Understand Ethereum, the cousin virtual Bitcoin

In recent years, crypto-currencies have developed strongly. The Bitcoin is the virtual currency the most traded in the world. In addition, it has a lot of cousins and competitors. None became more popular than Ethereum, a global computer network with its own virtual currency, called Ether.

This technology works according to the rules defined by the technology of Ethereum. These rules are used to program the network Ethereum to perform certain types of computing tasks. Each computer on the network performs these tasks to ensure that it is properly executed. In general, the tasks involve money. Vitalik Buterin, creator of Ethereum, has been compared to a smartphone world that can be programmed to operate according to the applications built. These applications are called dApps, because they are managed by a decentralized network.

Ethereum is not a virtual currency ?

The network Ethereum has its own virtual currency, called Ether. In the simplest sense, Ether is needed to pay for the other computers on the network in order to accomplish the tasks. The use of the network is paid for.

People can also buy and hold the Ether. They expect that these virtual currencies will appreciate in value. In effect, they need to be able to use the network and pay for it services.

The usefulness of such a network

Let’s say that two companies want to make a financial transaction complicated, such as the settlement of a stock option. None of the two companies does not trust the other to perform the operation on their computers. The two companies could use another company, such as a brokerage company on the stock exchange, to carry out the transaction. This is a very common practice today.

However, this requires them to trust that third company, and to pay an additional fee. With Ethereum, they can perform the transaction on a shared computer that allows them to check the records. A solution much more economical.