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Ethereum (ETH)

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What is Ethereum (ETH)?

Ethereum is the second-largest cryptocurrency by market cap. It is a decentralized open-source blockchain protocol started in 2013 by Vitalik Buterin. ETH, its native token, allows the network to function. The Ethereum network acts as an infrastructure layer for other decentralized applications (dApps) to be built on top of. Ethereum launched a compatibility standard, ERC-20, to help other protocols build and launch their own tokens while still benefiting from the security of the Ethereum network.

 

What makes it unique?

  • Second largest cryptocurrency asset by market cap;

  • Serves as a repository network where the majority of DeFi is built;

  • Pioneered the concept of smart contracts to cryptocurrencies;

  • Built on Proof-of-Work but transitioning to Proof-of-Stake;

  • Features its own programming language: Solidity;

  • Can host other tokens through its ERC-20 standard;

  • Over 40 of the top 100 cryptocurrencies by market cap are ERC-20 tokens.

 

Purpose

The Ethereum foundation’s goal is to become a global platform for decentralized applications, on which people from all over the world can write and run their own software that is resistant to censorship, downtime, and fraud. One of the founders, Gavin Wood, described Ethereum as “one computer for the entire planet”. Ethereum has been a pioneer in the field of smart contracts which has opened the floodgates to a great number of innovations and spawned the birth of DeFi, or Decentralized Finance. The exponential growth Ethereum has undergone has not come without growing pains. Gas fees, the price users pay to subsidize the running of the network have been rising consistently. To get around this, a transition from Proof-of-Work consensus to Proof-of-Stake is currently in the works. The Ethereum foundation recently published a revised roadmap for 2022 where you can see what changes are in store for the world’s second-largest crypto.

 

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