Ethereum is a decentralized platform that runs smart contracts using a crypto asset called Ether. Smart contracts are applications that run exactly as programmed without any possibility of downtime, censorship, fraud or third party interference. The project was crowdfunded during August 2014 by fans all around the world. It is developed by the Ethereum Foundation, a Swiss nonprofit, with contributions from great minds across the globe.
History
Ethereum was initially described in a white paper by Russian Canadian Vitalik Buterin, a programmer and writer involved with Bitcoin, in late 2013 with a goal of building decentralized applications. As opposed to other bitcoin inspired projects, Ethereum created its own blockchain to provide greater development flexibility by inclusion of a Turing complete programming language. Ethereum's live blockchain was launched on 30 July 2015.
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Ethereum system
On traditional server architectures, every application has to set up its own servers that run their own code in isolated silos, making sharing of data hard. If a single app is compromised or goes offline, many users and other apps are affected. On a blockchain, anyone can set up a node that replicates the necessary data for all nodes to reach an agreement and be compensated by users and app developers. This allows user data to remain private and apps to be decentralized like the Internet was supposed to work.
Ether
Ether is the cryptocurrency of the Ethereum Blockchain. It is a necessary element -- a fuel -- for operating the distributed application platform Ethereum. It is a form of payment made by the clients of the platform to the machines executing the requested operations. To put it another way, ether is the incentive ensuring that developers write quality applications (wasteful code costs more), and that the network remains healthy (people are compensated for their contributed resources).
For details see https://www.ethereum.org/ether
Wallet
To manage your Ether and Tokens comfortably, you need a special software application called Wallet. The Mist Wallet is an open source application developed by the Ethereum Foundation.
Smart contract
A contract is a collection of code (its functions) and data (its state) that resides at a specific address on the Ethereum blockchain. Contract accounts are able to pass messages between themselves as well as doing practically Turing complete computation.
Solidity, Serpent, LLL
Contracts live on the blockchain in a Ethereum-specific binary format called Ethereum Virtual Machine (EVM) bytecode. Contracts are typically written in some high level language such as Solidity and then compiled into bytecode to be uploaded on the blockchain. There are some high-level languages and compilers to generate this bytecode:
- Solidity has many resemblance with Javascript, but it is static typed and there are some special constructs.
- Serpent is a deviation from python
- LLL is a low-level, Lisp-like Language
Ethereum client