Ethereum

If Bitcoin is decentralized money, Ethereum is decentralized everything else

Bitcoin can be compared to a traditional household phone. It sends and receives phone calls, albeit very well, but isn’t capable of doing anything else. On the other hand, Ethereum is like a smartphone. It can do what the old phone can do, and then some. It manages your emails, your online social media profiles, allows you to watch movies and videos, allows you to write reports, and so much more. 

Russian-Canadian programmer Vitalik Buterin published the Ethereum whitepaper in 2013, which described Ethereum as “A Next-Generation Smart Contract and Decentralized Application Platform”. Blockchain technology was seen as truly innovative, but Bitcoin was heavily restricted to its simple programming language. 

As a solution to these restrictions, Ethereum was created to provide a platform for users to build decentralized applications (D’Apps) through smart contracts and provides the infrastructure to build on top of it. As long as a user is familiar with Ethereum’s native programming language, Solidity, they can leverage the platform that is already supported and maintained by thousands of users to build things like: decentralized finance applications (DeFi), including decentralized lending, decentralized money markets, decentralized exchanges, or more game-like applications, like sports betting or CryptoKitties.

Just like Bitcoin, Ethereum is pseudonymous. Unless a user publicly claims ownership of an Ethereum address, transactions on the network are not tied to personal identifiable information. In addition to all activity being publicly viewable, users can also read the code to any of the smart contracts built on Ethereum. The network is maintained by a non-profit organization called The Ethereum Foundation. 

The cryptocurrency associated with the Ethereum platform is called Ether and, similar to the Bitcoin network, miners are rewarded in Ether for updating and validating transactions on the blockchain. Just like bitcoin, Ethereum can send and receive funds, in the form of its native cryptocurrency – Ether.

References

Ethereum Whitepaper, ethereum.org

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