Ethereum
The second-largest cryptocurrency by market capitalization and the leading smart contract platform. It enables developers to build decentralized applications and supports a wide ecosystem of DeFi protocols and NFTs.
Why It Matters
Ethereum is a foundational platform for decentralized applications and smart contracts, making it a critical player in the crypto ecosystem. Knowing about Ethereum helps investors appreciate the broader potential of blockchain technology beyond digital currencies.
Example
For instance, Ethereum enables developers to create applications that can automate contracts, such as loans or digital art sales, functioning without intermediaries and altering traditional business practices.
Beginner Context
For beginners, understanding Ethereum is vital as it represents the potential of blockchain to revolutionize industries. Learning about its features can expand your knowledge of crypto beyond simple transactions.
Mike Starr
Founder, CryptoWizardTools · M.S. Organizational Management
Last reviewed: August 2026
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Smart Contract
Self-executing code stored on a blockchain that automatically enforces the terms of an agreement when predetermined conditions are met.
Gas Fees
Transaction fees paid to validators or miners for processing transactions on a blockchain network. On Ethereum, gas fees fluctuate based on network congestion.
Proof of Stake
A consensus mechanism where validators are chosen to create new blocks based on the amount of cryptocurrency they have staked as collateral, rather than computational power.
ERC-20
A technical standard for creating fungible tokens on the Ethereum blockchain. Most tokens in the DeFi and ICO ecosystems are ERC-20 tokens, including USDT, LINK, and UNI. The standard ensures all tokens work the same way on Ethereum.
DeFi
Decentralized Finance. Financial services and products built on blockchain technology that operate without traditional intermediaries like banks or brokerages.