Ethereum is a decentralized, open-source blockchain platform that enables developers to build and deploy smart contracts and decentralized applications (dApps). It was proposed by Vitalik Buterin in 2013 and launched in 2015.
Unlike Bitcoin, which was designed primarily as a digital currency, Ethereum was built to be a programmable blockchain. This means that, in addition to transferring value, Ethereum allows developers to create complex applications that run on the blockchain.
The native currency of Ethereum is called Ether (ETH). It is used to pay for transaction fees and computational services on the Ethereum network.
What are smart contracts?
Smart contracts are self-executing programs stored on the blockchain that automatically enforce and execute the terms of an agreement when predefined conditions are met. They eliminate the need for intermediaries, making transactions faster, cheaper, and more transparent.
Key features of Ethereum
- Decentralization: No single entity controls the Ethereum network. It is maintained by thousands of nodes around the world.
- Programmability: Developers can build a wide range of applications on top of Ethereum.
- Security: The blockchain technology underlying Ethereum makes it extremely resistant to fraud and hacking.
- Transparency: All transactions and smart contracts on Ethereum are publicly visible on the blockchain.
Ethereum has become the foundation for a wide range of innovations, including DeFi (Decentralized Finance), NFTs (Non-Fungible Tokens), and DAOs (Decentralized Autonomous Organizations).
In 2022, Ethereum transitioned from a Proof of Work (PoW) consensus mechanism to Proof of Stake (PoS) in an upgrade known as "The Merge," significantly reducing its energy consumption.