Ethereum is a decentralized, open-source blockchain platform that allows developers to build and deploy smart contracts and decentralized applications (DApps). Launched in 2015 by Vitalik Buterin and others, Ethereum is the second-largest cryptocurrency by market capitalization, after Bitcoin. Its native cryptocurrency is called Ether (ETH).
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Key Features of Ethereum
1. Smart Contracts: These are self-executing contracts with the terms written in code. They automatically execute actions when conditions are met, removing the need for intermediaries.
2. Decentralized Applications (DApps): Ethereum enables developers to create applications that are decentralized, meaning they are not controlled by a single authority. Examples include DeFi platforms, NFT marketplaces, and games.
3. Ethereum Virtual Machine (EVM): This is the computing environment on Ethereum that processes smart contracts and ensures that code runs in a secure and predictable manner across the network.
4. Transition to Proof of Stake: In 2022, Ethereum completed "The Merge," transitioning from Proof of Work (PoW) to Proof of Stake (PoS), significantly reducing energy consumption and paving the way for scalability improvements.
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Use Cases of Ethereum
Decentralized Finance (DeFi): Platforms like Uniswap, Aave, and Compound are built on Ethereum, allowing users to lend, borrow, and trade without traditional banks.
NFTs (Non-Fungible Tokens): Ethereum powers most NFT platforms like OpenSea and Foundation, where users can buy, sell, and create unique digital assets.
DAOs (Decentralized Autonomous Organizations): These are community-run organizations that operate on Ethereum using smart contracts for governance.
Gaming and Metaverse: Blockchain games and virtual worlds like Decentraland and Axie Infinity leverage Ethereum's capabilities.
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Ethereum 2.0 and Future Upgrades
Ethereum continues to evolve with planned upgrades:
Sharding (coming in future updates): Divides the blockchain into smaller parts (shards) to improve scalability.
