Cryptocurrency is a digital or virtual currency that is secured by Cryptography, which makes it almost impossible to counterfeit or double spend. A lot of cryptocurrencies are decentralized networks based on blockchain technology, that is, a distributed ledger that is enforced by a disparate network of computers.
A key feature of cryptocurrencies is that they are generally not issued by any Central or official authority, rendering them immune to government interference or manipulation.
Bitcoin may be the leading of the pack in terms of the crypto race at the moment. However, Ethereum is running right behind. Software platform that issues the second largest cryptocurrency in the world, Ethereum aims to create a decentralized version of the internet.
A blockchain-based software platform like Ethereum hosts a decentralized app store and payment system on its network. The users of Ethereum can build distributed applications without any regulation or censorship and utilise smart contracts to conduct safe as well as reliable transactions with each other.
People often mistake Ethereum to be a cryptocurrency but it is actually much more than that. It is a distributed, public blockchain network with smart contracts scripting functionality.
Although it is not a true cryptocurrency, it is powered by one. Ether is that cryptocurrency. Unlike Bitcoin which was designed specifically to be a currency unit, Ether was designed to power the Ethereum network by compensating miners for performing computation.
Ethereum is a relatively young platform. It was released in the year 2015 and has been operating for a few years. Even though it is a young platform it has seen tremendous growth during that time. In the year 2017 alone, the Ether currency grew by over 15,000%
Ethereum uses blockchain technology to replace centralised computing systems with decentralized computing systems that store people’s data. Some of the common examples of centralised computing systems are Google and Apple, which regulate the types of apps in the app stores. Amazon is another example of a centralised computing system that stores your credit card information and other personal details.
Computing systems have a single point of failure that cybercriminals can easily hack into them. For example, on Amazon, the sensitive information you store on the website is also stored on their servers. In case a cybercriminal hacks into the servers of Amazon, they could steal your credit card number.
Evolution blockchain technology to create a decentralized app store, it gives all the power back to its users. Therefore the users are the only ones who can modify their apps and access their own personal information. The App Store cannot impose any regulations on them and the companies cannot store their personal information.
Another way Ethereum leverages blockchain technology is by validating and securing all the transactions made in its cryptocurrency Ether with the use of smart contracts.
Smart Contracts then automatically perform the transactions and other actions that are agreed upon by both parties, hence the users can conduct safe and reliable transactions with each other. This prevents any party from going back on the contract terms.