Ethereum

Ethereum is a decentralized computing platform, meaning that it works independently without requiring any validation from an external third party. Many platform requires external third-party validation that provides “social proof” that we are not only relevant but also experts in what we claim to do for our target markets, proving their credibility.

Smart contracts

Ethereum runs smart contracts: applications that run exactly as programmed without any possibility of downtime, censorship, fraud or third-party interference. The aim of smart contracts is to provide security that is superior to traditional contract law and to reduce other transaction costs associated with contracting. Various cryptocurrencies have implemented types of smart contracts. Ethereum generates a cryptocurrency token known as Ether.

Why does Ethereum not need third party validation?

These apps run on a custom built blockchain, an enormously powerful shared global infrastructure that can move value around and represent the ownership of property. Blockchain is a growing list of records, called blocks, which are linked using cryptography. Each block contains a cryptographic hash of the previous bloc, a timestamp, and transaction data. This cause the blockchain to be resistant to modification of data and hence does not need validation from external third party. Blockchain itself is a decentralized platform, blockchain is nothing but a linked list distributed using peer to peer network technology.

This enables developers to create markets, store registries of debts or promises, move funds in accordance with instructions given long in the past (like a will or a futures contract) and many other things that have not been invented yet, all without a middleman or counterparty risk.