I read a ton online about blockchain and cryptocurrencies all the time, and over the past several months feel that I've built up a fairly solid knowledge base on which to assess opportunities in the space. But, as I do not have a computer programming background (I'm a tax lawyer), there are often technical things I come across that are a struggle to grasp at first blush.

This was the case when I first started trying to understand just what the heck Ethereum is, and why it stands out from Bitcoin as something more than just a digital currency. You can find a LOT of content online about the Ethereum project, and YouTube videos, etc., but most of it was made by techies for techies. We don't all speak the language.

However, I just came across a post on Reddit by u/Mirrory that is probably the best and most succinct description of Ethereum I've seen written specifically for non-technical folks. It's still somewhat technical -- and has to be since, after all, we're talking about a new, revolutionary technology. But it's a great starting point for anyone wanting to understand some of the main innovations at the core of Ethereum. Here it is:

As high level and as layman like as I can make it:

You are buying "work units" in a massive super computer and cloud network spanning the entire globe. ETH, although it can be exchanged for currency or used as currency, is actually used to incentivize nodes on the [Ethereum] network to process information and data for you. This is called gas, paid in fractions of an ETH 'coin' (like 0.00000010 ETH). This is unlike with bitcoin, which is intended to be used purely for financial transactions. Ethereum can do that too, but it can also say, run javascript-like code on a webpage - or host static content like image files. Now instead of paying Amazon or Google Cloud Services hundreds of dollars per month in hosting a virtual machine (basically a server within a server), you can host entire websites for PENNIES per month, or even a one time cost of just a few cents! Storing or changing the data costs money, but it's a one time cost. Retrieving the data is free. This is where smart contracts come in. If you need to store "memory" on the blockchain, contracts do that. It only costs money to write in or change that data - or to do something with that data. Not to retrieve it. So say if you host an image on the Ethereum blockchain through the SWARM protocol, users can retrieve that data by pointing to it's hash. Really the website administrator would do this, and you'd have no idea. You'd load images from the Ethereum network in your browser without realizing it. It looks/acts/behaves like a normal website, but underneath is a series of extremely complicated mathematics (aptly called mathemagic) that make the most widely used encryption today look like crayon drawings.

Now say if your code used memory, like having a number field in the web page and then displaying double that number, you would have to send data to that smart contract and it would store the data in memory, then do work with it and finally output the result. The parts that cost gas are the storing and doing. Now say if the user wants to recall the calculation they made a minute ago, or submits the exact same number as before. They can do this without needing to resubmit to the contract, all history is stored within the blockchain. That previous transaction will be recorded there forever. So as more things are done on the blockchain, the more efficient computing becomes. You only have to calculate or do the thing once. And never have to waste precious CPU time again. You can simply recall that previous transaction. Never before with computing has something like this even been possible, and for us tech guys the concept is just mind blowing. It has so many applications and will completely disrupt and overthrow big cloud providers today. We're talking slashing IT operating costs by 90%. In the applications I have developed for it, I was able to make websites that would normally cost $120 a month to host down to just a single one time cost of $0.12 to host static content and $7 a month for the rest. It's like watching the rise of the internet all over again for those 'in the know'.

Next time you buy Ethereum, or sell it - remember what you're actually trading. Bitcoin ain't got nothing on what Ethereum is about to become. And all those people who are just buying it for investment just don't know what the hell they're sitting on top of. If bitcoin is digital gold, Ethereum is digital black-gold. And you just accumulated it before the next industrial revolution.

Source: https://www.reddit.com/r/ethtrader/comments/7ggsfu/if_and_that_is_an_if_we_are_entering_a_correction/dqjbuju/