Emerging Technologies
Ethereum
Definition
Ethereum is a decentralized, open-source blockchain with smart contract functionality. Ether (ETH) is the native cryptocurrency of the platform. Among cryptocurrencies, Ether is second only to Bitcoin in market capitalization.
Why It Matters
Ethereum expanded on Bitcoin's idea by creating a programmable blockchain. This allowed developers to build and deploy smart contracts and decentralized applications (DApps), leading to the creation of the DeFi and NFT ecosystems.
Contextual Example
Most NFTs and DeFi applications are built on the Ethereum blockchain. Transactions on the network require payment of "gas fees" in ETH.
Common Misunderstandings
- Ethereum is the platform; Ether (ETH) is the currency.
- Ethereum transitioned from a "Proof of Work" consensus mechanism to a more energy-efficient "Proof of Stake" mechanism in an event known as "The Merge".