The Observer found out that:
When Satoshi Nakamoto invented Bitcoin in 2009, he actually created two other things: blockchain, a decentralized protocol that supports the Bitcoin transaction, and what Joseph Lubin, a co-founder of Ethereum, called "blockchain economics".
Bitcoin is essentially a Bitcoin blockchain-based program, which only supports Bitcoin through its own restricted protocol.
Developers in the crypto space have started to imagine developing a wider protocol around three years after the advent of Bitcoin, realizing the potential of blockchain technology for more applications than a simple currency.
In 2013, a 19-year-old programmer, Vitalik Buterin, proposed the idea of the Ethereum protocol.
“Ethereum is a much more expressive and much more powerful blockchain system. He (Buterin) described the system as more scalable in a human sense, ”Lubin, a Canadian entrepreneur who became Buterin's business partner, said at the SXSW Conference on Friday in Austin, Texas.
Put simply, the separation of the blockchain layer (protocol) from the applications built on it was the most revolutionary thing Buterin did with ETH. This new framework enables software developers to build any application on the ETH blockchain that fits their particular needs.
“It's a new way to design and deploy applications. Instead of a client-server architecture, where you have a company, such as Google or Facebook, that owns a group of servers to provide services, this new application paradigm has all the different nodes on the Ethereum network. They are all effectively the backend for your application. Hence, no one controls it excessively. “Lubin explained.
By market value, the Ethereum token is actually the world's second-largest cryptocurrency. Nevertheless, Ethereum was never developed as a new form of currency.
As Chris Castiglione, an adjunct professor at Columbia University who teaches a digital literacy course explained to Observer: “Bitcoin is competing with existing money to replace them with a truly digital currency. Ethereum is a “token”. What Bitcoin does for money, Ethereum does for everything else. "
For instance, in January, Kodak launched an image rights platform called KodakOne based on the Ethereum blockchain. Ujo Music, an Ethereum-based music rights marketplace, is a related site.
On these platforms, users can upload and sell their work with a customized user policy through a “live document” system called open law, a part of the Ethereum infrastructure. Users can sell licensing and other rights to members on the same platform and be paid in the form of digital tokens.
"Unlike the traditional music industry, where there are many people with legal degrees playing intermediate roles and extracting a huge amount of money from the ecosystem, this new blockchain architecture allows content creators to access their fans more directly, " Lubin said.
The Ethereum blockchain is also the choice of 70% of companies issuing ICOs, according to a recent study by consulting firm EY. Companies create digital tokens on top of the Ethereum blockchain and sell to investors like stocks, except these tokens are non-tradable on public markets and are not regulated by governments, which has created its own share of problems.