Ethereum is a blockchain platform developed by Vitalik Buterin Ethereum in collaboration with Joe Lubin, founder of ConsenSys, which was launched in July 30, 2015.
The blockchain has its own cryptocurrency, Ether or Ethereum, which is currently the second largest cryptocurrency in the market by market cap, just behind Bitcoin.
One of the most relevant aspect of this project is its blockchain, which is not only the network where it native token lives, but is also home to a long list of tokens. Why? The answer is very simple: Ethereum and its smart contracts are are perfect for the development of new projects, which do not have to create their own blockchain from scratch and can take advantage of Ethereum’s rich ecosystem. We are sure you have seen many projects whose tokens are based on the ERC-20 standard, right? Well, that is the Ethereum standard.
What are smart contracts?
They are contracts that execute themselves without the intervention of third parties and are written as a computer program instead of using a printed document with legal language. They have a lot of practical uses, including futures contracts, loans collaterals, etc.
As far as the practical uses of its native token is concerned, Ether is accepted as a means of payment in multiple merchants, including Overstock, Shopify and CheapAir.
At the moment, the Ethereum network is based on the proof-of-work consensus algorithm, the same as Bitcoin. However, its upcoming Ethereum 2.0 upgrade will change this, since PoW will be replaced by proof-of-stake (PoS), in which users will be able to validate transactions and contribute to the network not by mining blocks with their GPUs or ASIC devices, as is the case with PoW, but staking (holding) a certain amount of Ether, which is currently set at 32 ETH.
For a more extensive guide on Ethereum, please visit Investopedia.