges to hold this data.
This internet setup has a number of upsides, as these companies deploy specialists to help store and secure this data, and remove the costs that come with hosting and uptime.
But with this convenience comes vulnerability. As we’ve seen in the past, a hacker or a govt can gain unwelcome access to your files and data without your knowledge by influencing or attacking a third-party service – this means they can steal, leak or change crucial information.
Brian Behlendorf, founder and creator of the Apache Web Server, has gone so far as to label this centralized design of the current internet as the web’s “original sin”. Some people like Behlendorf argue that the Internet was always meant to be decentralized, and a splintered movement has sprung up around using new tools, which include blockchain technology, to help achieve this specific goal.
Ethereum is one of the newest and most promising technologies to join this movement.
While bitcoin and other cryptos aim to disrupt PayPal and online banking, ethereum has the goal of utilizing a blockchain to replace internet third parties — those that store data, transfer mortgages and keep track of complex financial instruments.
Ethereum is complex, but think of it as a global, decentralized server system for all things online.