Ethereum is a decentralized blockchain platform that enables developers to build and deploy smart contracts and decentralized applications (dApps). It was proposed in late 2013 by Vitalik Buterin and launched in July 2015. Ethereum extends beyond Bitcoin’s functionality by allowing programmable transactions through smart contracts, which execute automatically when predefined conditions are met.
Key Features of Ethereum
1. Smart Contracts
Smart contracts are self-executing agreements written in code that run on the Ethereum blockchain. They remove intermediaries, making transactions more efficient and transparent.
2. Ether $ETH
Ether is the native cryptocurrency of Ethereum. It is used to pay for transaction fees (gas fees) and computational services on the network. ETH also serves as an investment asset and a means of exchange.
3. Ethereum Virtual Machine (EVM)
The EVM allows developers to execute smart contracts in a secure and decentralized environment. It ensures that smart contract execution is consistent across all Ethereum nodes.
4. Decentralized Applications (dApps)
Ethereum enables the creation of dApps, which operate without a central authority. These apps cover industries like finance (DeFi), gaming, supply chain, and more.
5. Decentralized Finance (DeFi)
Ethereum has fueled the rise of DeFi, which provides financial services such as lending, borrowing, and trading without traditional banks. Popular DeFi platforms include Aave, Uniswap, and MakerDAO.
Ethereum Upgrades: Ethereum 2.0 & Beyond
Ethereum has undergone significant upgrades to improve scalability, security, and sustainability.
Ethereum 2.0 (Eth2) and Proof-of-Stake (PoS)
In September 2022, Ethereum transitioned from Proof-of-Work (PoW) to Proof-of-Stake (PoS) with "The Merge." This upgrade reduced energy consumption by over 99% and paved the way for future scalability solutions.
Sharding
Planned for future Ethereum upgrades, sharding will split the blockchain into smaller partitions (shards) to process transactions in parallel .