Ethereum pioneered the concept of a blockchain smart contract platform. Smart contracts are computer programs that automatically execute the actions required to fulfill an agreement between multiple parties on the internet. They are designed to reduce the need for trusted intermediaries between contracting parties, thereby reducing transaction costs and also increasing transaction reliability.
Ethereum’s main innovation was to design a platform that would allow smart contracts to be executed using the blockchain, which further reinforces the existing benefits of smart contract technology. The Ethereum blockchain was designed, according to co-founder Gavin Wood, as a kind of “one computer for the entire planet,” theoretically capable of making any program more robust, censorship-resistant, and less prone to fraud by running it on a globally distributed network of public nodes.
In addition to smart contracts, the Ethereum blockchain is capable of hosting other cryptocurrencies, called “tokens,” through the use of its compatibility standard. In fact, this has been the most common use case for the ETH platform so far: to date, over 280,000 ERC-20-compatible tokens have been launched. Over 40 of these are among the top 100 cryptocurrencies by market capitalization, for example, , and . Since the emergence of gaming, there has been a substantial increase in interest in .
