Introduction to Ethereum
Ethereum is a decentralized platform that extends blockchain beyond simple currency transactions. Created by Vitalik Buterin in 2015, it introduced smart contracts — self-executing programs that run on the blockchain, enabling decentralized applications (DApps).
Ethereum vs Bitcoin
┌──────────────────────┬───────────────────────────┐
│ FEATURE │ BITCOIN ETHEREUM │
├──────────────────────┼───────────────────────────┤
│ Purpose │ Digital cash Programmable│
│ │ platform │
│ Smart Contracts │ Limited Full │
│ Block Time │ ~10 min ~12 sec │
│ Consensus (current) │ PoW PoS │
│ Supply │ 21M cap No cap │
│ Programming Lang │ Script Solidity │
│ TPS (approx) │ 7 15-30 │
└──────────────────────┴───────────────────────────┘
The Ethereum Virtual Machine (EVM)
The EVM is the runtime environment for smart contracts. Every node on the Ethereum network runs the EVM, ensuring that all participants reach the same result when executing the same code.
┌──────────────────────────────────────┐
│ Smart Contract (Solidity) │
│ │ │
│ ▼ │
│ ┌──────────────┐ │
│ │ Compile to │ │
│ │ EVM Bytecode│ │
│ └──────┬───────┘ │
│ │ │
│ ▼ │
│ ┌──────────────┐ │
│ │ EVM executes│ on every node │
│ │ deterministi│ cally │
│ └──────────────┘ │
└──────────────────────────────────────┘
Ether (ETH) — The Native Token
ETH is used to pay for computational resources (gas) on the Ethereum network. Every operation — from a simple transfer to complex contract logic — costs gas, measured in gwei (1 ETH = 10^9 gwei).
The Merge — Proof of Stake
In September 2022, Ethereum transitioned from Proof of Work to Proof of Stake ("The Merge"). This reduced Ethereum's energy consumption by ~99.95% while maintaining security through economic penalties for misbehavior.