// GLOSSARY -- BLOCKCHAIN & CRYPTO FUNDAMENTALS

What is Ethereum?

1 min read Updated

Ethereum is a decentralized blockchain platform that enables smart contracts and decentralized applications, serving as the foundation for DeFi, NFTs, and the majority of Web3 development.

WHY IT MATTERS

Ethereum proved that decentralized computation works. Vitalik Buterin's insight: instead of a blockchain that just tracks balances, build one that executes arbitrary programs. Smart contracts — code that runs exactly as written, without intermediaries — became the foundation for an entire ecosystem.

Ethereum hosts the vast majority of DeFi protocols, NFT marketplaces, DAOs, and Web3 applications. Its EVM (Ethereum Virtual Machine) is the standard other chains emulate.

The transition from proof-of-work to proof-of-stake ('The Merge') reduced energy consumption by ~99.95%. Ethereum's roadmap focuses on scaling through rollups while maintaining decentralization.

FREQUENTLY ASKED QUESTIONS

What are smart contracts?
Programs on the blockchain that execute automatically when conditions are met. They hold funds, enforce rules, and interact with other contracts — enabling trustless applications.
What is gas on Ethereum?
The unit measuring computational work. Every operation costs gas, paid in ETH. Gas prices fluctuate with demand, preventing spam and compensating validators.
How does Ethereum scale?
Through Layer 2 rollups (Optimism, Arbitrum, Base) that process transactions off-chain and post proofs to Ethereum, maintaining security while increasing throughput.

FURTHER READING

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