Lesson 3 – What is Ethereum?

Everything you need to know about Ethereum (ETH)

Ethereum was launched in 2015 as a decentralized, globally distributed, open-source blockchain network, accessible to everyone regardless of their background and origin. Its official currency is Ether (ETH), with the platform’s name often used interchangeably with the cryptocurrency. 

Additionally, Ethereum utilizes its own peer-to-peer system (P2P), enabling participants to exchange data without intermediaries and central control. These transactions are secured through cryptography.

What sets Ethereum apart from Bitcoin?

Although Ethereum shares the blockchain foundation with cryptocurrencies like Bitcoin, it stands out due to its programmability, offering additional uses and applications.

Primarily, it is used as an open-source platform for dApps (decentralized apps) and DAOs (decentralized organizations), facilitating the creation, management, and execution of smart contracts. Notably, Ethereum is a pioneer in developing a blockchain platform specifically for smart contracts, which is considered one of its most significant innovations.

The supply of “Ether coins” is not capped or subject to deflationary measures. Like most cryptocurrencies, Ethereum uses a decentralized, publicly accessible digital ledger (blockchain) that transparently records all Ether transactions.

Since its release, Ethereum utilized the Proof-of-Work (PoW) consensus protocol to verify transactions and maintain agreement on the state of all information recorded on the blockchain. Each Ethereum block typically contains five Ether and requires around 14 seconds to process. With “The Merge” on September 15, Ethereum’s existing PoW network merged with the Beacon Chain, which had been running on Proof-of-Stake (PoS) in parallel since 2021.

In September 2022, Ethereum discontinued the use of Proof-of-Work and switched to Proof-of-Stake (PoS).