This past week, I started the SheFi course— a program designed to help women dive deeper into Web3 and decentralized finance. One of the first topics it covered was Ethereum: what it is, why it matters, and how it fits into the broader decentralized ecosystem.
To build on what I learned there, I read two excellent overviews: “A Beginner’s Guide to Ethereum” from Coinbase and “Getting Up to Speed on Ethereum” by Matt. Both helped frame Ethereum not just as a cryptocurrency, but as a foundational platform for Web3 applications. Here’s what stood out and why Ethereum remains vital in a rapidly evolving cryptocurrency ecosystem.
Ethereum in a Nutshell
Ethereum is a decentralized computing platform. Think of it like a global computer that anyone can access, but no single person or organization controls it. This is possible because Ethereum is powered by a blockchain—a network of nodes around the world that maintain and validate a shared record of activity. What makes Ethereum special is that it doesn’t just store transactions; it can also run applications. These apps are powered by smart contracts, which are programs deployed to the blockchain that execute exactly as written.
The Ethereum network is designed to be open, programmable, and permissionless. That means anyone can build on it, and no one needs approval to use it. This structure has enabled Ethereum to become the foundation for a wide range of decentralized applications (dApps), including financial tools such as lending protocols and stablecoins, as well as NFT marketplaces and decentralized identity systems.
Why Ethereum Matters
Ethereum matters because it transforms the internet from a read-write platform into a read-write-execute environment. That is, it enables not just the sharing of information, but also the execution of logic—without relying on centralized intermediaries. This shift opens the door to creating systems that are more transparent, resilient, and accessible.
One of Ethereum’s most significant breakthroughs is that it allows developers to write and deploy their own logic onto the network through smart contracts. These contracts can define rules, manage value, and interact with other contracts—all while being trustless and tamper-proof. Once deployed, smart contracts can’t be changed or censored, which means users can interact with them without worrying about backend changes or manipulation.
Ether: The Fuel of the Ethereum Network
Ether (ETH) is the native currency of Ethereum. While many people think of ETH primarily as a cryptocurrency—something you can buy, sell, or hold—its most important role as the fuel for computation. Every operation on the Ethereum network costs gas, and ETH is what you use to pay for it. This is a crucial aspect of Ethereum’s security and incentive structure, ensuring that resources are utilized responsibly and the network remains resilient to spam.
When you send a transaction, deploy a smart contract, or interact with a dApp, you’re paying for the network to process that request. The more complex the operation, the more gas it consumes. Gas prices fluctuate based on network demand, and users can choose how much to pay to incentivize faster confirmation. This dynamic creates a market for block space, encouraging developers to write more efficient code.
The Power of Smart Contracts
Smart contracts are at the heart of what makes Ethereum powerful. These are self-executing programs that live on the blockchain and enforce rules automatically. You don’t need to trust a company or a person; you can trust the code. Smart contracts enable a wide range of use cases, including lending platforms like Aave, decentralized exchanges like Uniswap, and even games like Axie Infinity.
Once a smart contract is deployed, it’s public and verifiable. Anyone can inspect the code, interact with it, and build on top of it. This openness fosters a culture of composability—developers can plug into existing contracts, remix them, or build entirely new systems that work together. This is why Ethereum is often referred to as a “LEGO set for financial and digital tools.”
Ethereum Today and Tomorrow
Ethereum has come a long way since its launch in 2015. It’s no longer just a niche experiment; it’s the most widely used smart contract platform in the world. However, with that growth has come challenges. Network congestion and high gas fees have made it difficult for some users to interact with dApps affordably. To address these issues, Ethereum has undergone significant upgrades, most notably the transition from proof-of-work to proof-of-stake, known as “The Merge.”
Proof-of-stake is a consensus mechanism that allows Ethereum to secure the network using validators who lock up ETH rather than relying on energy-intensive mining. This shift has dramatically reduced Ethereum’s energy usage and paved the way for future scaling efforts, such as sharding and rollups. Rollups are a technique for batching many transactions into a single proof, which can then be submitted to the Ethereum mainnet. This helps scale the network without sacrificing security or decentralization.
The Ethereum ecosystem is also growing through layer 2 networks, which are built on top of Ethereum and handle transactions off-chain while still relying on Ethereum for settlement and security. Projects like Arbitrum, Optimism, and zkSync are working to make Ethereum faster and cheaper for everyday users.
How Ethereum Connects with Midnight
While Ethereum serves as the foundational smart contract platform for much of Web3, Midnight is designed to complement and extend its capabilities—especially in terms of privacy.
In practical terms, this means that developers who are comfortable with the Ethereum ecosystem —its wallets, development environments, and smart contract models—can interact with Midnight using similar patterns. For example, Midnight supports a Solidity-like programming approach through its Compact smart contract language, which compiles to verifiable circuits that enforce privacy constraints. This allows developers to build private versions of applications, such as voting systems, token transfers, and identity verification, that would typically be public on the Ethereum blockchain.
Ethereum offers programmability and decentralization, but by default, all on-chain transactions are transparent. Midnight fills in the missing privacy layer. You could imagine a workflow where public assets and smart contracts live on Ethereum, but sensitive data or confidential logic is handled by Midnight—bridging the two networks for richer, privacy-preserving applications.
Together, Ethereum and Midnight can be seen as complementary parts of a broader decentralized stack: Ethereum provides openness and composability, while Midnight adds selective disclosure and private computation, enabling developers to build secure and compliant applications in ways that Ethereum alone can’t.
Conclusion
Ethereum isn’t just a cryptocurrency—it’s a platform for building a new kind of internet. By combining programmable logic with decentralized infrastructure, Ethereum enables applications that are open, transparent, and user-owned. It’s the foundation of decentralized finance (DeFi), non-fungible tokens (NFTs), and numerous experiments in online interaction.
For me, starting with SheFi and reading through these resources helped ground my understanding of what Ethereum is and why it matters. It’s not just about buying coins—it’s about reshaping how we think about trust, ownership, and value in a digital world.
I’ll be back next week as I continue diving into the core building blocks of Web3. If you’re just starting out too, I highly recommend giving Coinbase’s primer and Matt’s breakdown a read.
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