What is Ethereum

Ethereum is the world's second-largest cryptocurrency by market capitalisation and the most widely used blockchain platform for building decentralised applications. Conceived by Vitalik Buterin in 2013 and launched in July 2015, Ethereum introduced a revolutionary concept: a programmable blockchain a global, decentralised computer where anyone can deploy and run software without any central entity being able to stop it.

THE SMART CONTRACT INNOVATION

Ethereum's defining contribution to blockchain technology is the smart contract a self-executing programme stored on the blockchain that automatically enforces agreement terms when predefined conditions are met, without requiring any intermediary. Written primarily in Solidity, smart contracts power everything from decentralised exchanges and lending protocols to NFT collections, DAOs, and prediction markets.

ETHEREUM'S ECOSYSTEM

The Ethereum ecosystem is the largest in crypto by total value locked, developer activity, and number of deployed applications.

DeFi: Uniswap, Aave, Compound, Lido, Curve, MakerDAO managing hundreds of billions in user funds.
NFTs: ERC-721 standard made Ethereum the home of CryptoPunks, Bored Ape Yacht Club, and most major NFT collections.
Layer 2 Networks: Arbitrum, Optimism, Base, zkSync, Polygon, and StarkNet all extend Ethereum's capacity while inheriting its security.
DAOs: On-chain governance for hundreds of protocols.

DeFi infrastructure: Chainlink oracles, The Graph indexing, ENS naming.

THE MERGE: PROOF OF STAKE TRANSITION

In September 2022, Ethereum completed The Merge the most significant software upgrade in blockchain history transitioning from energy-intensive proof-of-work mining to proof-of-stake consensus. Energy consumption dropped by 99.95%. New ETH issuance fell by approximately 90% compared to the PoW era. Combined with EIP-1559 fee burning, ETH became net deflationary.

ETHEREUM'S ROADMAP

The Surge (EIP-4844 Danksharding — dramatically reducing L2 fees), The Scourge (MEV mitigation), The Verge (Verkle trees for statelessness), The Purge (history expiry for efficiency), and The Splurge (protocol cleanup) represent years of planned improvements toward a highly scalable, secure, and decentralised base layer.

Terms in addition to the Ethereum

Blockchain

A blockchain is a subset of a distributed database. The Bitcoin inventors originally prototyped the system in 2008. This modern database is made up of separate blocks that are connected together in a chronological chain. Blockchains may be used to store a wide range of data types. It has mostly been utilized as a public ledger for bitcoin transactions to date. A peer-to-peer network comprised of independent nodes uses a consensus process to ensure the blockchain's security and legitimacy. Each node in the network keeps a public and immutable copy of the data.

2 Factor Authentication (2FA)

2 Factor Authentication is a security measure with two layers. It is used by the majority of cryptocurrency exchanges. To log in, you must provide not only a password, but also a code obtained, for example, from the Google authenticator.

Airdrop

An airdrop is a method of distributing coins. End users can typically obtain coins for free or in exchange for doing a small task, such as subscribing to a newsletter, sending a tweet, or inviting others via a personal affiliate link. Cryptocurrency airdrops — the act of depositing cryptocurrency into public crypto wallets — are utilized as a marketing, liquidity creation, and network bootstrapping technique for many different types of blockchain initiatives.

Altcoin

Altcoin - "alternative coin" - is any kind of digital currency other than Bitcoin. Since the launch of Bitcoin, the world's first digital currency, many altcoins (as well as supporting blockchains) have been created. Altcoin digital currencies share many similarities to Bitcoin, but consistently and have significant differences. There are about 20,000 altcoins, and this number is expected to grow significantly in the coming years. Altcoins often develop Bitcoin features. Ethereum, currently the most widely used blockchain, supports digital contracts and separate applications where Bitcoin does not. Altcoins are also often created to cater to the needs of different users. The Litecoin blockchain, for example, can process payments quarterly for the duration of Bitcoin.

Cold Storage

Cold storage is the way to store cryptocurrency offline. The word refers to the use of offline wallets that are not connected to the internet. Cold storage is the most secure way to keep cryptocurrencies since an offline currency becomes less likely to be hacked and stolen. Paper wallets, printed renditions of private keys, and offline hardware and software wallets are all examples of cold storage.