Ethereum (ETH) appeared in 2015 and is not just a digital currency, but also an open-source Blockchain platform with a programmable trading feature. The Blockchain technology is the main difference of Ethereum from Bitcoin. Ethereum's Blockchain gives us the ability to develop different, independent applications that run through its network. These services may be of different kinds:
• Creating a new system of digital payments
• A new digital currency
• Marketplace development with cryptocurrency trading
In the Ethereum network, applications are called smart contracts, that is algorithms, which monitor whether the various terms are met (for example terms relating to agreements) and whether further acts are included in the rationale of contracts. For each application, the creator will have to pay a fee to the currency network, Ether. In other words, Ethereum is a global computing engine, which consists of the tens of thousands of computers connected to the network to seal transactions and their resources run the applications we create.
The appearance of smart contracts has triggered the explosion of ICOs (Initial Coin Offering - the initial sale of a cryptocurrency before its release). This mechanism resembles crowdfunding ("popular funding"), which allows various projects to attract money, bypassing the exhaustive processes of presentations, talks and agreements, as is the case with classic investors. The ICO name corresponds to IPO (Initial Public Offering), which is the process when a company enters the stock market and holds shares for public purchase. So, many startup companies want to build their projects on the Ethereum network, looking for investors through the Initial Coin Offering process.
