Ethereum and the EVM
Bitcoin was designed for one thing: digital currency. ETHEREUM was designed to be PROGRAMMABLE. Launched in 2015 by Vitalik Buterin and others, Ethereum is a blockchain that runs PROGRAMS called SMART CONTRACTS. Anyone can write a contract; once deployed, it executes automatically when conditions are met. This unlocks decentralized apps (dApps), tokens, NFTs, decentralized finance (DeFi), and more.
The EVM (Ethereum Virtual Machine) is Ethereum's virtual computer. It runs smart contracts on every Ethereum node simultaneously, in deterministic agreement. Contracts are written in languages like SOLIDITY, compiled to EVM bytecode, and deployed to the blockchain. They cost GAS (a small fee paid in ETH) to run — preventing infinite loops and DOS attacks. Many other blockchains (Polygon, BNB Chain, Arbitrum) also run EVM-compatible code, making Ethereum a kind of standard.
What is a SMART CONTRACT?
Tradeoffs. POSITIVES: programmability creates massive innovation; trustless transactions; financial primitives (lending, swapping) without banks. NEGATIVES: smart contracts have BUGS that cost users millions when exploited; gas fees can be high; complexity is intimidating; many projects are scams. The technology is real and powerful, but the ecosystem requires careful navigation.
Read a Contract
Visit etherscan.io. Search for any popular Ethereum address (try "USDC token contract"). Click "Contract" tab. You're looking at the actual code running. Most is open source — the future of finance is being written in public.
Ethereum is more than money — it's a global programmable platform. Whether it remains the leader or gets passed by competitors, smart contract blockchains are likely to be a long-term technology category.
Want to keep learning?
Sign up for free to access the full curriculum — all subjects, all ages.
Start Learning Free