What is Ethereum? What are Smart Contracts?

Expanding blockchain to new realms

  • Ethereum: A dynamic blockchain for many different applications
  • Smart Contracts: automated executions placed upon the Ethereum blockchain

What is Ethereum?

Ethereum is a network and platform. It is decentralized, open-source (visible to all), and operates upon its own blockchain. All this combines to greatly enhance security, speed, and convenience (and cost) when performing data functions. These can be anything from financial applications to games to instant messaging. The fuel that runs these applications is a crypto asset native to the Ethereum network. This digital asset is called Ether. In addition, each specific application may employ its own specific digital asset with which it will operate. 

 

Both the lending funds and the savings accounts funds from our users are maintained on the Ethereum network. By being public and transparent, users can see where their funds reside on the network at anytime, from any online device. 

 

For a detailed look at the history and aspects of Ethereum, here is a thorough overview from CoinTelegraph.com.

What are smart contracts?

One of the most popular types of applications on the Ethereum network—known as "Dapps" for decentralized applications—is something called a "smart contract". A smart contract is set of instructions to be automatically executed on a blockchain network. When applied to our peer-to-peer lending, these instructions are the terms of the loan that the lender and borrower agree to: the amount, interest rate, duration, etc. 

 

The technical standard for smart contracts on the Ethereum network (and all tokens used) is called ERC-20. The ability to lend and trade by way of smart contracts is greatly aided by the used of stablecoins. Read more about ERC-20 and stablecoins in the article listed below.

 

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