Ethereum (ETH): A Decentralized World Computer
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 late 2013 and officially launched in July 2015. Ethereum’s native cryptocurrency, Ether (ETH), is used to pay for transaction fees, computational services, and serves as a store of value and medium of exchange.
At its core, Ethereum extends the blockchain concept introduced by Bitcoin. While Bitcoin primarily focuses on peer-to-peer digital currency, Ethereum was designed to be a more flexible platform. It functions as a “world computer” — a global, decentralized system where code and applications can run exactly as programmed without downtime, censorship, or interference.
Smart contracts are Ethereum’s key innovation. These are self-executing contracts with the terms directly written into code. For example, a smart contract can automatically transfer ETH to someone once certain conditions are met. This innovation has opened the door to countless possibilities, from creating tokens to building decentralized financial systems.
Ethereum's most transformative impact has been in the rise of Decentralized Finance (DeFi) and Non-Fungible Tokens (NFTs). DeFi platforms use Ethereum to provide financial services like lending, borrowing, trading, and interest earning — without banks or intermediaries. NFTs, unique digital assets that prove ownership of digital art, music, or collectibles, are also primarily built on Ethereum, giving creators new ways to monetize their work.
Initially, Ethereum operated using a Proof-of-Work (PoW) consensus mechanism, similar to Bitcoin, where miners validated transactions using powerful computers. However, in September 2022, Ethereum transitioned to Proof-of-Stake (PoS) via the event known as The Merge. This switch drastically reduced the energy consumption of the Ethereum network and introduced staking, where users lock up $ETH
