Ethereum

Ethereum is a **programmable blockchain** that enables developers to build and deploy decentralized applications (dApps) and smart contracts. Its native cryptocurrency is **Ether (ETH)**. As a Turing-complete platform, it can execute complex code and has become the second-largest cryptocurrency by market capitalization, behind Bitcoin.

A Brief History of Ethereum

Ethereum was first proposed in a 2013 white paper by Vitalik Buterin, who envisioned a platform that could do more than just facilitate digital currency transactions. After a successful initial coin offering (ICO) in 2014, the Ethereum blockchain officially launched in 2015.

A significant event in Ethereum's history was the "Merge," a major upgrade that took place in 2022. This transition shifted the network's consensus mechanism from a energy-intensive Proof of Work (PoW) model to a more efficient **Proof of Stake (PoS) model. This change was aimed at improving the network's scalability, security, and sustainability.

How Ethereum Works

Ethereum introduced the concept of a **smart contract** platform. These are self-executing contracts with the terms of the agreement directly written into lines of code. They run on the blockchain, so they are transparent, immutable, and don't require a third party to enforce the terms. Users pay a network fee, known as **gas**, in Ether to execute these smart contracts and other transactions.

Additionally, the Ethereum blockchain can host other cryptocurrencies, known as **tokens**, which are created using its **ERC20 compatibility standard**.

What is Ethereum Used For?

Ethereum's native currency, **Ether (ETH)**, is used to pay transaction fees on the network. However, the platform's utility extends far beyond just a currency. Developers use Ethereum to create and run **decentralized applications (dApps)** and issue new crypto assets. The platform has fostered a vast ecosystem of use cases, including:

- Decentralized Finance (DeFi): Financial applications like lending, borrowing, and trading without intermediaries.

- Non-Fungible Tokens (NFTs):** Unique digital assets used for art, collectibles, and gaming.

- Play-to-Earn Gaming:** Games that allow players to earn crypto or NFTs through gameplay.

- Decentralized Autonomous Organizations (DAOs): Organizations run by code and governed by token holders.