Advantages and Disadvantages of Ethereum

Ethereum platform benefits from all the properties of the Blockchain technology that it runs on. It is completely immune to any third party interventions, which means that all the decentralized apps and DAOs deployed within the network can’t be controlled by anyone at all.

Any Blockchain network is formed around a principle of consensus, meaning that all the nodes within the system need to agree on every change made within it. This eliminates possibilities of fraud, corruption and makes the network tamper-proof.

The whole platform is decentralized, which means there is no possible single point of failure. Hence, all the apps will always stay online and never switch off. Moreover, the decentralized nature and cryptographic security make the Ethereum network well protected against possible hacking attacks and fraudulent activities.

Disadvantages of Ethereum

Despite the fact that smart contracts are meant to make the network fault-proof, they can only be as good as the people writing the code for them. There is always room for human error, and any mistake in the code might get exploited. If that happens, there is no direct way to stop a hacker attack or an exploitation of said mistake. The only possible way of doing so would be to reach a consensus and rewrite an underlying code. However, this goes completely against the very essence of the Blockchain, as it is supposed to be an unchangeable and immutable ledger.

‘The DAO,’ which is a name of a particular DAO launched on April 30, 2016, was attacked and more than 3.6 mln Ether tokens were stolen from it. The attacker exploited a ‘recursive call bug’ in the code, essentially just draining the funds from DAO into a ‘child DAO,’ that had the same structure as The DAO. The loss of a massive chunk of The DAO’s funding wasn’t the only consequence of the attack, as it basically undermined the users’ trust in the whole Ethereum network, with Ether’s value falling from over $20 to under $13.

What apps were developed on Ethereum?

Ethereum has a potential of opening up the world of decentralized apps even for people without any technical background. If this happens, it can become a revolutionary leap for Blockchain technology that will bring it closer to mass-adoption. Currently, the network can be easily accessed through its native Mist browser, which provides a user-friendly interface as well as a digital wallet for storing and trading Ether. Most importantly, users can write, manage and deploy smart contracts. Alternatively, Ethereum network can be accessed through a MetaMask extension for Google Chrome and Firefox.

The Ethereum platform has the potential of profoundly disrupting hundreds of industries that currently depend on centralized control, such as insurance, finance, real estate and so on. Currently, the platform is being used to create decentralized apps for a broad range of services and industries. Below is a list of some of the most noticeable ones.

  • Gnosis — A decentralized prediction market that enables users to vote on anything from the weather to election results.
  • EtherTweet — This application takes its functionality from Twitter, providing users with a completely uncensored communication platform.
  • Etheria — It feels and looks very much like Minecraft, but exists entirely on the Ethereum Blockchain.
  • Weifund — An open platform for crowdfunding campaigns that implements smart contracts.
  • Uport — Provides users with a self-sovereign ID that enables them to collect verifications, log-in without passwords, digitally sign transactions and interact with Ethereum apps.
  • Provenance — The project aims to create an open and accessible framework of information for consumers to make informed decisions on their purchases. This is done through tracing the origins and histories of products.
  • Augur — An open-source prediction and forecast market that rewards correct predictions.
  • Alice — A platform that aims to bring transparency to social funding and charity through Blockchain technology.
  • Bitnation — The World’s First Virtual Nation, a Blockchain jurisdiction. It contains many of the same functions as a traditional nation, such as insurance, education, ID cards, diplomacy programmes, including ones for ambassadors and for refugees and many many more.
  • Ethlance — A freelance platform to exchange work for Ether rather than any other currencies.

A comprehensive curated list of decentralized apps, which at the time of writing contained 867 of them, can be found on the State of the dApps website.