From Digital Money to Programmable Money
Bitcoin proved you could move money across the internet without a bank. Ethereum, launched in 2015, went a step further: it introduced a general-purpose computer inside a blockchain. Anyone can write and deploy programs — called smart contracts — that live on the network permanently and execute automatically when their conditions are met.
That single change created an entirely new financial stack. Lending platforms, exchanges, stablecoins, NFTs, prediction markets, DAOs and payroll systems today run as smart contracts on Ethereum, moving hundreds of billions of dollars each year without a single intermediary approving individual transactions.
How Smart Contracts Work
A smart contract is simply code stored on the blockchain. When a user sends a transaction that calls a contract, every node on the network executes the same code with the same input and reaches the same output. This determinism is what allows strangers to transact with contracts without needing to trust them.
For example, a decentralised exchange contract can hold two pools of tokens and automatically quote a price using a mathematical formula. Anyone can swap against it, and settlement happens in a single transaction. No order book, no broker, no clearing house.
Ether, Gas and Fees
Every operation on Ethereum consumes computational resources measured in units called gas. Users pay for gas in ether (ETH). This creates a market for block space: when demand rises, gas prices rise; when the chain is quiet, fees fall. It is also what prevents infinite loops and denial-of-service attacks — every action has a cost.