I’ve been investing in Ethereum lately. It’s the second most popular cryptocurrency (after Bitcoin) with a market cap of over $20 billion. Three things make it particularly interesting:
First off, it has the most professional-looking websites and software of any other cryptocurrency that I’ve seen, as well as a visionary founder working full-time on the project.
Second, other cryptocurrencies can be created on top of Ethereum, ie. using the same network but with their own identity, supply, and rules. Although it’s not yet possible to replicate the functionality of all other existing cryptocurrencies this way, there’s a possibility that Ethereum will become the end-all and be-all blockchain.
Finally, Ethereum is much more than a cryptocurrency. It thinks of itself as a “decentralized platform that runs smart contracts.” That’s a mouthful. The way I think about it? The Ethereum network is made up of humans, like you and me, that can transact much like we can with Bitcoin or with dollars or whatever. It’s also made up of robots.
Anyone can create and deploy robots (or “bots”) onto the network. They are able to transact with all other members of the network, humans and bots. Their exact behavior is programmed at creation and can never be changed.
These bots are what’s called smart contracts. Their behavior can replicate that of banks, funds, markets, wills and many other things yet to be invented, all without the need for human arbiters.