What is Ethereum?

What Is Ethereum?

Ethereum is a decentralized blockchain platform that introduced programmable "smart contracts." While Bitcoin is mainly used as a digital currency and store of value, Ethereum allows developers to build applications (dApps) that run on the blockchain. The native cryptocurrency of the Ethereum network is called Ether (ETH).

How It Differs From Bitcoin

Bitcoin focuses on being a peer-to-peer electronic cash system. Ethereum was designed as a general-purpose blockchain: you can send ETH, but you can also run code (smart contracts) that executes automatically when conditions are met. This has enabled decentralized finance (DeFi), NFTs, token launches, and many other use cases. Ethereum also does not have a fixed supply cap like Bitcoin.

Smart Contracts and dApps

Smart contracts are programs stored on the blockchain. They run when triggered by a transaction, without a middleman. For example, a DeFi protocol might let you lend ETH and earn interest, or swap one token for another. Using these contracts usually requires paying "gas" fees in ETH.

ETH as an Asset

ETH is used to pay for transactions and gas on Ethereum. It is also held as an investment and as collateral in DeFi. In India, you can buy and sell ETH on regulated exchanges. As with other crypto, gains may be taxable. Use secure wallets and only invest what you can afford to lose.