What is a Blockchain?

Ethereum is a blockchain that is free to download, and has the ability to be programmed, similar to a
computer. Therefore, computer applications can be built on top of it. These computer programs run
across all the computers that are nodes of the blockchain. These applications are called decentralized
applications (or DApps - sometimes stylized as dApps) given that they run on all the computers that are
part of the Ethereum blockchain, as opposed to on a single machine.

Ethereum was created and conceptualized by Vitalik Buterin. Ethereum runs smart contracts. Smart
contracts are pieces of code that allow the Ethereum blockchain to immediately transport or move data.
Smart Contracts are the instructions of how and when data should move. Combined with the other
aspects of the blockchain, these instructions become useful because no central authority is required to
approve the instructions. Once they are put on the blockchain, they can not be altered. This makes
them censorship resistant.

The Ethereum ecosystem is growing rapidly. New and existing institutions are creating DApps, tools,
conferences, forums, meetups, and companies, all to support and accelerate the adoption of this new
technology. The Ethereum Foundation supports the further development and research into Ethereum,
and retains the role of building out improvements to the software, as well as developing protocols.
Some enterprises have further supported the adoption of Ethereum by creating the Enterprise
Ethereum Alliance, a non-profit to connect Fortune 500 companies, start-ups, academics, and
Ethereum subject experts, in order to lead to Ethereum’s further adoption.

Decentralized products and solutions built on Ethereum have already hit market. Companies are finding
ways to prevent identity theft, improve crowdfunding, pay musicians more fairly for their work, track food
from farms to grocery stores, and many other use cases.

While Ethereum use cases are plenty, this technology promises something larger than just a few
thousand applications. The blockchain, specifically the Ethereum blockchain provides a set of
instructions for creating digital representation of everything from physical objects to ideas. This is called
Tokenization. Tokenization allows for the distribution of tokens—representations of value or the
permission to do some actions within an application. For example, a token could represent an
opportunity to play a video game or download a song. Tokenizing an application is done on top of the
Ethereum blockchain, giving creators of DApps new ways to do business on an open source system.

For example, creators of these blockchain-based applications can fund the building of their projects
through selling tokens. Selling a token creates a new mechanism for fundraising. Another interesting
property that can be given to tokens is to allow token holders to interact with the applications
themselves via a token. Think of a token as a key that grants access to a user to participate in the
system in a specific way. For example, a token might represent access to read a certain number of
written articles on a news website. The founders of the network keep a percentage of the tokens for
themselves and if the network gains popularity, demand for the tokens rise while supply remains
constant, making the price of the tokens increase. Founders can now monetize the networks they build
by tokenizing their system and increasing the value of the system to the users. We are actually already
familiar with a token. Ether (ETH) is the token for Ethereum. Ether allows a user to pay for transactions
on the Ethereum blockchain. This is the special feature that Ether gives the holders