Ethereum is a blockchain platform with its own cryptocurrency, called Ether (ETH) or Ethereum, and its own programming language, called Solidity.
As a blockchain network, Ethereum is a decentralized public ledger for verifying and recording transactions. The network’s users can create, publish, monetize, and use applications on the platform, and use its Ether cryptocurrency as payment. Insiders call the decentralized applications on the network “dApps.”
As a cryptocurrency, Ethereum is second in market value only to Bitcoin.
Ethereum was created to enable developers to build and publish smart contracts and distributed applications (dApps) that can be used without the risks of downtime, fraud, or interference from a third party.
Ethereum describes itself as “the world’s programmable blockchain.” It distinguishes itself from Bitcoin as a programmable network that serves as a marketplace for financial services, games, and apps, all of which can be paid for in Ether cryptocurrency and are safe from fraud, theft, or censorship.
Ethereum was launched in July 2015 by a small group of blockchain enthusiasts. They included Joe Lubin, founder of ConsenSys, a blockchain applications developer that uses the Ethereum network. Another co-founder, Vitalik Buterin, is credited with originating the Ethereum concept and now serves as the company’s CEO and its public face. Buterin is sometimes described as the world’s youngest crypto billionaire. (He was born in 1994.)
The Ether cryptocurrency was designed to be used within the Ethereum network. However, like Bitcoin, Ether is now an accepted form of payment by some merchants and service vendors. Overstock, Shopify, and CheapAir are among the online sites that accept Ether as payment.
What Is Ethereum in Simple Terms?
Ethereum, like any blockchain, is a database of information that is designed to be unhackable. Ether, or ETH, is the cryptocurrency used to complete transactions on the blockchain.
Unlike in a traditional database, information in a blockchain is organized as a chronological “chain” made up of “blocks” of data. For instance, every transaction using an Ether coin must be verified and recorded as an additional block on that coin’s unique blockchain. This process of recording every transaction in a sequence is the reason that a blockchain is often compared to a ledger.
The Ethereum blockchain stores more than transaction records for Ether currency. It allows software developers to create games and business applications, called dapps, and market them to users. Those users want to take advantage of the relative lack of risks that come with storing sensitive information on the World Wide Web.