Ethereum is a decentralized platform that runs smart contracts: applications that run exactly as programmed without any possibility of downtime, censorship, fraud or third-party interference. It is a blockchain-based distributed computing platform featuring smart contract functionality.
Ethereum is a decentralized platform that runs smart contracts: applications that run exactly as programmed without any possibility of downtime, censorship, fraud or third-party interference. These apps run on a custom built blockchain, an enormously powerful shared global infrastructure that can move value around and represent the ownership of property.
Ethereum was proposed in late 2013 by Vitalik Buterin, a cryptocurrency researcher and programmer. Development was funded by an online crowdsale that took place between July and August 2014. The system went live on 30 July 2015, with 11.9 million coins “premined” for the crowdsale. This accounts for about 13 percent of the total circulating supply.
Ethereum is different from Bitcoin in that it can be used to build Decentralized Autonomous Organizations (DAOs). A DAO is a fully autonomous, decentralized organization with no single leader. DAOs are run by programming code, on a collection of smart contracts written on the Ethereum blockchain. The code is designed to replace the rules and structure of a traditional organization, eliminating the need for people and centralized control. A DAO is owned by everyone who purchases tokens, but instead of each token equating to equity shares & ownership, tokens act as contributions that give people voting rights.
Ethereum also provides a cryptocurrency token called “ether”, which can be transferred between accounts and used to compensate participant nodes for computations performed. “Gas”, an internal transaction pricing mechanism, is used to mitigate spam and allocate resources on the network.
Ethereum is also used as a platform to launch other cryptocurrencies. Because of the ERC20 token standard defined by the Ethereum Foundation, other developers can issue their own versions of this token and raise funds with an initial coin offering (ICO). In this fundraising strategy, the issuers of the token set an amount they want to raise, offer it in a crowdsale, and receive Ether in exchange. Billions of dollars have been raised by ICOs on the Ethereum platform in the last two years, and one of the most valuable cryptocurrencies in the world, EOS, is an ERC20 token.
Ethereum has recently faced criticism for its scalability issues. The Ethereum network is currently able to process about 15 transactions per second, compared to the thousands that major credit card companies can handle. This has led to congestion on the network, with some users unable to access their funds. Ethereum developers are working on solutions to address this issue, such as the implementation of the Plasma protocol and the Raiden Network.
In conclusion, Ethereum is a decentralized platform that runs smart contracts and provides a cryptocurrency token called “ether”. It is used to launch other cryptocurrencies and has recently faced criticism for its scalability issues. Ethereum developers are working on solutions to address this issue, such as the implementation of the Plasma protocol and the Raiden Network.