Vitalik Buterin, who was a software developer who worked with the bitcoin network, came up with the idea for the Ethereum network in 2013. He aimed for it to offer users more functionality when compared to bitcoin.
The ICO for the Ethereum network ran in July and August 2014. After just a year, on July 30, 2015, the network went live.
Open and Decentralized
Just like the OG bitcoin, Ethereum network is based on the blockchain technology and is open and decentralized, meaning that there is no single entity that processes transaction or makes decisions about what happens on the network. The network was developed by the Swiss organization called Ethereum Switzerland GmbH and a Swill non-profit called the Ethereum Foundation.
The Network can Execute Smart Contracts
One of the biggest differences between the Ethereum network and other blockchain-based networks is Ethereum’s ability to run and execute smart contracts.
Smart contracts are a way of using a cryptocurrency to create agreements between parties on blockchain networks. Smart contracts do not add capabilities to regular contracts. Rather, they enable parties to create contracts in a way that does not require a lot of use or presence of a third party.
This means that two or more parties involved in the transaction do not know each other or do not trust each other to create a contract on the Ethereum network and the network will execute the contract as created, in a way that does not provide either party with a chance to deceive the other party.
When the parties enter the agreement on a blockchain network, the network will execute the agreement regardless of how the parties feel about it after entering into it.
Previously, many of the contracts that people and organizations needed to make needed to have certain supervision of a judge or a lawyer. This usually consumes much time, as well as expensive and complicated regardless of what takes place in the private or public sector.
Smart Contract DAOs
Smart contracts on the Ethereum networks use Distributed Autonomous Organization (DAO), also referred to as Decentralized Autonomous Corporations (DACs). Similar to Ethereum itself, DAO is open-source and decentralized, meaning it isn’t owned by any person, entity, or country.
DAO is an autonomous organization on the Ethereum network that sports no traditional structure, no board of directors, and no chief executive officer.
Additionally, just like the Ethereum network, the DAO came to birth via a crowdfunding campaign that was the biggest crowdfunding event in the history of crowdfunding.
Smaller Fees and Expenses
Since Ethereum network runs smart contracts on the DAO, the network gets rid of the need for third party supervision by performing all functions associated with a contract automatically.
Basically, let’s say, you can create an organization on the Ethereum network that hires people to complete some tasks. You can create some contracts on the network that will guarantee that the employees will get paid.
Usually, an organization would need an office, a paid intermediary between the organization and the workers. With the Ethereum network, the structure of the contract and the way it works will guarantee that it will go through.