What Is Ethereum?

Ethereum is often described as “the world computer.” But what does that mean? Let’s start with a computer science–focused description, and then try to decipher that with a more practical analysis of Ethereum’s capabilities and characteristics, while comparing it to Bitcoin and other decentralized information exchange platforms (or “blockchains” for short).

From a computer science perspective, Ethereum is a deterministic but practically unbounded state machine, consisting of a globally accessible singleton state and a virtual machine that applies changes to that state.

From a more practical perspective, Ethereum is an open source, globally decentralized computing infrastructure that executes programs called smart contracts. It uses a blockchain to synchronize and store the system’s state changes, along with a cryptocurrency called ether to meter and constrain execution resource costs.

The Ethereum platform enables developers to build powerful decentralized applications with built-in economic functions. While providing high availability, auditability, transparency, and neutrality, it also reduces or eliminates censorship and reduces certain counterparty risks.