Ethereum is a blockchain network designed to run programmable applications. While Bitcoin is mostly focused on digital money, Ethereum lets developers build smart contracts, decentralized finance apps, tokens, games, and other blockchain-based services.
How It Works
Ethereum uses Ether, or ETH, as its native asset. Users pay ETH as gas fees when they send transactions or interact with smart contracts.
The network is secured by proof of stake. Validators lock up ETH to help process transactions and propose new blocks. If they follow the rules, they can earn rewards; if they act dishonestly, they can be penalized.
Why It Matters In Crypto
Ethereum matters because it turned blockchains into programmable platforms. Many major crypto sectors, including DeFi, NFTs, stablecoins, and tokenized assets, developed first or most deeply on Ethereum.
A practical example: a lending app on Ethereum can automatically match lenders and borrowers using code instead of a traditional bank.