Ethereum is an **open-source blockchain** platform that is decentralized and programmable. Unlike Bitcoin, which was initially designed as an alternative digital currency, Ethereum was created as a platform to run **smart contracts** and **decentralized applications (dApps)**.

Often referred to as the "World Computer," Ethereum enables developers to build various financial services, games, and social networks on its infrastructure without central authority.
### Main Components of Ethereum
* **Ether (ETH):** This is the native cryptocurrency of the Ethereum network. ETH is used to pay transaction fees (often called "gas") and as collateral in the network's security mechanisms.
* **Smart Contracts:** Computer programs stored on the blockchain that automatically execute when certain conditions are met. This eliminates the need for third-party intermediaries.
* **Ethereum Virtual Machine (EVM):** The software environment where all smart contracts are executed. The EVM ensures that the same code runs identically on every computer (node) in the network.
* **Proof of Stake (PoS):** The consensus mechanism used by Ethereum (after transitioning from Proof of Work) to secure the network through *staking*, which is much more energy-efficient.
### What Can You Do on Ethereum?
Ethereum has become the foundation for various innovations in technology and finance:
1. **Decentralized Finance (DeFi):** Banking services such as lending, trading, and insurance that operate without traditional banks.
2. **NFTs (Non-Fungible Tokens):** Unique tokens representing ownership of digital or physical assets, such as artwork, music, or property in games.
3. **DAO (Decentralized Autonomous Organizations):** Organizations managed by code and token-holder communities, rather than traditional leadership structures.
Main Differences
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