Ethereum is considered a whole new type of cryptocurrency. It is an open software platform based on blockchain technology that runs smart contracts. There is a currency that is used by this system and is built into it, which is called Ether or ETH.
Ethereum origins
Ethereum starts in 2013, when 19-year old Vitalik Buterin proposed a platform that could make blockchain store and execute computer programs across an international network of distributed codes. In 2014 Ethereum went through a crowdsale where around $14 million was raised. In 2015 the first beta release was launched. In 2016 the first major Ethereum upgrade was released.
Smart Contracts
Ethereum allows users to make Smart Contracts. By Smart Contract we actually mean computer code that can facilitate the exchange of anything that has or doesn't have value. It is a self-operating program that automatically executes when certain conditions are met. The important point is that Ethereum allows to create almost any kind of operations. So two parties make a contract. They are anonymous, but the contract itself is a public ledger. Then the triggering event takes place and the contract executes itself.
Ether or ETH
Ether is a different type of cryptocurrencies, compared to bitcoin or litecoin, for example. We can describe it as a fuel or gas to the Ethereum network. It allows smart contracts to run. In other words it validates blocks on Ethereum blockchain, which contains the smart contract code.
Users interacting with applications on this platform are supposed to pay with ETH.
Advantages of Ethereum
- Ethereum allows executing complex contracts.
- Users can create their own contracts
- Ethereum network has an incredible amount of corporate clients
- The process of creating programs is simple. There are a lot of ways to integrate into Ethereum.
- It is secure. Ethereum is well protected against hackers.
Disadvantages of Ethereum
- It is rather slow. Almost every user of Ethereum remebers the day when Cryptokitties came out and the whole ethereum system was dead for a day.
- It is impossible to change contracts. After you write it absolutely nobody will be able to change it. It may seem to be a great advantage until you make a slight mistake in a code.
- It is in a constant change. Depending on your habits, you can see it as a disadvantage, because you have to follow.
- The lack of certain background can lead to loopholes in contracts.