Ethereum – An Alternative to Bitcoin

Ether Historical Market Capitalization Chart (Source: https://etherscan.io/chart/marketcap)

“Ethereum is an open blockchain platform that lets anyone build and use decentralized applications that run on blockchain technology”.

The Ethereum blockchain platform facilitates scripting functionality, or ‘smart contracts‘, which are run through the nodes in the network. As a result, unlike the Bitcoin blockchain, it does not just track transactions, it also programs them. Technically, Ethereum is a Turing-complete virtual machine with its native cryptocurrency called ‘ether’. The platform was proposed in 2013 in a white paper by the then 19-year old Vitalik Buterin.

As of October 2017, Ethereum had a market cap of over $28 billion, making ether the second most valuable cryptocurrency after Bitcoin. 

Ethereum applications do not have a middleman; instead, users interact in a P2P fashion with other users through a variety of interfaces – social, financial, gaming, etc. Since the applications are developed on the decentralized consensus-based network itself, third-party censorship is virtually impossible. Malicious actors cannot secretly tamper with the application by changing the code and compromise all application users (or nodes that are actively interacting with it). These Decentralized Applications have come to be known as Dapps.

Since they are cryptographically secured, Dapps are referred to as ‘secure applications’. Some of the high profile Dapps built on the Ethereum platform include:

  • Augur, which is a Decentralized Prediction Market. Learn more at https://augur.net/
  • Digix, which tokenizes gold on Ethereum. Learn more at: https://digix.global/.
  • Maker, which is a Decentralized Autonomous Organization (DAO). Learn more at: https://makerdao.com/.

Since they are cryptographically secured, Dapps are referred to as ‘secure applications’. Some of the high profile Dapps built on the Ethereum platform include:

The Ethereum network is a distributed global public network, which means it is not run on central servers in a certain geographical location. Instead, the computing power that runs the network is contributed by nodes that are spread across the globe. In other words, Dapps have ‘zero downtime’ – they never go down and, in general, cannot be switched off.