What is Ethereum blockchain?
Ethereum is an open-source, decentralized blockchain platform that enables the creation and execution of smart contracts and decentralized applications popularly known as “dapps” in blockchain community. Invented by Vitalik Buterin in 2013, Ethereum has since grown to become the second-largest cryptocurrency by market capitalization after Bitcoin.
Difference between Ethereum and Bitcoin
One of the most significant differences between Ethereum and Bitcoin is that while Bitcoin was designed primarily as a digital currency, Ethereum was built as a platform for creating decentralized applications. This means that while Bitcoin transactions are limited to financial transactions, Ethereum allows for the creation of a wide variety of applications, from digital identity and voting systems to prediction markets and decentralized finance (DeFi) platforms.
Use of Ethereum in industry applications
In terms of real-world applications, Ethereum is being used in many industries, from gaming to finance. In finance, Ethereum smart contracts are used to tokenize assets, such as real estate and art, making them more easily bought and sold on a global market. In the gaming industry, Ethereum is used to create Non-Fungible Tokens (NFTs) which are unique digital assets that can be bought, sold, and traded like physical assets.
1. Decentralised applicatons (dapps) built on Ethereum
One of the most well-known examples of a decentralized application built on the Ethereum platform is CryptoKitties. This is a digital collectible game in which players can buy, sell, and breed unique digital cats. Each cat is represented as a unique digital asset, or “non-fungible token” (NFT), stored on the Ethereum blockchain. The game quickly gained popularity in late 2017, with some of the rarest cats selling for over $100,000.
2. Decentralised Finance (DeFi) based on Ethereum
Another example is the use of Ethereum in Decentralized Finance (DeFi) platforms, which allow for peer-to-peer lending and borrowing of digital assets without the need for intermediaries like banks. These platforms are built on smart contracts, which are self-executing contracts with the terms of the agreement written into lines of code. One such platform is MakerDAO, which allows users to borrow digital assets such as the stablecoin DAI, using Ethereum as collateral.
3. Predictive Markets based on Ethereum
Ethereum-based prediction markets are also gaining popularity, such as the platform Augur, which allows users to create markets for the prediction of future events, such as the outcome of an election or the price of a stock. These markets are powered by smart contracts, which automatically pay out to users who correctly predict the outcome of an event.
4. Digital Identity Management based on Ethereum
Ethereum is also being used in the area of digital identity management. The platform uPort, for example, allows users to create a self-sovereign digital identity, which they can then use to securely access a wide range of online services, such as voting in online elections or accessing their medical records.
5. Supply Chain Management based on Ethereum
The platform VeChain, for example, allows companies to track the movement of goods and services through the supply chain, with the goal of increasing transparency and reducing the risk of fraud. By creating a tamper-proof record of the movement of goods on the blockchain, companies can ensure that their products are authentic and have been produced in an environmentally and socially responsible way.
Ethereum is a powerful decentralized platform with a wide range of possible applications
In conclusion, from digital collectibles and prediction markets to DeFi platforms and digital identity management, Ethereum is enabling the creation of new types of decentralized applications that are changing the way we interact with the digital world. As the technology continues to evolve and more developers continue to build on the Ethereum platform, it’s likely that we will see even more groundbreaking use cases in the future.
