Ethereum (ETH) is an open-source, decentralized platform designed to power decentralized applications (dApps) and smart contracts. Its native cryptocurrency, Ether (ETH), fuels transactions and computational services on the network.
Key Features of Ethereum (ETH)
Smart Contracts
Ethereum’s smart contract functionality automates agreements on the blockchain, eliminating intermediaries. This enables:
- Trustless transactions: Contracts execute automatically when conditions are met.
- Tamper-proof records: Immutable blockchain storage prevents fraud.
- Diverse use cases: From DeFi to supply chain management.
Decentralized Applications (dApps)
Ethereum serves as a foundation for dApps, enabling developers to build:
- Financial tools (e.g., lending platforms like Aave).
- Gaming and NFT marketplaces.
- Enterprise solutions (e.g., JP Morgan’s Quorum).
Ethereum vs. Bitcoin (BTC)
| Feature | Ethereum (ETH) | Bitcoin (BTC) |
|---|---|---|
| Purpose | Smart contracts, dApps | Digital currency, store of value |
| Supply Cap | No hard cap | 21 million BTC |
| Consensus | Transitioning to Proof-of-Stake | Proof-of-Work |
| Transaction Speed | ~15-30 TPS (upgradable) | ~5 TPS |
👉 Discover how Ethereum powers Web3 innovations
Ethereum Classic (ETC) vs. Ethereum (ETH)
- Origin: ETC maintains the original chain post-2016 DAO hack; ETH forked to reverse the hack.
- Development: ETH is actively upgraded; ETC prioritizes immutability.
Challenges and Upgrades
- Scalability: High gas fees during congestion (e.g., 2020 DeFi boom).
Solutions:
- Ethereum 2.0: Sharding and PoS to boost throughput.
- Layer 2s: Rollups (e.g., Optimism) reduce costs.
Future Outlook
- DeFi Growth: Over $100B locked in Ethereum-based protocols.
- Enterprise Adoption: EEA members like Microsoft and Santander.
- Sustainability: PoS cuts energy use by ~99.95%.
FAQ
1. What is ETH used for?
ETH pays for transactions and smart contract execution on Ethereum. It’s also a speculative asset and collateral in DeFi.
2. How does Ethereum differ from Bitcoin?
Bitcoin is digital gold; Ethereum is a programmable blockchain for dApps and smart contracts.
3. What is Ethereum 2.0?
An upgrade to PoS, improving scalability and reducing energy consumption.
👉 Explore Ethereum’s latest developments