Ethereum is a blockchain platform with its own cryptocurrency, called Ether (ETH) or Ethereum, and its own programming language, called Solidity. It is a decentralized computing platform. You can think of it as a laptop or PC, but it doesn't run on a single device. Instead, it simultaneously runs on thousands of machines worldwide, meaning that no one owns it.
Like all cryptocurrencies, Ethereum works based on a blockchain network. A blockchain is a decentralized, distributed public ledger where all transactions are verified and recorded. Ethereum, like Bitcoin and other cryptocurrencies, allows you to transfer digital money.
Blockchain transactions use cryptography to keep the network secure and verify transactions. People use computers to "mine," or solve complex mathematical equations that confirm each transaction on the network and add new blocks to the blockchain that is at the heart of the system. Participants are rewarded with cryptocurrency tokens. For the Ethereum system, these tokens are called Ether (ETH).
What Makes Ethereum Valuable?
Just like Bitcoin, Ether can be used to buy and sell goods and services. Ethereum has seen rapid gains in price over recent years, making it a de-facto speculative investment. But what's unique about Ethereum is that users can build applications that "run" on the blockchain like software "runs" on a computer. These applications can store and transfer personal data or handle complex financial transactions. Moreover, because it's so flexible, all sorts of sophisticated programs can be launched on Ethereum.
Simply put, the main idea behind Ethereum is that developers can create and launch code that runs across a distributed network instead of existing on a centralized server. This means that, in theory, these applications can't be shut down or censored.
Who Created Ethereum?
Vitalik Buterin is the founder and creator of Ethereum.
Where To Store Ethereum?
Like Bitcoin, Ethereum users can store their Ethereums in a cryptocurrency wallet that technically serves just like a bank account, where users can store, exchange, transfer, and pay for goods and services using their wallets. We will discuss the cryptocurrency wallet types and how to use them in the following chapters!