Edison had signed up electricity subscribers for his DC system, stringing wires along the streets of New York City and wiring their homes. But George Westinghouse was already working on a competing AC system. He saw that Tesla's inventions could give him a big edge over Edison.
Tesla understood that AC was a more efficient way to drive motors and power lighting. Even more important, AC could be "stepped up" using coils of wires. Through induction, low voltage in one coil was transformed to high voltage in another. High voltage current could travel through wires more efficiently, then be stepped down for household use. Tesla's circuits were the forerunners of the transformers we routinely see on electric poles. Direct current could not be stepped up. To transmit it more than a few miles required ever thicker wires.
AC was known before Tesla began his work. But the inventor devised an integrated system of generators, transmission lines, motors, lighting and other circuitry that made AC a feasible alternative to DC. In 1887, Tesla filed for seven patents related to his AC inventions. They were awarded without being successfully challenged. Westinghouse bought the rights to them in 1888.
DC wasn't dead -- yet. Westinghouse and Edison plunged into what was known as the "War of the Currents." Going on the offensive, Edison claimed that AC was far too dangerous to be used by the public. His point was reinforced when an acquaintance of Edison's named Harold Brown arranged to have a Westinghouse AC generator provide the current for the execution of a condemned criminal in 1890 [source: PBS].
But Westinghouse, armed with the Tesla patents, could show that AC was a far more efficient alternative. The climactic battle in the War of the Currents took place at the colossal Chicago Columbian Exposition of 1893-94. Westinghouse was able to supply power for much less than what Edison would have charged. He won the contract and wired the fair based on the Tesla system. As the exposition opened, thousands of bright lamps flashed on, startling fair-goers. The demonstration dispelled public fears of alternating current, and AC became the standard for power systems.
The victory was hammered home by Tesla's realization of his childhood dream: a power generating plant at Niagara Falls. In 1890, investors took a big gamble on AC current and hydroelectric power, both still-unproven technologies. A long, tense wait ended in 1896 when the generators designed by Tesla began to feed power into the system. Eventually, they sent electricity all the way to New York City, lighting up Broadway. As hydroelectric plants began to be built around the world, the age of electrical power had arrived.
The war of the currents was over, but Nikola Tesla had already moved on to even more visionary inventions.