So far we have talked about Bitcoin as a cryptocurrency, but this “cryptomundo” has created a whole new class of assets. According to Chris Burniske and Jack Tatar, in their book Criptoactivos: the innovative investor's guide to Bitcoin and beyond, we can divide this class into 3 subclasses:

• Cryptocurrencies - have the 3 functions of a currency: serve as a means of exchange, as a store of value and as a unit of account. Although the physical representation of that currency often has no intrinsic value, that value is attributed to it by the confidence imposed by a government and a central bank. This is what allows paper notes to be used to buy goods and services, store value for the future and serve as a unit for valuing other goods or assets. As we have seen before, Bitcoin performs all 3 functions without having that trust imposed by someone, but by mathematics.
• Cryptocurrencies- commodities are the raw material that is used and transformed by the industry to create the final products that are then purchased by users. In an increasingly digital world, these too are being digitized and it makes sense to talk about digital goods such as computing capacity or bandwidth. Cryptocurrencies are digital goods made available by a chain of blocks.
• Cryptotokens - are the final consumer products that can exist in the form of multimedia, social networks, games or others that are also provided through a chain of blocks.

The most relevant of the cryptocurrencies is Ethereum - a global and decentralized computer on which globally accessible and incensurable applications can be built.

Created in 2013 by Vitalik Buterin, then only 19 years old, Ethereum is the materialization of a vision to create a chain of blocks that was more than just money. Buterin, realized that if he managed to mark an address in the Bitcoin block chain with more information than just the amount of bitcoin in that address, any type of information could be transacted, such as the possession of a good. In this case, sending these bitcoin would also mean the transaction of that asset, thus proving that any type of value could be transmitted through the Bitcoin block chain.

However, creating this Bitcoin-based system is no easy task. The system was not created with the flexibility to add identifiers for addresses and has limited capacity for creating different types of transactions. Satoshi created Bitcoin only with the aim of becoming a decentralized currency and preventing this multiplication of transactions allowed to increase the security and scalability - the ability to grow - of the network.

But for Buterin, this was not enough. He wanted a flexible system that would behave more like a computer and less like a calculator for quantities of bitcoins. In this new system it could go beyond the currency and create protocols for decentralized file storage, decentralized computing, decentralized predictive markets and many other applications.

The first way he used to differentiate himself from Bitcoin was to use a name without any “coin” - currency - with the double effect of dismissing the idea that it was just a currency. If the Bitcoin block chain is used primarily to exchange monetary value between people, the Ethereum block chain can be used to exchange information between programs. This is possible because a decentralized world computer was created with a Turing-complete programming language, that is, that can be used to calculate any sequence of well-defined logical rules, any software program.

This computer is called the Ethereum Virtual Machine (EVM) - the Ethereum virtual machine, which is simply a simulated, shared, global computer that can be used by more than one user at a time. Just like in the Bitcoin block chain everyone can see the transactions that were made, in the Ethereum block chain everyone can see what programs are being run.

These programs are known as smart contracts. The concept was developed in 1996 by Nick Szabo, but only Buterin and his team in 2013 were able to create a platform for executing smart contracts in a decentralized way that would get relevant attention. As mentioned, they are programs and not legal documents. We call them contracts because they have the ability to establish conditional transactions, that is, if there is a predetermined condition, this program will change the state of a variable in a block chain. Logically, “IF a condition is met, THEN an action is taken”.

All smart contracts start with a transaction. Someone makes a transaction that is then received by the smart contract. The transaction is the input to the program and what triggers it. This transaction and the contract code are executed on the virtual machine and verified by each of the nodes. If the transaction is validated by all nodes, it is then added to the next block in the Ethereum block chain. Because these nodes are a distributed network - the computers that are connected to the EVM - they are spread around the world and can be in the order of thousands, thus giving confidence to the network.

A good example for using smart contracts is insurance. In this industry, companies pay their customers if certain conditions are met. Taking the example of a canceled flight: IF the customer misses the flight, and IF the fault is with the airline THEN the airline has to pay the cost of the flight to the customer. Clearly, this is a simple example, but conditions can be increased to cover any type of contract, eliminating the need for an insurance company. The airline could have this contract in a block chain and the contract would be automatically activated if that condition were met.

As in Bitcoin, miners receive bitcoins for keeping the network running, also in Ethereum, there are miners who are rewarded in ether if they function as network nodes and keep it online. This ether is the native asset of the Ethereum network.

Ethereum has become a platform where various applications can be developed using the added value of the block chain - decentralization, immutability and transparency. These applications have such different purposes as: financial loans through the DAI cryptocurrency or a game in which you create and maintain collectable cat avatars - Cryptokitties - that have already been sold at auctions for amounts similar to $ 100,000.

Bitcoin appeared to suppress the need to create the currency that was not dependent on trust and became the first digital native asset. Ethereum has managed to take blockchain technology to the next level and expand the possibilities that this technology has to influence our world.