I won’t be going into Merkle trees, hashes, mining & how it all fits to make up the blockchain because there are plenty of existing materials explaining this. What I want to do here is give a high-level overview of the importance of this technology.
One of the main breakthroughs that Bitcoin made was to enable scarcity in the digital realm. Whereas previously, anything digital could just be copied & pasted - bitcoin couldn't.
Combined with the fact that it has no admin that can just decide to mint more coins outside the prescribed rules of the game, seize your funds or alter the history; it made bitcoin the first global currency that isn’t issued by any nation-state.
But, you know, it's still just a currency. You can send it, you can receive it, but that’s about it. Then along came a young wizard named Vitalik, thinking something like: “We should take this blockchain thing & allow people to program it to do anything.”
Now we have what is basically an admin-less database, able to run any arbitrary function. This allows us to build a data infrastructure layer that isn’t controlled by any centralized entity. These so-called smart-contracts allow you to enter agreements & exchange value with strangers, resting assured they can’t screw you over.
Do you see how powerful this is?
The inability to make databases talk to each other enabled centralized middlemen such as Visa to sweep in, monopolize and start taking something like 1.5% off each transaction for being the global settlement layer between bank accounts; Paypal did the same for the online realm.
These were necessary evils; no longer necessary. Running on Ethereum, services of the future will not only be interoperable but composable. Imagine talking to your friends, ordering a new laptop & investing; all through a single interface.
You will often hear us refer to this whole space as Web3 - the next era of the internet. While the Web2 era was dominated by huge centralized service providers such as Amazon, Facebook & Uber, the promise of Web3 is an internet of decentralized peer-to-peer protocols, platforms & applications; tokenized & in the hands of their users.
"Ethereum is a game-changing technology." - Virgil Griffith
Tbh nowadays it’s hard to beat Ethereum.org as your go-to place for learning about Ethereum.
The real question is not “What is Ethereum?” but “What can we do with it?” We split it into three main areas of interest. Brief for now, because each deserves its own page.
Tokens on Ethereum allow anyone to start their own cryptocurrency, except currencies are like the least exciting possibility. Tokens can represent your stake in an organization, any physical or digital resource, or an asset, like a house or a rare collectible.
dApps are decentralized applications running on Ethereum. They are basically collections of interlocking smart contracts used to deliver a product or a service that, at least in theory, doesn’t require you to trust the company behind it, and cannot be shut down or hacked.
DeFi or "decentralized finance" is all about building a decentralized financial system using Ethereum or other blockchains as the core infrastructure. Traditionally managed by big financial institutions, DeFi is about creating services that provided peer-to-peer, mediated by the blockchain & giving the power to the people. Full post on DeFi here.
DAOs (decentralized autonomous organizations), are organizations running on Ethereum. The tooling around them is still crude & mainly allows management of decentralized treasuries through voting. Full post on DAOs here.
Since transaction throughput on Ethereum can only scale so much so far, without fees getting exorbitant - Layer 2 is a collective term for solutions designed to help scale Ethereum by handling transactions off the main Ethereum chain (layer 1) aka "mainnet". Read more in House of L2s.
There are essentially two ways of obtaining Ether; buying it & earning it.
There are a bunch of wallets to choose from. Your decision will mainly depend on whether you are optimizing for security or accessibility.
NOTE: TAKE IT REALLY SERIOUSLY. STORE YOUR SEED PHRASE PHYSICALLY, NEVER COPY, PASTE OR ENTER IT ANYWHERE NEW