What is Ethereum?

里佳 直子
里佳 直子
Crypto pioneer.

好的,没问题!我来用大白话给你聊聊以太坊到底是个啥。


What Exactly Is Ethereum?

Hey friend! Glad you're curious about Ethereum. Many people, when they hear "Ethereum," think it's just like Bitcoin, another type of virtual currency. That's not entirely wrong, but it's only a small part of the story.

Simply put, if Bitcoin is a global, shared "digital ledger" used only for recording transactions, then Ethereum is a global, shared "world computer" that anyone can program on.

Let's break down what makes this "world computer" so powerful.

The Core Magic: Smart Contracts

Ethereum's most revolutionary feature is smart contracts.

Don't be intimidated by the name; it's not complicated at all. You can think of it as a highly intelligent, self-executing "vending machine."

  • Traditional contract: You and I sign a contract where you pay me 100 units, and I give you a book. If I take the money and don't give you the book, you'd have to find a lawyer, go to court, which is a lot of hassle.
  • Smart contract: We write this agreement as code and put it on Ethereum, this "world computer." The code dictates: "Once my account receives your 100 units, then immediately the digital ownership of this book will automatically be transferred to you."

This process is fully automated by the program, open, transparent, and cannot be tampered with or reversed by anyone. No lawyers, no intermediaries needed; the code is the law.

That's the magic of smart contracts: self-executing, trustless, transparent.

Several Key Roles of Ethereum

With smart contracts as its core functionality, Ethereum plays several important roles:

1. It's a Decentralized Application Platform

Just like Apple has iOS and Google has Android, where developers can build apps, Ethereum is an open platform where anyone can use smart contracts to develop "decentralized applications" (DApps).

These apps don't belong to any single company; they run on thousands of computers worldwide and cannot be shut down or censored by a single entity.

2. Its "Fuel": Ether (ETH)

Running this "world computer" consumes energy. Every operation you perform on Ethereum, such as a transfer or running a smart contract, requires a small "transaction fee" or "fuel fee" (what we call Gas Fee in industry jargon).

This "fuel fee" must be paid using the Ethereum network's native token, which is Ether (ETH).

So, ETH is not just a cryptocurrency that can be invested in or stored like Bitcoin; it's also the essential "digital fuel" required to power the entire Ethereum ecosystem.

3. The Paradise of Decentralized Finance (DeFi)

With smart contracts, people's first thought was to disrupt traditional finance. Thus, Decentralized Finance (DeFi) was born.

You can imagine DeFi as a 24/7, unstaffed bank built on Ethereum. Here, you can:

  • Lend and borrow: Pledge your crypto assets and borrow another asset.
  • Trade: Exchange two tokens directly on-chain, without a centralized exchange.
  • Earn interest: Provide liquidity to earn returns.

All of this is automatically done by smart contracts, with no bank managers and no complex approval processes.

4. The Birthplace of NFTs

You've definitely heard of NFTs (Non-Fungible Tokens), like those digital avatars that sold for exorbitant prices. The vast majority of NFTs were initially created and traded on Ethereum.

NFTs essentially use smart contracts to stamp a unique, immutable "digital certificate of ownership" on an image, a song, a video, or any digital content.

To Summarize

So, don't just simply view Ethereum as "a coin" anymore.

  • It's a platform: a programmable, decentralized global computer.
  • Smart contracts are its soul: enabling code to execute automatically and trustlessly, creating infinite possibilities.
  • ETH is its blood and fuel: driving the entire ecosystem's operation.
  • It has given birth to new frontiers: DeFi, NFTs, DAOs (Decentralized Autonomous Organizations), and various other previously unimaginable new things are flourishing on this continent.

I hope this explanation gives you a general overview of Ethereum. It's complex, but the core idea is to use code and consensus to create a more open, transparent, and trustless world, free from intermediaries. Welcome to this new world!