Over the last few months, I have written a few articles on various topics of cryptocurrency. Given the increased demand around cryptocurrency, I wanted to continue these brief articles and wanted to discuss what Ethereum is. Below is a high-level summary of what Ethereum is. Please feel free to post any follow up questions in the comment section below.
Ethereum is an open software platform based on blockchain technology that enables developers to build and deploy decentralized applications. Ethereum has a lot of similarities to Bitcoin as they are both a distributed public blockchain network, but there are also a few key differences as well. The biggest and most important distinction is that Bitcoin and Ethereum differ substantially in purpose and capability. Bitcoin offers a peer to peer electronic cash system and is used to track the ownership of digital currency. Ethereum blockchain focuses on running the programming code for any decentralized application. The biggest core innovation is the Ethereum Virtual Machine which is the complete software that runs on the Ethereum network. It allows anyone to run any program regardless of the programming language. Instead of having to build an entirely original blockchain for each new application/software, Ethereum enables the development of potentially thousands of different applications all on one platform.
There are a lot of uses for Ethereum as well. In reality, any services that is centralized can be decentralized using Ethereum. This can include banking, title registries, voting systems, regulatory compliance, etc. Ethereum can also be used to build organizations that are completely decentralized with no single leader. Instead its run by programming code or a collection of smart contracts drafted on the Ethereum blockchain. This cane create huge benefits include security, no downtime, and no ability for a third party to make changes to the data. However there are downsides to the applications as everything created within Ethereum is created by humans and they are only as good as the people who write them.
Given the recent explosion of Ethereum, there are many companies that offer you training on how to develop within the Ethereum platform. There are also some very interesting applications that are being created on Ethereum. These include:
- Uport – which provides a secure way to take control of identity and personal information. So instead of relying on government institutions and giving your information to third parties, users control who can access and use their data/personal information.
- Augur – This is a prediction and forecasting market platform that allows anyone to forecast events and receives rewards for predicting them correctly. This is real world events such as who will win the next US election or predicting who will win a sporting event.
- BlockApps – Provides an easy way for enterprises to build, manage, and deploy blockchain applications.
- Weifund – Platform for crowdfunding.
Overall this technology is still very new and it is not regulated similar to other cryptocurrencies . Make sure you do the research before you venture into anything related to Ethereum or other crypto currencies.