It’s a decentralized platform for building and using applications on a blockchain distributed ledger.
It’s also referred to as a “world computer”, since the Ethereum platform uses the computing power of the computers connected to its network. The information is stored on each computer, or “node”, meaning it’s decentralized and controlled by no one, unlike a traditional database. There’s no limit on the number of such computers that can connect to the network.
Developed by programmers Vitalik Buterin, Mihai Alisie, Anthony Di Iorio, and Charles Hoskinson, Ethereum was launched in 2015. The project was financed by issuing its own cryptocurrency – ether. The market capitalization of this coin (aka “ethereum”) had already exceeded USD 70 billion as of December 2017, making it one of the top cryptocurrencies.
The Ethereum platform supports the creation of decentralized applications, or “dapps”, which, not controlled by a third party, store data, transfer assets, and so on. They’re resistant to downtime, censorship, and fraud. These applications are run by so-called “smart contracts”, which are computer codes. (Read about smart contracts here.)
Ethereum is often used for Initial Coin Offering projects, since it’s helpful for creating one’s own cryptocurrency to sell and kickstart a project. Other applications already built on Ethereum include systems for voting, real estate crowdfunding, lotteries, gaming, social networking, lending, money transfers, and more. Future projects may address the Internet of Things, predictions markets, the energy transfer business, and so on.
The technology is still young, with constant new developments and improvements. Meanwhile, other platforms like NEM have entered the same field and offer their own solutions for building applications on their blockchains. In March 2017, the Enterprise Ethereum Alliance was established. It connects enterprises from the Fortune 500 (a list of the world’s largest companies), startups, academics, and technology vendors with Ethereum subject matter experts. The Alliance’s aims is business-friendly Ethereum solutions.
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