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What Is Ethereum—ETH, Simply Explained By Swaps

Published
December 14, 2023
Updated
October 27, 2023
< 3 min read

The second biggest cryptocurrency, the smart-contract giant, and the most significant altcoin—are just a few of the most famous names for Ethereum. In this article, we’ll explain everything you need to know about this token and uncover some aspects unknown to the masses.

What is Ethereum (ETH)?

Ethereum is a decentralised blockchain ecosystem infamous for inventing and implementing smart contracts and decentralised applications (explained later) for the first time. Founded by Vitalik Buterin, Ethereum launched in 2015 and has increased in popularity. Nowadays, it is an incredibly versatile ecosystem that supports a wide variety of features and entire sub-systems of other crypto tokens built on its blockchains, such as Uniswap (UNI), Shiba Inu (SHIB), Decentraland (MANA), or even a hefty portion of Tether (USDT).

What are Ethereum smart contracts?

In a nutshell, smart contracts are automated code running on a blockchain. They can perform many predetermined actions if their specific triggering criteria are fulfilled. Let’s see an example. Users want to agree on getting payment from each other, but they lack mutual trust. A smart contract can become the ultimate solution by enforcing the result: if Person A sends the funds, it will automatically take Person B’s due amount. Additionally, the recently popularised Non-Fungible Tokens (NFTs) are also secured and created via smart contracts—more on them later.

Smart contracts have much broader and more complex utility, stretching from encoding healthcare records to agriculture, finance, and governance.

What is important to note once more at this stage is that Ethereum is the go-to blockchain for smart contracts today.

What are Ethereum decentralised applications?

Decentralised applications (dapps) are like traditional software run entirely on a decentralised blockchain. Usually, dapps are built using a set of smart contracts that enable various features and functions, such as trading, gaming, collecting, and many more. Notable examples built on Ethereum include the world’s leading decentralised exchange, Uniswap (UNI), and famous games like CryptoKitties.

Bonus: NFTs and Ethereum

Editorial credit: Hasbi Sahin / Shutterstock.com

You’ve probably heard about Non-Fungible Tokens (NFTs) already, but what do they have to do with Ethereum? As you’ve seen, NFTs are mostly digital art—such as the Bored Ape Yacht Club—that are selling for millions nowadays, but not many know that most of these famous pieces are created and sold on Ethereum, using its native token, ETH. This potentially means that the more popular NFTs are, the more they could drag Ethereum with them indirectly.

Summary and final thoughts

Ethereum is one of the most significant blockchain ecosystems in the crypto world. With its revolutionary smart contracts, decentralized applications, and NFTs, it would be surprising not to see this giant among the top cryptocurrencies for an extended period. We can’t tell if it’s the right time to buy Ethereum (ETH), but whenever you’re ready to join its grand journey, go to Swaps App to get your ETH faster and easier than anywhere else.

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