Ethereum is a blockchain platform that enables smart contracts and decentralized applications (DApps) to run without a single authority controlling them. Its native token is Ether (ETH), but Ethereum is far more than just a cryptocurrency — it is a programmable platform.
How Ethereum Works
Ethereum runs on a blockchain, a distributed ledger where transactions and data are recorded across many computers. Unlike Bitcoin, which primarily transfers value, Ethereum allows developers to write and execute smart contracts — self-executing code where the terms of an agreement are written directly into the software.
Developers use Ethereum to build decentralized applications (DApps) that run on a peer-to-peer network rather than on a single company's servers. This removes the need for intermediaries and reduces the risk of a single point of failure.
Key Features
- Smart Contracts: Automated agreements executed by code, with no intermediary required.
- DApps: Applications running on the Ethereum network instead of centralized servers.
- Ethereum Virtual Machine (EVM): The environment where smart contracts execute across the network.
Ethereum's Current State
Ethereum transitioned from proof-of-work to proof-of-stake consensus in its Ethereum 2.0 upgrade. This change was designed to reduce network congestion and transaction fees (called gas fees), which had become barriers for users. The network remains the most widely used platform for smart contracts and DApps, though competitors offer different tradeoffs around speed and cost.
