Chris Hoff/ November 11, 2017/ Ethereum

What is Ethereum?

To put it simply, Ethereum is an open source software platform that developers can use to create their own blockchain-based applications.  The tokens that are used to power these applications are called Ether (ETH) and they are traded and mined just like bitcoins.

What’s the difference between Ethereum and Bitcoin?

Similar to Bitcoin, Ethereum runs on a decentralized, public blockchain network.  Although there are technical differences between the two, like the mining algorithm and the encryption methods, the main difference between the two is their capabilities and intended uses.

While bitcoin is used as a peer to peer digital currency system, Ethereum was designed to do much more than that.  The bitcoin blockchain focuses solely on tracking ownership of bitcoins, while the Ethereum blockchain is built to run programming code of decentralized applications.

In the Ethereum network, instead of mining for bitcoin, miners  earn Ether (ETH), a type of cryptocurrency that fuels the applications. While Ether can be used as a cryptocurrency to buy goods and services, Ether is also used to pay for transaction fees so the miners can run the code of an Ethereum Application on the blockchain.

What is a smart contract?

A smart contract is a computer code that can facilitate the exchange of money, content, property, shares, or anything of value. When running on the blockchain a smart contract becomes a self-operating application, powered by the computing power of the miners, that automatically executes a specific action when a certain condition is met. Because smart contracts run on the blockchain, they run exactly as intended without any possibility of  downtime, fraud, or a third party interfering.

What Are Some Smart Contract Use Cases?

Smart Contracts can greatly reduce the time and costs of making business deals or keeping records, while ensuring that no data is tampered with and completely eliminating the possibility of fraudulent transactions.  Here is a quick list of SOME use cases:

  • Record Keeping
  • Financial Securities
  • Trade Finance
  • Mortgages
  • Voting
  • Financial Data Recording
  • Supply Chain Management
  • Loans
  • Insurance Claims
  • Research
  • Clinical Trials

And many more!

What are the benefits of Ethereum decentralized Applications?

  • Zero Down Time – Miners across the world are consistently utilizing their computing power to make the applications run.  There is no single point of failure.
  • Tamper proof – Apps are based on decentralized network and require miner consensus and proof of work for data to be processed, therefore it is impossible for any records or data to be tampered with or changed.
  • Secure – As previously stated, there is no single point of failure and every transaction is secured using cryptography.  Because of that, applications aren’t able to be brought down by hackers and sensitive data isn’t able to be stolen.

How Do I Buy Ethereum?

Check out our guide to buying Ethereum here!

How Do I Store My Ethereum?

Check out our approved wallets for guides on how to store your Ethereum securely here!