A co-founder of Ethereum — the second most-traded cryptocurrency behind bitcoin — told a crowd at South By Southwest on Friday that the technology behind the virtual coins has the potential to drive growth in industries ranging from shipping and health care to entertainment by cutting out value-draining middlemen. “The beauty of this is that it shrinks the role, the dominance and the monetization, of the intermediary,” said Joseph Lubin, a Canadian entrepreneur who also started ConsenSys, a company that builds applications for Ethereum.
At its core, Ethereum is an open-source software platform that harnesses far-flung computers to perform complex tasks, such as financial transactions, and record the results. The system is based on so-called “blockchain” technology, in which every transaction or computation on the decentralized network is replicated automatically and shared across it — resulting in what’s known as a distributed ledger that’s verifiable to everyone and permanent.
Individual tokens on the Ethereum platform are called ether, and they’re used to pay for computing power on it. Similar to bitcoin, however, some people also buy and sell ether as speculative investments.
Lubin said Ethereum, created in 2014, has the potential to be deployed across many different sectors because its technology is programmable. Both ether and bitcoin are based on blockchains, but bitcoin has a more singular focus as a decentralized digital currency.
Ethereum “is a general platform for decentralized applications,” Lubin said.
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