The heart of the “Ethereum Manual for Digital Primitives” lies in this chapter, where the reader finally begins to grasp the potentialities of the decentralized world. However, all these utopian dreams wouldn’t be possible without Ethereum. As highlighted in the previous chapter, Bitcoin’s functionality is limited to currency exchange, whereas Ethereum proposes itself as the App Store of the decentralized world. Anyone with programming skills can now build an app to decentralize an aspect of Homo sapiens’ life. This app will be immutable and decentralized, preventing direct control by any single entity.
For example, ENS is an app that decentralizes the registration of internet domains. The reader has surely dealt with a URL, such as “google.com”. The link between “google.com” and the web page used by Homo sapiens for searching is precisely the domain. This link is normally saved on servers owned by information monopolies, with all the ensuing problems. ENS, on the other hand, aims to decentralize this information, making the link between “google.com” and its webpage stored in a public domain space where everyone is forced to follow the immutable code rules of ENS. The second part of this manual will dedicate an entire chapter to the functioning of these decentralized apps, called smart contracts.
Ethereum also solves a problem not yet discussed: Bitcoin’s Proof of Work is extremely energy-intensive. Imagine hundreds of thousands of computers competing to solve mathematical puzzles 24/7: the Bitcoin network is estimated to pollute as much as the entire US railway system. Ethereum uses a consensus method called Proof of Stake. Instead of competing against each other, Ethereum computers lock a significant amount of their capital to access a lottery. Lottery winners propose various states, and these states are voted on by other lottery participants. The state receiving the most votes becomes the “official” one. If a computer elected to propose a state suggests a malevolent one and is discovered by the rest of the nodes, it loses half of all its locked funds. In 2015, when Ethereum was launched, the concept of Proof of Stake existed but had not been adequately tested. Therefore, Ethereum initially used Proof of Work, with the commitment to switch to Proof of Stake eventually. This promise was kept in September 2022, reducing Ethereum’s CO2 emissions by 99%.
Another fundamental aspect of the Ethereum network is the interoperability between its applications. For instance, a video posted on a hypothetical Ethagram is also available on a hypothetical EthTok; comments, likes, users, and stories are shared. Of course, for two applications to be compatible, they must share the same standard. Ethereum’s standards begin with the ERC prefix and are discussed by the Ethereum community in various online channels. For example, ERC-20 defines the token standard, which can represent a currency, likes on social media, or votes during elections. If a programmer decides to support the ERC-20 standard in their app, any token from any app will be automatically supported, making the application compatible with the rest of the Ethereum ecosystem. The digital primitive might not fully grasp the significance of this, but a connected digital world makes new types of automation possible. Imagine, for instance, the hypothetical digitization of bureaucracy, using common standards to potentially link banks, tax institutions, and governments to automate every process.
It’s important for the reader to understand that Ethereum is not the product of any tech company; it is simply a program maintained by thousands of different entities. Among these, it’s important to mention the Ethereum Foundation, a non-profit organization that funds projects and research that could not otherwise finance themselves. The interesting roadmap of the Ethereum Foundation envisages a gradual reduction of its tasks within the ecosystem, ideally ceasing to exist the day no more funding for research and projects is needed. The digital primitive must deeply understand the meaning of this choice: Ethereum was born within the foundation, but instead of deciding to make it a product for profit, the foundation chose a path to one day cease being necessary in the ecosystem. This vision is the complete opposite of the capitalistic vision of the contemporary world in which the reader lives.
Previously, the Ethereum community was mentioned, particularly the part that engages in defining the ERCs. In reality, the Ethereum community is much more. As explained in the previous paragraph, the Ethereum Foundation collaborates with thousands of other entities for the development of Ethereum, including companies, universities, foundations, and even other blockchains. These realities are the engine of Ethereum, not only taking care of development but also disseminating information, building new decentralized apps, designing tools to simplify the use of Ethereum, and organizing independent events around the world. If the reader, residing in Italy, wishes to directly experience the Ethereum communities, they can consult the map on the website www.spaghett-eth.com. Milan and Rome stand out as hosting the two largest communities in Italy. The manual encourages the brave digital primitive to seek contact with the nearest Ethereum group, as there is no world of decentralization without the people supporting it. As this text suggests, blockchain is not just a computer issue; its vision has a strong social component.
After the industrial revolution, humans, accustomed to capitalist norms, became increasingly cold and rational. Profit comes before everything else; if a company does charity or cares about the environmental impact, it is probably more an image issue than anything else. Many see the Ethereum ecosystem, on the contrary, as an infinite garden where gardeners are not in competition with each other but work together to make it grow. The rules of the game in the infinite garden are different. To understand their importance, the manual recommends reading “Finite and Infinite Games” by James P. Carse. The book analyzes the differences between finite and infinite games. In a finite game, as the name suggests, there are clear rules, winners and losers, and a defined conclusion. Finite games are played with the goal of winning. Conversely, an infinite game has no clear end or defined winners and losers. It is played with the goal of continuing to play. Traditional capitalism can be seen as a finite game, where companies compete for limited resources and market share. Success is measured in terms of profit and growth, and companies that fail to compete effectively are often eliminated from the market. The Ethereum ecosystem, as described, represents rather an infinite game. Instead of competing for limited resources, actors within it collaborate to create shared value. There is no defined end or ultimate goal, but rather a collective desire to build and sustain a system that can thrive in the long term.
The digital primitive is now laden with new knowledge and, hopefully, new hopes for a better world founded on values such as collaboration, equality, and independence. It’s important to note for the reader that this new decentralized world is not made up only of computer scientists or technicians, but there is a great need for other roles. Therefore, the manual still encourages the reader to become active and contribute by bringing their skills to the ecosystem of the decentralized digital world.