What is Ethereum & how does it work?

Founded by Vitalik Buterin and Gavin Wood in 2015, today Ethereum’s market capitalization represents approximately 20% of the $1.1 trillion global crypto market. There are some distinct differences between Ethereum and the original crypto. Unlike Bitcoin (BTC), Ethereum is intended to be much more than just a medium of exchange or a store of value.

Is Ethereum a proof-of-stake?

Ethereum’s transition to the proof-of-stake protocol, which enables users to validate transactions and mint new ETH based on their ether holdings, is part of a significant upgrade to the Ethereum platform. Previously called Eth2, this upgrade is now referred to only as Ethereum. However, Ethereum now has two layers.

What are the limitations of Ethereum?

The most significant limitation of Ethereum - like with Bitcoin - is its scalability, which, as with Bitcoin, is hard to achieve without sacrificing decentralisation or security, Fiat currency achieves security and scalability but sacrifices decentralisation to do so.

What is the Ethereum Virtual Machine?

The Ethereum Virtual Machine is an example and is described as the ‘wworld computer’ as it is intended to be able to support any computational problem, though it isn’t infinitely scalable. All that ‘Turing complete’ means is that Solidity is a programming language capable of programming for any hypothetical computation.