Like Bitcoin, the Ethereum system is built on a blockchain in which every transaction is recorded publicly. The promise of such a system is that it allows the exchange of money and assets more quickly and more cheaply than relying on a long chain of middlemen.

But Ethereum has also won fans with its promise to do much more than Bitcoin. In addition to the virtual currency, the software provides a way to create online markets and programmable transactions known as smart contracts.

The system is complicated enough that even people who know it well have trouble describing it in plain English. But one application in development would let farmers put their produce up for sale directly to consumers and take payment directly from consumers. There are dozens of functioning applications built on Ethereum, enabling new ways to manage and pay for electricity, sports bets and even Ponzi schemes.

All of this work is still very early. The first full public version of the Ethereum software was recently released, and the system could face some of the same technical and legal problems that have tarnished Bitcoin.

Many Bitcoin advocates say Ethereum will face more security problems than Bitcoin because of the greater complexity of the software. Thus far, Ethereum has faced much less testing, and many fewer attacks, than Bitcoin. The novel design of Ethereum may also invite intense scrutiny by authorities given that potentially fraudulent contracts, like the Ponzi schemes, can be written directly into the Ethereum system.

But the sophisticated capabilities of the system have made it fascinating to some executives in corporate America. IBM said last year that it was experimenting with Ethereum as a way to control real world objects in the Internet of things.

Microsoft has been working on several projects that make it easier to use Ethereum on its computing cloud, Azure.

"Ethereum is a general platform where you can solve problems in many industries using a fairly elegant solution -- the most elegant solution we have seen to date," said Marley Gray, a director of business development and strategy at Microsoft.


Gray is responsible for Microsoft's work with blockchains, the database concept that Bitcoin introduced. Blockchains are designed to store transactions and data without requiring any central authority or repository.

Blockchain ledgers are generally maintained and updated by networks of computers working together -- somewhat similar to the way that Wikipedia is updated and maintained by all its users.

Many corporations, though, have created their own Ethereum networks with private blockchains, independent of the public system, and that could ultimately detract from the value of the individual unit in the Ethereum system -- known as an Ether -- that people have recently been buying.

The interest in Ethereum is one sign of the corporate fascination with blockchains. Most major banks have expressed an interest in using them to make trading and money transfer faster and more efficient. On Tuesday, executives from the largest banks will gather for a conference, "Blockchain: Tapping Into the Real Potential, Cutting Through the Hype."

Many of these banks have recently been looking at how some version of Ethereum might be put to use. JPMorgan, for instance, has created a specific tool, Masala, that allows some of its internal databases to interact with an Ethereum blockchain.

Michael Novogratz, a former top executive at the private equity firm Fortress Investing Group, who helped lead Fortress' investment in Bitcoin, has been looking at Ethereum since he left Fortress last fall. Novogratz said he made a "significant" purchase of Ether in January. He has also heard how the financial industry's chatter about the virtual currency has evolved.

"A lot of the more established players were thinking, 'It's still an experiment,'" he said. "It feels like in the last two to three months that experiment is at least getting a lot more validation."

The New York Times