Explaining Ethereum to My Mom

What is Ethereum?

Here is a sentence defining Ethereum using a bunch of words that the average human probably doesn’t understand.

First clarification: Ethereum vs Ether

When people talk about Ethereum often they are talking about two different things. One is the Ethereum Network, and two is the cryptocurrency Ether. Often times people are talking about the cryptocurrency when they say “Ethereum”, but Ether is actually the name of the cryptocurrency, while Ethereum refers to the Ethereum Network (we will go into more details later).

Blockchain

Blockchain is a fancy word for a simple concept. Blockchain is essentially a database. Each item that is stored in this database has a timestamp of when it was created and a link to the previous item created in the database (this is what forms the ‘chain’). That’s about it.

  • hashing
  • encryption
  • duplication aka consensus (all computers in the ethereum network have an exact copy of the blockchain database so if you want to ‘hack’ the blockchain you would literally have to change the data on every single computer in the network which is impossible)
  • the links the items in the database have to its previous item

Decentralized

I think new terms like ‘Ethereum’ are confusing because we don’t have much context around what they mean. It’s common to use an analogy of the Internet to describe Ethereum since they are both decentralized. So here it goes…

Smart Contracts

Smart Contracts are the name Ethereum has given to its apps. Just like anyone can make an app to accesses the Internet, Ethereum allows anyone to make an app to access the Ethereum internet (which just accesses the blockchain, which is just a database).

Why Ethereum is More Awesome than Bitcoin

Bitcoin is only a blockchain based cryptocurrency. While Ethereum is a blockchain based currency (Ether), It also provides a way to create applications that allow access to that blockchain. (remember blockchain = database). Bitcoin cannot do this.

Put the Pieces Together

So, putting all the pieces together, lets rewrite that first sentence about what Ethereum is. Here’s the original sentence to refresh your memory:

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