Ethereum is a blockchain application platform leveraging smart contracts. Smart Contracts are computer encoded processes, terms, and conditions that will reliably and blindly execute as programmed. Users of smart contracts no longer have to trust that terms and conditions will be followed, as the rules embedded in a smart contract are essentially etched in stone.
The native digital currency on the network is Ether (ETH). Acting as a “fuel” or “gas”, users and applications require ETH to run their code. For example, when you finish creating your new application you have to pay the network to get is published live on the chain. Each action you take when dealing with the live blockchain, requires a small amount of “gas” based on the computations power required and how long it takes to run.
Among the decentralized smart contract platforms, Ethereum is the largest, most mature, with a proven record of secure operation. The growing developer community, building on top of the Ethereum platform, has created a vibrant ecosystem of second layer protocols and projects.
Launching in 2014 by a non-profit foundation, Ethereum has led the sector of decentralized applications. Vitalik Buterin, the main founder, believed there was a need in the marketplace for a protocol allowing additional functionality and the ability to act as a platform for other application — The “World Computer”. Instead of running all programs and apps on someone else’s server, you replace it with an Ethereum node. The node is unable to censor the information because it split between every other node in the entire network in a shared ledger, like Bitcoin.
When dealing with sophisticated and larger applications, scalability in a secure blockchain environment is a pressing topic. There are multiple proposed and under development scalability solutions being spearheaded by the Ethereum Foundation (i.e. Casper Proof of Stake). Many of these solutions are planned for fruition sometime in 2018.