Ethereum is a Blockchain-based distributed computing platform that runs a global and autonomous peer-to-peer network, which was first conceived by the then 19-year-old Russian programmer Vitalik Buterin in 2013. It is fully open-source and public.
Buterin imagined Ethereum as a “Lego of crypto-finance” that would combine a Blockchain based network with a universal programming language that would allow users to invent whatever tools they want. These tools would be able to interact with one another and conduct transactions.
Currently, the Ethereum network provides a variety of services including:
- Smart contract functionality. Smart contracts are automated code that can facilitate and automatically regulate the exchange of money, media content, intellectual or physical property, shares, basically anything of value.
- A global and decentralized virtual machine, the Ethereum Virtual Machine (EVM), which can execute smart contracts deployed by users on the Ethereum network.
- A minable cryptocurrency called Ether (ETH), which can be used as money, it can be transferred between peers and used to pay mining nodes for computations performed.
- Ethereum Gas, an internal transaction pricing mechanism, used to mitigate spam and allocate resources on the network.
Ether is the third most valuable cryptocurrency in the world, with the second highest market value. Its price and popularity have been increasing steadily in recent months. The total value of all the ether (ETH) in circulation is now over $69 billion at $717 per coin, against over $333 billion at a value of $19.909,80 per Bitcoin (coinmarketcap.com; December 17th, 2017).
How is Ethereum Different than Bitcoin?
Ethereum, like Bitcoin, is an application of the Blockchain technology that runs on a distributed public Blockchain network.
However, there are very important technical differences between the two projects. Most importantly, Ethereum and Bitcoin differ significantly in their capabilities and purposes.
Bitcoin is a particular application of Blockchain technology that aims to provide a peer to peer electronic payment system and as such, the Bitcoin Blockchain deals with the tracking of the ownership of the cryptocurrency (Bitcoins).
On the other hand, besides supporting cryptocurrency services, the Ethereum Blockchain enables developers to build and deploy decentralized applications.
What Can Ethereum Be Used For?
As an emerging, secure and decentralized network, Ethereum has almost unlimited applications, most of which we are still to invent, however, this technology has very important applications of which we will list a few important ones:
Using the Ethereum network, people can freely create and deploy smart contracts that enable us to exchange anything of value, in a peer to peer way, and completely risk-free.
All hospitals and care centers around the world could store, access and share patient’s records. This would revolutionize healthcare services around the world, making your medical data instantly available anywhere, no matter whether you are traveling to China or in visiting your local hospital. Medical research would also greatly benefit from Ethereum implementation, making it easier to obtain and register large amounts of health data obtained by the use of wearable technologies. This, in turn, could help detect patterns to prevent heart attacks or other conditions, it could also greatly assist cure or vaccine development.
Being a decentralized and publicly distributed global network, there is no server for a potential hacker to attack. Your sensitive information or property is properly secured in the Blockchain.
Elections and politics
The utilization of the Ethereum Blockchain to control and register election votes would revolutionize democratic elections, making it impossible to tamper with election results.
Currently, data storage services rely on centralized facilities that handle big quantities of data. This leaves service providers prone to substantial data loss if the data center is destroyed or attacked. Using a globally deployed decentralized data center would eliminate these risks and the Ethereum Blockchain could be used to quickly encrypt and transfer data between millions of servers.