Ethereum Explained: Ether, DApps, and Eth2

Key concepts

How DApps and smart contracts work

  • Decentralized finance services — blockchain-based borrowing and lending (Compound, Aave), decentralized token exchanges (Uniswap, Sushiswap).
  • Blockchain-based games and their native tokens (Axie Infinity, Sandbox, Decentraland).
  • NFT marketplaces (OpenSea, Rarible).
  • They are trustless. Unfamiliar users don’t have to trust each other to interact: they only have to believe that the smart contract operates properly. Good protocols and their contracts are trusted by the community and are proven to be secure through audits.
  • They are irreversible, immutable, and transparent. As soon as the contract’s conditions are met, the deal will execute without the possibility to reverse. Its records will stay in the blockchain forever, and everyone can see them.
  • They offer clear rules of the game. In regular contracts run by people, there is always room for maneuver regarding what parts of the deal to execute and how. Disputes are resolved in court. In smart contracts, all conditions are clearly described, and once they are fulfilled, the deal executes according to the “all or nothing” principle.

Ethereum gas and transaction fees explained

Ethereum vs Bitcoin

Ethereum and ICOs

Why Ethereum 2.0? Scalability, security, and sustainability

Eth2 roadmap

  1. Beacon chain. This is the Ethereum blockchain that runs on the PoS consensus. Its implementation is referred to as Phase 0 of the Eth2 roadmap, and the chain has already been launched. However, the main Ethereum chain remains PoW at the time of writing.
  2. Merge. This is an event scheduled for 2022 when the PoW Ethereum 1.0 mainnet will merge with the Beacon chain, and the platform will mark the full transition to PoS. The Merge will open the door for the implementation of sharding.
  3. Sharding. This is the key solution for improving Ethereum’s throughput (scalability). Sharding spreads Ethereum across 64 separate shard chains that run in a relatively autonomous way. This allows processing far more transactions than originally.

Ethereum hard forks: from Berlin to Altair

Bottom line

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