Ethereum & Tokens: Programmable Money
Ethereum went beyond Bitcoin by adding smart contracts—programmable code that runs automatically.
What is Ethereum?
Ethereum is a blockchain that lets developers build applications on top of it. Instead of just storing transaction data like Bitcoin, Ethereum can execute complex programs.
Smart Contracts
Smart contracts are self-executing programs on the blockchain. When conditions are met, they execute automatically without needing intermediaries.
Example: An insurance contract that auto-pays if a flight is delayed (using flight data feeds).
ERC-20 Tokens
ERC-20 is a standard for creating tokens on Ethereum. Think of it as the "format" that all tokens follow so wallets and exchanges can recognize them.
- Each token has supply, decimals, and an owner
- Can represent anything: stablecoins, governance, utility, art
- Easy to create, which is why there are thousands
dApps & DeFi
dApps: Decentralized applications running on Ethereum (no single company controls them).
DeFi: Decentralized Finance—lending, borrowing, swaps without banks. Usually built on Ethereum.