What is Ethereum (ETH)
Ethereum (ETH) is a decentralized blockchain platform that enables the creation and execution of smart contracts and decentralized applications (DApps) without reliance on a central authority. It was proposed by Vitalik Buterin in 2013 and officially launched in 2015.
Unlike Bitcoin (BTC), which primarily functions as a store of value, Ethereum is designed to be a programmable blockchain, allowing developers to build applications on top of it.
Key Features of Ethereum
1. Smart Contracts
Ethereum’s biggest innovation is smart contracts—self-executing contracts with the terms of the agreement directly written into code. They operate automatically when predefined conditions are met, eliminating the need for intermediaries like banks or lawyers.
2. Decentralized Applications (DApps)
Developers can build DApps on Ethereum that run without a central server. Popular DApps include DeFi (Decentralized Finance) platforms, NFT marketplaces, and gaming applications.
3. Ethereum Virtual Machine (EVM)
Ethereum runs on a global network of computers, known as nodes, which execute Ethereum Virtual Machine (EVM) instructions. This allows developers to deploy code in a trustless and censorship-resistant way.
4. Ethereum 2.0 & Proof-of-Stake (PoS) Transition
Ethereum originally used Proof-of-Work (PoW) like Bitcoin, but transitioned to Proof-of-Stake (PoS) in 2022 through Ethereum 2.0 (The Merge). This upgrade:
- Reduces energy consumption by over 99%
- Enhances security and scalability
- Allows ETH holders to earn rewards by staking their coins
5. ERC-20 Tokens & NFTs (ERC-721, ERC-1155)
Ethereum supports ERC-20 tokens, which allow the creation of new cryptocurrencies on its blockchain. It also powers NFTs (Non-Fungible Tokens) through ERC-721 and ERC-1155 standards, enabling digital art, collectibles, and gaming assets.
Ethereum Use Cases
Ethereum’s flexible blockchain enables a variety of real-world applications:
🔹 Decentralized Finance (DeFi) – Enables lending, borrowing, and trading without banks (Uniswap, Aave, MakerDAO)
🔹 NFT Marketplaces – Powers digital art and collectibles (OpenSea, Rarible)
🔹 Gaming & Metaverse – Supports blockchain-based games and virtual worlds (Axie Infinity, Decentraland)
🔹 Supply Chain & Identity Management – Tracks goods and verifies identities transparently
ETH Price & Market Cap
Ethereum is the second-largest cryptocurrency by market capitalization (after Bitcoin). Its price fluctuates based on network activity, upgrades, and macroeconomic factors.
