FUNDAMENTALS OF CRYPTO
What is Ethereum?
The Home of Smart Contracts.
If Bitcoin was the first version of the internet of money, Ethereum was the upgrade that made that internet programmable.
Launched in 2015 by Vitalik Buterin and a group of developers, Ethereum expanded on Bitcoin’s core idea of decentralisation, but with vastly improved functionality. Instead of just transferring value from one person to another, Ethereum introduced a way to build applications on the blockchain itself.
This innovation came in the form of smart contracts; pieces of code that automatically execute when certain conditions are met. No middleman. No delays. No disputes.
Think of a smart contract like a vending machine:
You insert money.
The machine checks that the amount is correct.
It automatically delivers your snack.
Now apply that to finance, property, art, or gaming. That’s Ethereum.
Ethereum’s blockchain acts as a global computer. Developers can build on top of it, creating applications that run exactly as programmed, without downtime or interference. These applications are known as dApps (decentralised apps). Everything from decentralised exchanges and lending platforms to NFT marketplaces and games are built as dApps.
Ethereum also has its own native currency, Ether (ETH), which is used to pay for transactions and computing power on the network. When you send a transaction or interact with a smart contract, you pay a small “gas fee” in ETH to compensate the network for processing it.
Over time, Ethereum has become the foundation of the decentralised economy, powering entire ecosystems like:
DeFi (Decentralised Finance): banking without banks; lending, borrowing, and earning interest directly on-chain.
NFTs (Non-Fungible Tokens): digital ownership of art, music, and collectibles.
DAOs (Decentralised Autonomous Organizations): blockchain-based communities governed by code and token holders, not executives.
In 2022, Ethereum underwent a massive transformation known as “The Merge”, shifting from energy-intensive Proof of Work to Proof of Stake, reducing its energy consumption by over 99%. This move also set the stage for future scalability improvements and solidified Ethereum’s position as the engine of Web3.
Today, thousands of cryptocurrency projects are built on the Ethereum blockchain, utilising the smart contract infrastructure that Ethereum is considered the pioneer in. If you’ve ever held a number of smaller projects that are outside of the top 10 in market cap, chances are you’ve used the Ethereum blockchain to transact funds.
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