Ethereum is a public, open source, and decentralized platform that runs smart contracts. The network is decentralized and distributed, which means that anyone can run the Ethereum node and become part of the consensus network by verifying transactions on the network and adding new transactions.
Ethereum enables smart contract functionality to be implemented, and decentralized apps to be built on top of its network, utilizing a consensus algorithm. The consensus algorithm ensures that the protocol rules are being followed and guarantee that all transactions occur in a trustless way. This means that everyone can be connected via the blockchain and it removes the need for a middle man. Ethereum also allows simple ether transactions that are similar in effect to bitcoin transactions, however, with smart contracts you can add conditions and logic to the transactions.
Use Case Example
Smart contracts can be applied to areas such as in mortgages, bonds, payments and settlements, and insurance claims etc.