So what is Ethereum?
Ethereum is a blockchain that was launched in July of 2015. It’s a part of the Ethereum Foundation, an organization promoting and supporting decentralized tools and apps, called dApps. Vitalik Buterin, a former Bitcoin miner who saw new potential in blockchain technology, is the creator of Ethereum. The Ethereum blockchain also houses a cryptocurrency called Ether.
Why does Ethereum sound familiar?
Ethereum got in the public eye for all the wrong reasons with its involvement in the DAO. We covered all the gory details, but in a nutshell, a user found a loophole in the programming of an Ethereum-based investment fund and siphoned off around $50 million worth of Ether.
DAO investors came to a consensus to create a hard fork, essentially a do over that’s similar to Apple’s Time Machine function, reverting all the Ether back to original users before closing the DAO.
What’s special about Ethereum?
It may not seem like it, but not all blockchains are created equal. Ethereum utilizes smart contracts to create automated transactions over its blockchain. Using these built-in algorithms, users can automatically transfer Ether over the blockchain to other users.
Having smart contracts written into the code is really important, because it makes Ethereum more than a distributed ledger. Other blockchains (like the one behind Bitcoin) have the capability to keep track of transactions. Ethereum’s setup allows developers to create smart contract-powered programs, like the DAO’s, on the Ethereum blockchain. So, when companies announce they’re working with Ethereum, it’s very different than just experimenting with distributed ledger technology.
Where is Ethereum going?
It’s been an up and down few months for Ethereum. After the DAO fiasco and hard fork, Ethereum’s gotten mixed reviews in terms of its future.
Ethereum was the subject of a massive DDoS attack a few weeks ago that no one really paid any attention to. After trying to fix the attacks with little success, Ethereum is probably going to hard fork again to try and fix its network problems.
There are some experts who feel Ethereum is positioned for long term success. Bitcoin expert Gavin Anderson predicted in a tweet that Ethereum should grow larger than Bitcoin. Coinbase CEO Brian Armstrong sees Ethereum scaling better than Bitcoin.
Ethereum also has been working with JP Morgan on a private Ethereum blockchain to be used for derivatives and payments called Quorum. Microsoft recently announced Project Bletchley, an Ethereum-based BaaS (blockchain-as-a-service, and yes, that’s a real phrase) built on Microsoft Azure.