Ethereum is a decentralized, open-source blockchain 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 middleman or counterparty risk.
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The project was launched in 2014 by Vitalik Buterin, a cryptocurrency researcher and programmer. Ethereum has since become one of the largest and most well-known blockchain platforms, with a market capitalization in excess of $100 billion.
One of the key differences between Ethereum and other blockchain platforms is its use of smart contracts. A smart contract is a self-executing contract with the terms of the agreement between buyer and seller being directly written into lines of code. The code and the agreements contained therein exist on the blockchain network.
Smart contracts allow for the automation of processes that would otherwise require manual intervention, such as the transfer of funds or the execution of agreements. This can save time and reduce the risk of errors or fraud.
Another key feature of Ethereum is its support for decentralized applications (dApps). These are applications that run on the Ethereum blockchain and are not controlled by any single entity. This allows for greater transparency and security, as there is no central point of failure and no need to trust a third party.
Ethereum has its own programming language, Solidity, which is used to write smart contracts and dApps. This allows developers to create a wide range of applications on the Ethereum platform, including financial applications, games, and social networks.
One of the most well-known dApps built on Ethereum is Cryptokitties, a game that allows users to buy, sell, and breed virtual cats. Other popular dApps include Augur, a decentralized prediction market platform, and MakerDAO, a decentralized finance (DeFi) platform that allows users to borrow and lend cryptocurrency.
Ethereum has faced its fair share of challenges and controversies. One of the biggest challenges has been scalability. As the Ethereum network has grown in popularity, it has struggled to process the increasing number of transactions being made on the platform. This has resulted in high fees and slow transaction times, which has been a barrier to the wider adoption of the platform.
Another controversy has been the issue of governance. Ethereum is an open-source project, which means that it is developed and maintained by a community of volunteers. This can lead to disagreements about the direction of the project and the way it is being run.
Despite these challenges, Ethereum remains one of the most popular and influential blockchain platforms in the world. Its support for smart contracts and dApps has attracted a large and active developer community, and it is likely to continue to be a key player in the blockchain space for years to come.
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