What is Ethereum?
Ethereum is an open-source, decentralized blockchain platform that enables developers to build and deploy smart contracts and decentralized applications (dApps). Launched in July 2015 by Vitalik Buterin and his team, Ethereum distinguishes itself from other cryptocurrencies through its programmable capabilities, allowing for a wide range of applications beyond simple monetary transactions.
At the heart of Ethereum's functionality is its native cryptocurrency, Ether (ETH), which facilitates transactions and acts as a form of payment for computational services on the network. Ethereum operates on a unique consensus mechanism, transitioning from a proof-of-work (PoW) to a proof-of-stake (PoS) model in 2022 with the upgrade known as Ethereum 2.0, aimed at improving scalability, security, and energy efficiency.
Smart contracts on Ethereum are self-executing contracts where the terms are directly written into code. This revolutionizes traditional contract agreements by removing intermediaries, thereby increasing efficiency and reducing costs. The ecosystem of Ethereum includes various tools and protocols, facilitating innovations like decentralized finance (DeFi), non-fungible tokens (NFTs), and various other blockchain-based solutions.