We detail what Etherium is, how this technology works, what it is capable of and why Microsoft invests in it.

What is Ethereum and how is it related to Bitcoin?

As is known, Bitcoin was created in 2008 by Satoshi Nakamoto. An interesting fact: no one owns bitcoin as an intellectual property. This is a decentralized technology that exists online. There is no owner, no director, no one. There are only developers and teams around the world who work to support and increase the use of this technology on.

Ethereum was created in 2015 by a Russian-Canadian – Vitaly Butyrin. This person also was at the forefront of the magazine “Bitcoin” and in general was closely connected with the cryptocurrencies. Vitaly saw an opportunity to expand, improve Bitcoin’s technology and turn it into an Ethereum.

Ethereum is a universal open source blockchain platform, where everyone can generate

Answering the question what Etherium is Is a universal open source blockbuster platform the next generation application for their own needs. That is, it’s a sandbox where you can build sandcastles of any size and shape. Bitcoin and Ethereum differ in purpose and capabilities. Bitcoin offers only an online transaction system between individuals. A blockchain of Etherium provides work for any application that developers create.

Instead of mining bitcoins, there is ether (ETH) mined in the Ethereum blockchain. This is a kind of fuel on which smart contracts work. It is also used to pay for services and commissions for transactions in Ethereum.

Full automation in Ethereum

automation in EthereumSmart contract is a computer code that is embedded into a cryptocurrency network with a blockchain. It helps to exchange money and other assets ​​and automates the entire process – from payment to contract’s promises performance. Smart contracts execute the code the way the creator wrote it. This is the basis of the Ethereum.

In Ethereum blockchain, thanks to smart contracts, developers can create the operation for themselves, which they need at the moment. Contracts do not require intervention and work in Ethereum completely autonomously having domino effect: some actions trigger that entail the others. You can create not one contract, but several and merge them – so the DAO appears.

What is DAO in Ethereum?

DAO in Ethereum

DAO (data access object) is an “organization” that functions thanks to smart contracts in Ethereum without the anyone’s intervention. “Shareholders” of DAO are owners of tokens. In fact, the DAO is a fund in which its members invest. DAO is created using unchanged code (this can be a disadvantage if the programmer makes a mistake). DAO does not have days off unlike real organizations it works without downtime and without errors (depends on the developer), until we stop covering the costs for it.

Investors in DAO get the right to choose how to manage the fund’s resources. In voting (the choice of goals for implementation), DAO-tokens are used. The goal can be anything from charity to investment.

ETH is used as a currency for a contribution to the DAO and can be converted to a DAO token.

In short, you put ether (ETH) in DAO, it is converted to the DAO token that you use to determine the DAO goals. When making a profit, the process is reversed.

The future is Ethereum?

Some facts:

  • Microsoft uses the source code of the Ethereum to create its own platform called Bletchley on its basis.
  • IBM and Acronis show their interest in technology.
  • Fund “Skolkovo” wants to introduce Ethereum into the public sector.
  • The total capitalization of Ethereum is more than $ 100 billion (the world’s second cryptocurrency by this indicator)

As a minimum, this indicates that the major players in the market are ready to invest and use this technology.

All this is due to open source, transparency of transactions and reliability of the technology (human errors are not taken into account).

Vladislav Martynov


Vladislav Martynov, member of advisory board of Ethereum: “In the western world it is becoming a revolutionary trend as the advent of the Internet”.


Almost exactly a year ago there was a Bitcoin crash and at the same time the ascent of Ethereum was seen. This can be clearly seen in the dominance index: Bitcoin is less than 40%, Ethereum is more than 30%.Bitcoin is lessUnfortunately, so far there are few places where you can buy something for Ether. Exceptions are the online store overstock.com, which cooperates with the ShapeShift exchange and Amazon. Here we need to clarify: directly Amazon does not accept Ether, but you can buy the goods on MyEtherShop.co, where all the positions correspond to the prices on Amazon. Then the store buys the goods and passes them it to you.

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