What is Ethereum?


“World Computer”, that’s the best word to describe the Ethereum blockchain. Ethereum is a distributed computing platform where people with coding skills can create contracts. These contracts are called as smart contracts. To execute a smart contract you need Ether: which is ethereum’s default token. Let’s breakdown the technical jargon into somethings simplified.

Smart contract is best explained with analogy. Buying of land property can be made simple using smart contracts. A contract can be created by government where all land properties are registered in the Ethereum blockchain chain. When a person wishes to buy that property, he can go to the government website and find the land and click on buy option. The smart contract will automate the remaining steps. Money will be transferred from to buyers account to the sellers account, ownership will go to the new buyer. Since the transaction occurs though the government all tax obligations will be finalized automatically and data of transaction will be open for the government to scrutinize. That’s the simplest example for a smart contract.

Ether on the other hand is literally the fuel for smart contract. If you as a developer wants to create a smart contract on ethereum blockchain, you need to pay for it using Ether token.

Ethereum is open source and decentralized like Bitcoin. But differs in the case that ethereum allows various applications to run on top of ethereum blockchain in the form of smart contracts.

Ethereum may also be seen like Google app store or Apple store. Developers can create apps and publish on app store for a price. Now these apps may or may not benifit millions of users like us. That’s a brilliant use case and one which has immense possibilities. Only future will tell how things turn out in the world of cryptocurrency and what position ethereum will occupy in crypto world.

 

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