Ethereum is a global, open-source blockchain platform for decentralized applications (DApps), powered by smart contracts and embedded with a native digital currency, ether (ETH)1. Launched in 2015, the network was designed to expand upon Bitcoin’s primary function as a peer-to-peer (P2P) digital currency by incorporating a platform capable of deploying smart contracts and more complex structures, such as DApps and decentralized autonomous organizations (DAOs).2

On Ethereum, code can be written to control the transmission of digital value based on programmable conditions. Ether, its native currency, serves three main purposes:

  1. To store value in ETH
  2. To settle transactions by allowing users to send or receive payments in ETH
  3. To facilitate network operations (i.e., power DApps) via transaction fees paid in ETH, which are based on the computational costs of executing the code.

Ethereum initiated the second wave of innovation in blockchain technology, expanding upon the use cases afforded by Bitcoin and solidifying its own unique role in the digital currency ecosystem. In its final form, Ethereum seeks to be the leading smart contract-compatible digital currency platform.

Learn more about the history and defining characteristics of Ethereum in our report, which is part of the Building Blocks series:

2. Decentralized applications (DApps) are applications, programs, or tools that utilize smart contracts built into the Ethereum network. Decentralized Autonomous Organizations (DAOs) are organizations that function independent of a central governing body, and are an autonomous application of a DApp.