Ethereum

What is Ethereum?

Ethereum is an open-source, blockchain-based, decentralized computing platform created by Russian-Canadian programmer Vitalik Buterin in 2015 with an initial supply of 72 million Ether (the platform’s currency, or fuel). It builds on Bitcoin’s innovation with some significant differences. While both let you make digital payments to banks and payment partners, Ethereum is programmable and acts as a marketplace for financial services, games, and other apps without being censored. Let's understand why it is gaining popularity and how it will shape our "digital future."

If you’re confused about the potential Ethereum has, say 5-10 years from now, a direct parallel could be made to Linux in the early days of the internet. Ethereum’s network, called the Ethereum Virtual Machine, is directly comparable to how Linux enables Google’s and Facebook’s servers to function. Ethereum can be termed as Linux, but for blockchain-based applications, offering a wide array of use cases, opening up a plethora of opportunities.

The most common use case of Ethereum is that it allows the transfer of digital money, but its capability extends far beyond than simply facilitating smooth transfers. It is the most flexible platform, and one can create, run, code, and program on Ethereum's decentralized server, which means the permission to execute this code is not centrally controlled. Neither can those programs be shut, edited, or tampered with by any external parties because of its underlying technology - blockchains. Ethereum’s blockchain is similar to that of Bitcoin blockchain, where the data is safe, immutable, secure, and transparent.

In other words - we’re taking the concept that made Bitcoin possible - and applying it to literally every industrial, commercial or personal application in the world.


What’s Different in Ethereum?
But one might ask if Ethereum and Bitcoin's blockchain technology is inherently same, how are they different?

The significant difference is that Bitcoin uses blockchain technology to create a global digital value system. It is specific in its functionality (that of moving money) and doesn't accommodate applications outside of transactions very well. Remember - Bitcoin functions more like an app.

But Ethereum functions like an app store.

However, Ethereum creates a global digital cash system that allows developers to experiment with their code and create Decentralized Applications (DApps), or applications that are open-source, decentralized (not controlled by a single entity or authority, but rather by its community), and are cryptographically secure. Picture having a social media platform that is not owned or controlled by anyone. No one owns anyone's private data, and there is no apprehension or threat to data leakage or misuse.

Today, any platform that has access to personal data weilds immense power. It can shape a user’s decision-making right from what they should eat to how and where they should (and can) spend their money, eerily similar to George Orwell's fictional novel Nineteen Eighty-Four.

With Ethereum, developers are enabled to build on their algorithm-based technologies and build apps on their apps on Ethereum’s decentralized network. They cannot be confined to a centralized setup that gives an organization or individual uncomfortable levels of power. In the words of Vitalik Buterin - instead of putting the taxi driver out of a job, blockchain puts Uber out of a job and lets the taxi drivers work with the customer directly.

While Bitcoin is the leading cryptocurrency in terms of performance and market cap today, thanks to the popularity of DApps, (Decentralized Finance apps, in particular), many experts in the industry predict that Ethereum may soon outperform Bitcoin.

DApps
Ethereum’s DApps have truly been a game-changer, revolutionizing several sectors - right from banking and entertainment, to gaming. It’s a thriving ecosystem already, with DApps such as Uniswap in Finance, a gaming DApp called Dark Forest, and Foundation, a DApp that helps buy and sell digital artworks and fashion from well-known artists and brands. These use cases are shining examples of developers being let loose on an ecosystem with no boundaries, and successfully leveraging its capabilities to create a secure decentralized digital network that uses smart contracts