It’s the strongest of top four today.
Yes.
Bitcoin’s sole purpose is to be the virtual currency of the internet, and uses blockchain to do this.
Ethereum focusses on the bigger problem.
Here’s a little bit about Ethereum:
Ethereum was created in 2015 by a man called Vitalik Buterin.
Vitalik had the vision of not only having a decentralised cryptocurrency (like Bitcoin) but also allowing decentralised applications to be created on the Ethereum blockchain that use Smart Contracts.
The whole idea of blockchain is to remove the power from the third parties and allow the user to control their own data.
What is a decentralised application?
“Ethereum is a decentralized platform that runs smart contracts: applications that run exactly as programmed without any possibility of downtime, censorship, fraud or third-party interference.
These apps run on a custom built blockchain, an enormously powerful shared global infrastructure that can move value around and represent the ownership of property.
This enables developers to create markets, store registries of debts or promises, move funds in accordance with instructions given long in the past (like a will or a futures contract) and many other things that have not been invented yet, all without a middle man or counterparty risk.”
To understand this better, I’m going to give an example of how decentralised apps and smart contracts will change the world we live in:
I’ll use pizza as my example, because everyone can relate to pizza!
Say you wanted to order pizza to your house, you have to create an account, enter your banking details and give the app your address to receive your pizza. Many people overlook the risks that are associated with trusting a third party to handle such sensitive data. If this company’s serves are hacked into, the hacker will have your bank details and your address… Scary stuff.
So, you ordered a chicken BBQ pizza, which is everyone’s favorite, and they turn up with a ham and pineapple pizza (wtf), or worse yet they don’t turn up at all! As you have already paid for this pizza, what do you do? The process of refunding this money, is entirely reliant on a third party (often PayPal or your bank) and can take weeks if the refund even happens. Placing your trust in this pizza company is again a risk that is overlooked.
Now let’s use the same example using Ethereum’s blockchain.
You want to buy pizza, you go onto the decentralised app and place your order – your data is stored on the blockchain and you give permission via a smart contract for the pizza company to view your address.
Your order is created in a smart contract and once the order is delivered and verified by you that it is correct, the funds are released to the pizza company.
This may seem minor for a pizza company, but think about more expensive goods and services that users will benefit from this blockchain.
Here’s a few:
A smart contract can be created to pay a worker for every hour they work, they log their hours on the blockchain and then after verification the funds are instantly transferred to them
Buying goods internationally can be tracked and verified – reducing fraud.
Property buying can be facilitated through the contract
Every industry that has a contract in place will be able to use the blockchain of Ethereum
I hope that it is now clear that the technology behind Ethereum will have a real world use and change how business operates entirely.
It is worth noting that Ethereum is also vastly quicker than BTC, average block time being 15 seconds for Ethereum opposed to 10 minutes for BTC.
Thanks for reading this article,