One question that a substantial portion of people asked when Ethereum was launched was “Why to develop Ethereum when we already had Bitcoin for the transfer of payments?”
Well, Blockchain is a powerful technology and it is true that we haven’t fully utilized it to its potential. Bitcoin only makes use of one of the many possible applications of the Blockchain technology i.e. peer-to-peer transfer of funds.
Ethereum is a platform based on the Blockchain technology used for developing decentralized applications. It has a few benefits over Bitcoin such as the feature of coding Smart Contracts and the Ethereum Virtual Machine.
What is a Smart Contract?
Simply put, Smart Contracts are a digitized version of a traditional contract. They are computer programs which run on the Blockchain database and can be programmed to self-execute when the conditions written in their source code are met. Smart Contracts are trusted by the users as once programmed, the terms of the contract cannot be changed thus making the contract immutable.