Ethereum is a software platform based on blockchain technology, and it is home to the world’s second-largest cryptocurrency by market capitalization, following Bitcoin. Similar to other cryptocurrencies, Ethereum enables global value exchange without the need for a third party to oversee or intervene unexpectedly.
The primary use case of the Ethereum blockchain is facilitating value exchange, often through its native token called ether. However, many developers are drawn to Ethereum because of its long-term potential and the ambitious vision of its creators, who aim to empower users with greater control over their finances and online data. This ambitious idea, sometimes referred to as the “world computer,” has faced criticism from skeptics who doubt its feasibility. If successfully implemented, it would result in the creation of applications vastly different from platforms like Facebook and Google, which users knowingly or unknowingly entrust with their data.
Ethereum enthusiasts strive to return control to users by leveraging blockchain technology, which decentralizes data by distributing copies to thousands of people worldwide. Developers can utilize Ethereum to build decentralized applications, ensuring that a user’s data cannot be manipulated by the creators of the service.
Ethereum was first proposed in 2013 by Vitalik Buterin, a developer who, at the age of 19, was one of the pioneers in expanding the use cases of blockchain technology beyond transactions, following the footsteps of Bitcoin.
While Bitcoin aimed to disrupt online banking and day-to-day transactions, Ethereum’s creators seek to utilize the same technology to replace internet intermediaries. These intermediaries store data, facilitate mortgage transfers, and keep track of complex financial instruments. While these applications serve various purposes, such as sharing vacation photos on social media, they have been accused of abusing their control by censoring data or unintentionally exposing sensitive user information through security breaches.
The Ethereum platform officially launched in 2015, transforming the concept of Ethereum into a functional network.
Ethereum and the concept of a decentralized internet To understand Ethereum, it is important to grasp the role of intermediaries in the current digital landscape. Intermediaries are ubiquitous today and assist us in various digital tasks. For instance, Gmail helps us send emails, and Venmo facilitates money transfers to friends.
This means that our personal data, financial information, and more are primarily stored on other people’s computers—on servers and in clouds owned by companies like Facebook, Google, or PayPal. Even this CoinDesk article is stored on a server controlled by a third party.
Decentralization advocates find this structure problematic. It reduces users’ direct control and opens up possibilities for censorship, where intermediaries can intervene and prevent users from taking certain actions, such as buying specific stocks or posting particular messages on social media, or even blocking them entirely.
Ethereum aims to redefine how internet applications function by giving users more control. It replaces intermediaries with smart contracts that automatically execute predefined rules.
Many individuals, including internet pioneers, believe that the internet was originally intended to be decentralized. As a result, a fragmented movement has emerged, utilizing new tools to achieve this goal. Ethereum is one of the technologies driving this movement.