Ethereum (ETH) Profile

Ethereum Token Profile (PDF)

Ethereum is an open source network of computers that enables the creation of smart contracts. Smart contracts are transfers of value contingent upon verifiable events and executed automatically by the network. Many businesses depend on both trust and reputation when transacting with unfamiliar parties, as the enforcement of real-world contracts can be both costly and lengthy. The logic behind many of these business processes, however, is very simple. It can often be represented by the statement, “If X (event) happens, transfer Y (amount) of tokens to Z (recipient).” Ethereum enables this statement to be converted to computer code as a smart contract, which is then stored on the Ethereum blockchain. Once deployed, all smart contracts that sit on the Ethereum blockchain are automatically executed by the Ethereum Virtual Machine (EVM), a group of computers responsible for executing smart contracts based on verifiable events. Since execution requires computing power, mining in the context of Ethereum means not only confirming and validating peer-to-peer transactions, but also executing the code that represents the smart contracts. Recently, Ethereum has become a platform for the creation of digital tokens that leverage the Ethereum Blockchain and EVM. This was made possible after the creation of the ERC20 standard, a set of rules that facilitate the creation of Ethereum-based tokens, commonly referred to as “ERC20 Tokens.”