Ethereum is an open source software platform that focuses on dynamic and decentralised computing. The proprietary cryptocurrency that uses this system is called Ether (ETH). Website of the Ethereum Foundation Ethereum.org Website
Ethereum is based on a so-called blockchain and thus on the same technical foundation as Bitcoin. However, Ethereum is not a pure cryptocurrency, but serves as a decentralised ecosystem for blockchain projects of all kinds with extended functions such as smart contracts. Therefore, Ethereum can also be described as an open protocol or construction kit for decentralised applications.
The great advantage of Ethereum is its programmability, which sets it apart from Bitcoin, Litecoin and many simple representatives. Ethereum is therefore also known as "cryptocurrency 2.0", although Ethereum is much more than just a cryptocurrency. The possibility of organising Initial Coin Offerings (ICOs) for crowd-funding projects, programming a wide variety of decentralised applications (dApps) and setting up smart contracts on the basis of Ethereum is what makes the technology so special.
Due to its programmability, Ethereum offers a particularly large number of possible uses and applications. With the help of ICOs, dApps, smart contracts and DeFi, the options range from raising capital to simple everyday applications and games to projects that aim to revolutionise the financial industry and bring an entire industry into the digital age with the help of blockchain technology.
Especially in the early days after its release in mid-2015, Ethereum was used for Initial Coin Offerings (ICOs) and a veritable gold-rush atmosphere arose among investors and tech-savvy users. But what is an Initial Coin Offering? It is a type of crowdfunding in which companies or projects raise capital from many individuals to finance their company or project. An ICO is thus strongly reminiscent of an Initial Public Offering (IPO) or a classic IPO. In return for the investment in an initial coin offering, however, there are no shares, but coins or tokens - which is why an ICO is often also referred to as a "token sale".
Decentralised Applications, or dApps for short, are also a component of Ethereum. As the name suggests, dApps are programmes that are not executed on a central server, but are distributed decentrally throughout the network - and that is what makes Ethereum special. Due to the decentralised architecture, these programmes are resistant to censorship and thus cannot be switched off.
The possible uses of dApps are huge and since Ethereum and other crypto projects are comparatively young technologies, the possibilities are hard to imagine at the moment. In the first few years after the development of Ethereum as a programmable platform for decentralised apps, plenty of dApps have already been created, including simple games and serious applications from the fields of health, social affairs and finance.
Many projects based on Ethereum deal with the topic of Decentralised Finance (DeFi) and thus aim to revolutionise the financial industry. DeFi stands for services in the financial sector that run completely decentralised and without a middleman. Taking out loans, for example, can be made possible for everyone. Decentralised Finance projects are: digital, decentralised, open source and based on a blockchain