What is Ethereum?

While all the world is talking about Bitcoin and other cryptocurrencies , since 2014 there has been no less interesting development in the background: Ethereum. Delighted by the cryptoscene, it is an evolution of the Bitcoin blockchain. Ethereum is an open source platform with its own block chain for the execution of smart contracts (self-executing contracts). Fees for the transactions of the Smart Contracts are paid with Ethereum's own crypto-currency Ether. Ethereum and Ether, respectively, became Bitcoin's second-strongest cryptocurrency after just one year and remains among the top five largest cryptocurrencies by market capitalization.

The founder of Ethereum: Vitalik Buterin

Ethereum was founded in 2014 by the then only 20-year-old Vitalik Buterin. As a digital Lenin, as a blockchain genius and as a prodigy He is celebrated by the media and his visions of a decentralized and fairer (financial) market, a capitalism that should be transferred away from the centralization of power of a few in the hands of distributed machines. Because who steers eg money flows, possesses power. In this case, it is the information that users have to disclose to payment institutions in order to use fiat money. Several institutions access this data. To decentralize that power and make payments without middlemen, Bitcoin seemed to have the right project for him. He became part of the early Bitcoin community and started Bitcoin magazine with friends. After the revelations of Edward Snowden, the struggle for a free Internet became even more important to him. He then further developed the blockchain to a more powerful system. As an object-based programming language, he implemented solidity, which is based on J.script.

"Ethereum enables the decentralized web, referred to as 'web 3'. This is Ethereum, there are no web servers, and therefore no middlemen to take commissions, steal your data or offer it to the NSA, and of course nothing to DDoS. "

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Ethereum also sparked interest in Silicon Valley. Peter Thiel, founder of Paypal and associate member of the Facebook Consortium,  was one of the first to invest in his idea. After a short development period, Buterin won the World Technology Award in 2014 with the idea of ​​Ethereum.

Application examples of smart contracts

With Smart Contracts, small protocols in which conditions are enrolled, it is possible to save contracts of any kind in the blockchain . For everyone from the outside comprehensible, decentrally stored and thus forgery-proof.

A system that is interesting for companies, large banks and insurance companies as well as entire industries and countries, because Smart Contracts can virtually map and organize parts of the world. Use cases exist, for example, in identity management: Personal information, contracts, services or assets can be transferred and stored decentrally and anonymously without third-party providers or intermediaries. Electronic elections can be conducted in a tamper-proof manner, and companies or entire industries can move their headquarters completely into the Ethereum Blockchain, rather than into a nation-state.

DAO - Decentralized Autonomous Organization

The DAO (Decentralized Autonomous Organization), the first purely virtual organization, shows what it might look like if company headquarters were implemented in the network and organized in a decentralized manner. As " the first company without people " , ZEIT titled the project saved in the blockchain by means of a smart contract. In less than a month, the DAO raised approximately $ 150 million in capital by crowdfunding, making it the largest crowdfunding ever. Unfortunately, the experiment failed because the DAO contract was hacked. This led to a means of a hard fork to a splitting of the Ethereum community in Ethereum and Ethereum Classic.

What can a grassroots decentralized organization without an owner look like? Who wants to have voting rights for the organization, acquires ether deposits via crypto exchanges and thus receives DAO tokens. These deposits are used to plan and finance projects. Each investor or DAO token owner can submit proposals - suggestions - or rather, to enroll in the blockchain. The members can then vote on whether the project should be realized. All operations are stored as smart contracts, so that decisions are transparent and can not be manipulated.

Ethereum Enterprise Alliance (EEA) establishes a private Ethereum Blockchain

Vitalik Buterik's initially socialist vision of a public and non-profit decentralized network was overtaken by reality. The founding of the Ethereum Enterprise Alliance took place in secret. Forums have vividly puzzled over the meetings of multinational corporations with the Ethereum Consortium and voiced the disappointment that Ethereum had sacrificed his visions to capitalism. In early 2017, it was revealed that major corporations such as Microsoft, IBM, Goldman Sachs, Accenture, UBS, etc. and Blockchain startups had agreed on a common standard for a private block chain in the Ethereum network. Since then, the value of Ethereum has grown rapidly.

Source of info cryptomonday.de.