3 min read

What on Earth Ethereum is?

What on Earth Ethereum is?
Photo by Nenad Novaković / Unsplash

Hey Lavneet, you know that guy Rahul who thinks he's an expert on all things crypto? Yeah, well, he keeps raving about Ethereum like it's the second coming of Bitcoin. Can you believe it?

Oh, totally, he is right about Ethereum. It's a decentralized platform that allows for the creation and execution of smart contracts. These smart contracts are self-executing contracts, with the terms of the agreement between buyer and seller being directly written into lines of code. This allows for the automation of contract execution, potentially reducing the need for intermediaries and increasing the efficiency and speed of executing contracts.

Further, Ethereum allows for the creation of decentralized applications (dApps) on its blockchain. These dApps are censorship-resistant and cannot be shut down by any single entity, making them a potentially valuable tool for a variety of use cases.

Whoa, whoa, slow down! We don't speak crypto here. Can you explain it in terms we can all understand?
Sure, no problem. Here's a conversation I had with Hiral a few months ago when she was just starting out with web3 and had a lot of questions.

Hir: Hey, what's this Ethereum everyone in the office is talking about?

Me: Ethereum is a blockchain, like the one that powers Bitcoin, but it's specifically designed for running smart contracts and developing dApps.

Hir: What are smart contracts? Do they only work with smart people or something?

Me: No, the contracts themselves are smart because they're self-executing and automatically enforce the terms of the agreement.

Smart contracts are essentially "If/Then" agreements that automatically execute a specific action when a certain condition is met. This eliminates the need for human intervention and ensures that the contract is executed as intended.

In other words, a smart contract is like a set of instructions that says "If X happens, then do Y." These contracts are executed automatically and can be used to automate a wide range of processes and transactions.

Hir: Okay, and what about these dApps?

Me: dApps, or decentralized applications, are collections of smart contracts that run on the blockchain. They provide similar functionality to traditional mobile or web apps, but are decentralized and run on a blockchain.

For example, you can use Ethereum's ENS domains to register a ".ETH" domain, like GOOGLE.ETH, which works like a website name but for your wallet address.

Hir: This sounds interesting. What else can I do with Ethereum?

Me: The possibilities are endless with Ethereum. You can create open finance applications, also known as Decentralized Finance (DeFi), on the Ethereum blockchain.

For example, you can check out Compound.Finance, which is a lending and borrowing platform that runs on the Ethereum chain, similar to a traditional bank. And that's just the tip of the iceberg. The sky's the limit when it comes to what you can do with Ethereum.

Hir: Ok, I now understand what Ethereum is. Is Bitcoin similar to Ethereum, can we run smart contracts on Bitcoin?

Me: Bitcoin and Ethereum are both decentralized, distributed cryptocurrencies. However, they have some key differences. You can't run smart contracts on Bitcoin because it was designed as a digital currency. Ethereum, on the other hand, is designed to support smart contracts and decentralized applications, giving it a wider range of potential use cases and more potential for long-term growth.

While there are some similarities between the two cryptocurrencies, they are distinct and have different goals and intended use cases.


Ethereum is a game-changing platform that has the potential to revolutionize a wide range of industries and applications. Its ability to automate complex processes and transactions through smart contracts makes it a valuable tool for streamlining supply chain management, voting systems, and even legal contracts.

Additionally, the growing number of decentralized applications (dApps) being built on the Ethereum platform demonstrates the potential for Ethereum to disrupt traditional industries and enable new forms of peer-to-peer interaction and value exchange. With a strong and active developer community, the future looks bright for Ethereum, and the potential uses for this technology are limitless.