Crypto Basics #4 — Understanding Ethereum (ETH)

If Bitcoin showed that digital money could work without a bank, Ethereum asked a bigger question: what else could a blockchain do?

Launched in 2015, Ethereum turned the blockchain from a payment system into a platform that runs software. Its key idea is the smart contract: code that lives on the blockchain and executes automatically when its conditions are met, without anyone needing to enforce it. We'll cover smart contracts on their own next, because they're worth understanding properly.

That one capability opened the door to whole categories of applications. Decentralized finance, NFT marketplaces, blockchain-based games and tools all run on Ethereum. Thousands of projects are built on top of it, which is why people describe it less as a currency and more as an infrastructure layer for the crypto economy.

The coin itself, ETH, is what you use to pay for activity on the network. It's the fuel that lets transactions and applications run. Ethereum has also gone through major upgrades over the years, including a shift to a more energy-efficient system called proof of stake.

So Bitcoin and Ethereum aren't really competitors. One focuses on being sound digital money; the other on being a platform other things are built on.

In short: Ethereum is a blockchain built to run applications, with smart contracts as its core innovation.

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