What is Ethereum?

One of the most ambitious cryptocurrencies to date, Ethereum was launched in 2014 to decentralise products and services for a broad array of uses beyond money.

Often advertised as a “world computer,” Ethereum is a software rather than a monetary currency, that enables new kinds of programs to be run on its global network of computers, programs that, like Bitcoin transactions, cannot be censored or shut down due to the distributed nature of its design.

Ethereum has pioneered the concept of a blockchain smart contract platform. Smart contracts are computer programs that automatically execute the actions necessary to fulfill an agreement between several parties on the internet. They were designed to reduce the need for trusted intermediates between contractors, thus reducing transaction costs while also increasing transaction reliability.

Ethereum’s principal innovation was designing a platform that allowed for the execution of smart contracts using blockchain, further reinforcing the already existing benefits of smart contract technology. Ethereum’s blockchain was designed, according to co-founder Gavin Wood, as a sort of “one computer for the entire planet,” theoretically able to make any program more robust, censorship-resistant and less prone to fraud by running it on a globally distributed network of public nodes.

Why invest in Ethereum?

Today, the Ethereum blockchain is used to power applications that do everything from automating financial services (such as lending and borrowing) to enabling the development of blockchain versions of traditional currencies (like USDC and Paxos Standard).

As these crypto-assets run on Ethereum, they need to buy and spend Ether to use Ethereum’s computing network, creating demand for the asset. This has created a demand for the asset, and has given rise to the idea that Ether is akin to a digital oil, a finite resource that must be used to generate economic activity.

More information about Ethereum

In addition to smart contracts, Ethereum’s blockchain is able to host other cryptocurrencies, called “tokens,” through the use of its ERC-20 compatibility standard. In fact, this has been the most common use for the ETH platform so far: to date, more than 280,000 ERC-20-compliant tokens have been launched. Over 40 of these make the top-100 cryptocurrencies by market capitalization, for example, USDT, LINK and BNB.