The distribution of γ‐ray bursts as observed by BATSE rules out the galactic disk origin, and it is consistent with the cosmological origin. Much work is currently done to reconcile galactic halo distribution with the absence of dipole and quadrupole moments in the positions of BATSE bursts. A relativistic expansion of the source is implied by both the halo as well as cosmological origin.While the correct distance scale is likely to be established observationally, a lot of work is done on a variety of possible models. The most promising is a neutron disk or torus accreting onto a stellar mass black hole. Such objects can form as a result of a merger/collision between two neutron stars or a neutron star and a black hole in a close binary system, or more directly from a massive stellar core collapse, a ‘‘failed supernova’’l Up to ∼1o53–1054 erg is released while the disk accretes, but there is no quantitative model yet for the conversion of some of this energy into γ‐rays.