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Ethereum and smart contracts
July 2015· Asset or instrument
Fact, law or dataA rule, statute, definition or measured number.
A programmable blockchain, launched in 2015, that runs 'smart contracts'; its token, ether, is the second-largest cryptocurrency.
See it on the Money & Finance map →How it works
Proposed by Vitalik Buterin in 2013, Ethereum lets developers put code on the blockchain that runs automatically when conditions are met: lending pools, exchanges, NFTs and most stablecoins are built this way. Users pay small fees in ether ('gas'). In 2016 a hack of 'The DAO' fund led to a split of the chain. In September 2022 'the Merge' replaced energy-hungry mining with 'proof of stake', where holders lock up ether to validate transactions, cutting energy use about 99.9%.
Why it matters
It turned crypto from a single coin into a platform for financial apps ('DeFi') and tokenized assets.
Think of it like
A smart contract is like an escrow agent that releases funds at closing once every condition is verified, except no agent is involved.
Facts, rules and data
Buterin's white paper, the public blockchain and Ethereum Foundation records of each upgrade; independent researchers estimated the Merge's energy cut.
Debates and risks
Whether 'code is law' holds when bugs are exploited, since billions have been lost to smart-contract hacks, and whether faster rivals overtake it.
Connections (2)
▸Ethereum and smart contracts hosts many Stablecoins: crypto tokens pegged to a currencyFact, law or data
The connection
Most stablecoins are smart-contract tokens: a program on Ethereum records who owns how many and lets the issuer create ('mint') or destroy ('burn') tokens as dollars come in or go out. Ethereum's lending and trading apps then use them as cash. Roughly half of all stablecoin value sits on Ethereum, with Tron second, mostly for Tether.
When and why
USDC launched on Ethereum in 2018; Tether, begun on a bitcoin-based layer in 2014, moved largely to Ethereum and Tron from 2017 to 2019.
How we know
Public blockchain data and issuers' transparency pages show token supply on each network.
Debates and risks
Whether cheaper, faster networks, or new issuer-run chains such as Circle's Arc and Stripe's Tempo announced in 2025, will draw stablecoins away.
▸Ethereum and smart contracts is the second-largest CryptocurrencyFact, law or data
The connection
Bitcoin is mainly a coin; Ethereum added a general-purpose computer running on a blockchain. That opened crypto to lending and trading apps ('DeFi'), NFTs and tokens issued by others on its network. Its token, ether, ranks second to bitcoin by market value, at roughly a tenth to a quarter of bitcoin's size in 2025.
When and why
Vitalik Buterin's 2013 white paper; launched July 30, 2015; switched to proof of stake in September 2022; US spot ether ETFs from July 2024.
How we know
Market data from CoinGecko and CoinMarketCap; the public blockchain records every contract and transaction.
Debates and risks
US regulators long disagreed on whether ether is a commodity or a security, and faster rivals such as Solana compete for its role.