Ethereum

What is Ethereum?

Ethereum is a decentralized, open-source blockchain platform that enables the creation and execution of smart contracts and decentralized applications (dApps). It was proposed in late 2013 by programmer Vitalik Buterin and development was crowdfunded in 2014, with the network going live on July 30, 2015.‍

Key Features of Ethereum:

1. Smart Contracts: Ethereum introduced smart contracts, which are self-executing agreements based on predefined conditions. They enable trustless interactions and automate processes.
2. Decentralization: Ethereum operates on a decentralized network of computers (nodes), enhancing security and preventing single points of control.
3. Ether (ETH): As Ethereum’s native cryptocurrency, ETH serves multiple purposes, including transaction fees, value transfer, and store of value.

Key Use Cases of Ethereum:

Ethereum is used for building decentralized applications, enabling automated trustless agreements through smart contracts, and experimenting with new blockchain-based solutions in various industries.

1. Decentralized Finance (DeFi): Ethereum powers various DeFi platforms, allowing users to borrow, lend, trade, and earn interest without intermediaries.
2. Non-Fungible Tokens (NFTs): Ethereum hosts NFTs, unique digital assets representing ownership of art, collectibles, and virtual real estate.
3. Gaming and Virtual Worlds: Developers create blockchain-based games and virtual worlds on Ethereum, enabling true ownership of in-game assets.

ELI5 of Ethereum

Ethereum is like a giant, global computer that anyone can use to build and run programs. Instead of being controlled by one company, it's run by lots of different people all over the world. These programs, called smart contracts, automatically do things when certain conditions are met, like sending money when a task is done. Ethereum also has its own money, called Ether, which people use to pay for using the computer.

How Many Nodes are Now Decentralizing Ethereum?

As of mid-2024, Ethereum typically has around 5,000 to 7,000 active nodes globally. These nodes contribute to the network's decentralization, security, and resilience by validating transactions and maintaining a synchronized copy of the blockchain.

The Ethereum Virtual Machine (EVM) is a runtime environment for executing smart contracts on the Ethereum blockchain. It is a decentralized computer that allows developers to create decentralized applications (dApps) and run code exactly as programmed without any possibility of fraud, censorship, or third-party interference.

What is Solidity?

Solidity is a high-level programming language for writing smart contracts on Ethereum.

FAQs on Ethereum Accounting with Cryptoworth

Can I track ETH holdings and DeFi activity on Ethereum with Cryptoworth?

Yes. Cryptoworth supports Ethereum wallets, smart contract activity, and DeFi protocols. It categorizes income, expenses, and transfers across multiple dApps, giving accountants full transparency for financial reporting. See how Cryptoworth supports full-chain accounting.

How does Cryptoworth value ETH transactions for reporting purposes?

Cryptoworth uses accurate historical market data to assign fiat values to each ETH transaction. This enables reliable cost basis tracking and financial statement generation, compliant with accounting standards.

Does Cryptoworth integrate Ethereum data with general ledger software?

Absolutely. All Ethereum-based transactions can be exported in journal-entry format to platforms like Xero and QuickBooks. Cryptoworth helps accounting teams reconcile crypto activity faster. Learn about our GL-ready reporting features.