What is Ethereum ?
Ethereum was founded in 2015 by Vitalik Buterin. He saw an opportunity to expand the existing blockchain of Bitcoin. The blockchain called Ethereum and they have their own cryptocurrency called “Ether”.
Ethereum is an open platform that enables developers to build and deploy smart contracts and decentralized applications.
Smart contracts are digital pieces of code running on top of the Ethereum blockchain. In that way you can execute certain tasks on the ethereum blockchain. Smart contracts help you exchange money, property, shares, or anything of value in a transparent, conflict-free way while avoiding the services of a middleman. The best way to describe smart contracts is to compare the technology to a vending machine.
These smart contracts can be programmed without any chart of downtime, censorship or fraud.
The Ethereum blockchain and smart contracts form a super computer. They can :
- Move value
- Represent ownership
- transmit tokenized assets
- Digitize complex financial applications
This let’s developer creates markets, shared ledgers, digital organizations and so on.
All with cutting out the middle man and immutable.
Let’s take an example, we are building a decentralized music application. Musician A is uploading his music to the application through his ethereum address. Then we would have users on the platform who likes to listen to Musician A. User B likes the music of Musician A and is joining the platform through his ethereum address because he likes to listen to the music of Musician A. Every time User B is listening to Musician A a small fee Weill be transferred from User B to Musician A because of his content creation. Therefor the artist remains the owner of his content and get rewarded for others who can enjoy it too. This process could be completely automated by Ethereum.
If you would produce, buy or sell physical goods. You can make through Ethereum every step of the supply chain more transparent and possibly improve your business. Smart contracts can track product movement from the factory to the placement in the shops. Such features provides real-time visibility of an entire supply chain. Advanced tracking allows reducing the risk of fraud and theft as well.
A easy way to understand Ethereum is to see it as a programmable Bitcoin.