What is Ethereum?
What is Ethereum? It’s a decentralized platform for building and using applications on a blockchain distributed ledger. Find out more in our What Is Ethereum Guide. Here, we try to answer the most common internet searches such as “What is Ethereum for beginners,” “what is Ethereum and how does it work” and “Getting started with Ethereum.”
How does Ethereum work? Simply, 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.
Ethereum history starts from development by programmers Vitalik Buterin, Mihai Alisie, Anthony Di Iorio, and Charles Hoskinson, and it 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.)
Basic facts that you should know about Ethereum are, for example, that it 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. However, this might be not everything you need to know about Ethereum, but there are many books written on the subject which might help you.
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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