Ethereum

Ethereum is a blockchain network designed to support programmable applications in addition to basic value transfers.

It allows developers to create systems that operate according to predefined rules without relying on centralized servers or intermediaries.

Why Ethereum was created

Early blockchains focused mainly on recording and transferring digital value.

Ethereum was created to extend this idea by allowing code to run directly on a blockchain, making it possible to build applications that function without centralized control.

What are smart contracts?

Smart contracts are programs stored on a blockchain that automatically execute actions when specific conditions are met.

Once deployed, smart contracts run according to their code and are recorded on the blockchain, making their behavior transparent and verifiable.

Ethereum as a platform

Ethereum functions as a platform for decentralized applications, often referred to as dapps.

These applications can provide services such as exchanges, lending systems, digital marketplaces, and asset management tools without requiring a central operator.

Ether (ETH)

Ether, commonly abbreviated as ETH, is the native cryptocurrency of the Ethereum network.

It is used to pay transaction fees and compensate network participants for processing and validating activity on the blockchain.

How Ethereum differs from Bitcoin

Bitcoin was designed primarily as a decentralized digital payment system.

Ethereum was designed to support programmable applications in addition to payments. While both use blockchain technology, their goals and capabilities differ.

Ethereum and wallets

Ethereum assets are controlled using private keys stored in wallets.

Because Ethereum supports multiple asset types, including tokens and NFTs, wallets must be compatible with the Ethereum network and its standards.

Common misunderstandings

Ethereum is sometimes mistaken for a single company or service.

In reality, it is a decentralized network maintained by independent participants. Using Ethereum safely still requires understanding wallets, private keys, and transaction details.

Key takeaway

Ethereum expanded blockchain technology by enabling programmable applications through smart contracts.

Understanding Ethereum helps explain many modern crypto systems, including tokens, decentralized finance, and digital assets.

Related concepts

• Smart contracts
• Tokens
• Decentralized applications (dapps)
• Proof of stake

Next lesson

Different blockchain networks are designed with different goals and trade-offs.

The next lesson introduces the XRP Ledger, a network designed primarily for payments and value transfer, and explains how it differs from other blockchain systems.

Read: XRP & the XRP Ledger →