What is Ethereum?
Ethereum was launched in 2015 by Vitalik Buterin. Unlike Bitcoin, which was designed purely as digital money, Ethereum was built as a programmable platform. Developers can write and deploy code — called smart contracts — that runs automatically on the blockchain without any middleman.
What are smart contracts?
A smart contract is a self-executing agreement written in code. When predefined conditions are met, it executes automatically — no bank, lawyer, or escrow service required. Smart contracts are the foundation of DeFi, NFTs, and thousands of blockchain applications.
💡 Think of Ethereum as a global computer that anyone can use. Bitcoin is like digital gold — you hold it. Ethereum is like a platform — you build on it.
The Ethereum ecosystem
- DeFi (Decentralised Finance): Lending, borrowing, and trading without banks. Platforms like Uniswap and Aave run on Ethereum.
- NFTs: Unique digital assets representing ownership of art, music, gaming items. The majority of NFT activity has historically been on Ethereum.
- Stablecoins: USDC and DAI — two of the most widely used stablecoins — run on Ethereum.
The Merge — Ethereum's switch to Proof of Stake
In September 2022, Ethereum completed "The Merge" — switching from energy-intensive Proof of Work to Proof of Stake. This reduced Ethereum's energy consumption by over 99%. Validators who stake ETH now secure the network instead of miners.
Ethereum's limitations
Gas fees can spike to tens or even hundreds of euros during busy periods. This has driven the growth of Layer 2 scaling solutions like Polygon, Arbitrum, and Optimism, which process transactions off the main Ethereum chain at a fraction of the cost.
The main DEX on Ethereum — Uniswap
Uniswap is the largest decentralised exchange in the world and runs primarily on Ethereum. It allows you to swap any ERC-20 token directly from your wallet with no sign-up or KYC.