What is Ethereum?
Ethereum is a distributed blockchain network similar to Bitcoin. However, instead of focusing on transactions and payments, the Ethereum platform is working to build a “world computer”.
In the Ethereum platform, servers and clouds are replaced by thousands of “nodes”, run by volunteers from across the globe, forming a decentralized and global network. This network has a number of advantages, the first being something called smart contracts.
Smart contracts are applications that run exactly as programmed without any possibility of downtime, censorship, fraud or third party interference. This is a fancy way of saying, a smart contract is computer code, that once setup, runs on its own no matter what.
Imagine automating money so it could save,spend and even invest on its own! Smart contracts aren’t just used for money, they can also facilitate the exchange of property, content, shares or anything of value.
Ethereum also acts as a platform on which companies can build decentralized applications, known as Dapps. Instead of having to build an entirely original blockchain for each new application, Ethereum enables the development of potentially thousands of different applications all on one platform. These applications can easily create their own cryptocurrency to be issued to investors or to be used within their app.
Tokens issued on the Ethereum blockchain adhere to the ERC20 Token Standard. ERC20 defines a common list of rules for all Ethereum tokens to follow. This allows developers to design projects that will be compatible with all ERC20 tokens rather than making changes every time a new token is released.
But wait a minute….I thought Ethereum was a cryptocurrency?
The Ethereum blockchain does have its own cryptocurrency. In the Ethereum network, instead of mining for Bitcoin, miners work to earn Ether.
Ether, sometimes referred to as “gas”, is the fuel for the Ethereum network. Any time someone wants to build a Dapp or execute a smart contract, they have to pay for that service with small amounts of Ether.
As demand increases for Ethereum’s services and more companies build Dapps on the blockchain, Ether becomes more valuable and the price increases. When you invest in Ether, you are investing in the success of the platform.
Ethereum has attracted a lot of interest from investors already, especially big corporations who see the value of Dapps and smart contracts. Some of the companies investing in Ethereum include Intel, JP Morgan and Microsoft!
Ethereum continues to grow and is the most popular platform for launching blockchain startups and issuing original tokens.