Vitalik Buterin, the man behind the creation of Ethereum, proposed his cryptocurrency in 2013. At only 19-years-old, Buterin had dreams of building a programmable blockchain that would soon become the future of information technology. In 2015, the Ethereum platform was launched but it was only March 2017 when the price action of this cryptocurrency began rising and increasing exponentially by more than 3,700%.
While Bitcoin is strictly a virtual currency, Ethereum takes Blockchain technology to another level. It enables users to create and run any applications thanks to a turing-complete programming language called Solidity. Ether is the associated cryptocurrency and is described as “the crypto-fuel for the Ethereum network”.
What are smart contracts?
The Ethereum protocol allows users to generate “smart contracts”, mainly structured as “if-then” statements, which can widen the use of Blockchain technology in the business world. A smart contract is a code that’s uploaded to the Blockchain in a way that disallows downtime or fraud. This type of transaction cannot be changed once registered in the Blockchain, unless it is stated otherwise at the beginning.
A smart contract is smart because it is automatically executed once certain conditions are met. For example: Let’s say “A” wants to rent a car from agency B using the Ethereum protocol. They can use a smart contract stipulating that if and when “A” sends the requested funds, the car rental agency will send them a digital key to use the vehicle.
Everything is recorded within the Blockchain, enabling all participants to see if and when “A” sends the funds, for the digital key to be sent. The Ethereum Blockchain can therefore be used to program any contract, from the simplest to the most complex, such as royalty contracts or shareholders alliance.