Crypto ticker: ETH
Market cap: $80.9 billion
Total supply: No hard cap on supply; coins are issued by the Ethereum Foundation to secure and develop the network
Category: Smart Contracts and Decentralized Applications
Launched: 2015
Ethereum is a smart contract platform – a network of connected computers with a shared ledger. It has built-in currency called Ether, which is what you’ll be buying. This company is a grand slam for tech.
Founded by 23 year-old Vitalik Buterin in 2015, Ethereum has taken off like a rocket.
The most popular use of Ethereum today is initial coin offerings (ICOs). An ICO is when a new cryptocurrency offers its coins for sale to the public. It’s also called a token or coin sale.
When you buy new coins in an ICO, this usually happens on the Ethereum network. You buy the new coins using Ether.
So to participate in ICOs, you usually have to buy Ether on cryptocurrency exchanges (like Bittrex). This creates constant demand for Ether from ICO participants. However, the funds raised in an ICO will eventually be sold to pay for software development and other overhead expenses. Overall, it’s a net positive for the price.
Smart contracts are used to process coin and token purchases from ICOs. You send Ether from your wallet to a specific address, and the contract records your purchase on the blockchain and automatically sends you the new tokens. These smart contracts have all sorts of advanced features like escrow, anti-spam measures, transparency and other additional new innovations.
ICOs saw explosive activity last year. Crypto startups raised nearly $3 billion using ICOs in 2017. And new coins and tokens are still launching every day.
Ethereum essentially allows developers to build applications that run on top of it. Running these applications costs tiny amounts of Ether. This incentivizes developers to write efficient code and helps eliminate spam and malicious traffic.
It’s a powerful platform with practically limitless applications.
Ethereum has the potential to disrupt financial systems, internet architecture and more.
There are hundreds of active young projects that utilize the Ethereum network and more starting all the time.
Two examples include…
Golem (a distributed supercomputer): Golem aims to build the world’s largest distributed supercomputer using individuals’ spare computing power.
Augur: A decentralized prediction market with its own currency.
Corporate members of the Enterprise Ethereum Alliance include many of the largest companies in the world…
Visa
Toyota
Accenture
BP
Intel
CME Group
Cisco
P. Morgan
All these companies are exploring ways to utilize the Ethereum blockchain and network. We are still in the very early stages with Ethereum, but these companies (and millions of people) believe the potential is significant.
Ether is also becoming a widely accepted currency and value store. This is natural with any asset that is valuable, rare, securable and easily transferrable.
It is widely used within the industry as currency. Developers are paid in Ether, so they have a vested interest in making the system as strong as possible.
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