It facilitates the transfer of its cryptocurrency, can support decentralised applications, and runs smart contracts.
Smart contracts run on its blockchain and are the building blocks for ambitious projects, including games like CryptoKitties.
To see what lies ahead for Ethereum, MyBroadband spoke to Ethereum developer Nick Johnson about the implications of decentralised organisations.
Johnson is a software engineer on the go-ethereum development team and the cofounder of the Ethereum Name Service (ENS).
ENS maps .eth domains to Ethereum addresses, allowing users to advertise their public key using “normal” language instead of a hexadecimal hash.
Johnson spends most of his time working on this project, but continues to contribute to the core development of Ethereum.
The improvements Johnson is most excited to see implemented on Ethereum include proof-of-stake and scaling solutions.
“It’s a toss-up between the first stages of Casper, which will mark the deployment of the first robustly specified PoS system in a large-scale blockchain, and practical implementations of Plasma, which will enable huge improvements in scalability for Ethereum-based applications,” said Johnson.
Ethereum also allows for the creation of decentralised organisations, which can be run autonomously or be controlled by a governance system.
This means entire businesses can be implemented on the blockchain, with employees sharing equal governance of the organisation and having access to a transparent financial record.
Johnson believes the number of projects focusing on decentralised organisations will increase going forward.
“Projects like Aragon and Colony pave the way for creating new types of decentralised organisations, and I think we’ll start to see these manifest in 2018.”
Aragon is a project built on Ethereum which aims to be the first community-governed decentralised organisation.
The organisation will act as a digital jurisdiction, with users able to set up decentralised businesses and conduct a variety of tasks.
Colony functions similarly to Aragon, and provides an ecosystem for the development of decentralised organisations.
Within its network, users can contribute to “colonies” – which can be defined by their creators as companies, non-profits, or community projects.
Each colony will have its own token and users will own a stake in the colony depending on how many tokens they hold relative to total contributors.
Johnson said the models of how a decentralised business operates will adapt as developers experiment with different concepts.
“Using Aragon, you can build a distributed organisation very similar to a traditional company, with shareholders, voting rights, bylaws, and so forth,” said Johnson.
“With Colony, you can form an association of like-minded individuals with the collective power to take on joint projects.”
The idea of decentralised organisations and businesses is interesting on paper, but their real-world applications are more difficult to imagine.
A decentralised business model could fundamentally change the way in which employment and skill-building functions.
Johnson said he is interested in seeing how these organisations govern themselves and acquire talent.
“I’m particularly excited in seeing how these new sorts of organisations will facilitate bringing together people with complementary skills to work on individual projects, without the need for a central manager to hire and organise everyone,” said Johnson.
“I’m also keen to see how these sort of organisations work out as a way to manage governance of blockchain resources.”
The field of blockchain engineering and the development of applications like Aragon and Colony has grown quickly, with most developers only becoming involved very recently.
Johnson became involved with Ethereum just over 18 months ago, and was shortly thereafter offered a role on the go-ethereum team.