Ethereum is a decentralised, open-source blockchain platform that enables developers to build and deploy smart contracts and decentralised applications (dApps). It was proposed by Vitalik Buterin in late 2013, and development was crowdfunded in 2014, with the network going live on July 30, 2015.
Here are some key aspects of Ethereum:
Smart Contracts: Ethereum is primarily known for its ability to execute smart contracts. Smart contracts are self-executing contracts with the terms directly written into code. They automatically execute and enforce agreements when predetermined conditions are met. This enables a wide range of applications, from simple financial transactions to complex decentralised autonomous organizations (DAOs).
Ether (ETH): Ether is the native cryptocurrency of the Ethereum platform. It’s used to compensate miners for securing the network, and it’s also used to pay for transaction fees and computational services on the network.
Decentralisation: Like Bitcoin, Ethereum operates on a blockchain, which is a decentralised ledger that records all transactions across a network of computers. This means no single entity or government controls the network.
Turing-Complete: Unlike Bitcoin, Ethereum is considered “Turing-complete,” which means it can theoretically solve any computational problem. This allows for a wider range of applications beyond simple financial transactions.
Constant Development: Ethereum has a vibrant and active developer community, with constant improvements and upgrades. The transition from Ethereum 1.0 to Ethereum 2.0, which involves moving from a Proof-of-Work (PoW) to a Proof-of-Stake (PoS) consensus mechanism, is one of the most anticipated upgrades.
Decentralised Applications (dApps): Ethereum enables the development of decentralised applications, which are software applications that run on a network of computers (blockchain) rather than a single central server. This can lead to increased security, transparency, and censorship resistance.
ERC-20 Tokens: Ethereum also introduced the concept of token standards, the most common of which is the ERC-20 standard. This allows for the creation of new cryptocurrencies (tokens) on the Ethereum blockchain. Many Initial Coin Offerings (ICOs) were conducted using ERC-20 tokens.
DeFi and NFTs: Ethereum has played a crucial role in the rise of decentralized finance (DeFi) and non-fungible tokens (NFTs). DeFi refers to the use of blockchain technologies to recreate traditional financial systems (like lending and borrowing) in a decentralised way. NFTs are unique digital assets that represent ownership of a specific item or piece of content.
Remember that the Ethereum ecosystem is ever-changing, and some of the information in this FAQ may have been updated since the time of writing.