Part III · 2 — Ethereum and the alternative L1s

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If Bitcoin is money, Ethereum is a world computer: a blockchain that runs programs. That generality founded everything that came after — DeFi, NFTs, DAOs — and defined the trade-off the alternative L1s try to rebalance.

2.1 Ethereum: the world computer

Ethereum (2015) generalized the blockchain from a "money ledger" to a "programmable state machine". Its core pieces:

Account model (Part I) —
each address has a balance and storage, updated with every transaction.
EVM (Ethereum Virtual Machine) — a Turing-complete virtual machine that
executes smart contracts: code that lives on the chain and runs exactly as written, unable to be stopped by third parties.
Gas — since the code can be arbitrary, each operation costs gas (paid in
ETH), which prevents infinite loops and prices network usage. EIP-1559 (2021) made the base fee predictable and burns part of it.

In 2022 Ethereum migrated to Proof of Stake (the Merge) and has since optimized to be the settlement layer for an L2 ecosystem (next section) — EIP-4844 (2024) created cheap blobs for rollups.

2.2 The smart contract, in one sentence

A smart contract is a program published on the chain, with its own address and state, that anyone can call and whose result is guaranteed by consensus. It is what enables composability — protocols that fit together like "money legos", one's output becoming another's input. This fitting-together is the source of the DeFi explosion (Part IV) — and also of the surface for very expensive bugs (reentrancy, overflow), since the code is immutable and moves real money.

2.3 The alternative L1s and what each one rebalances

The Ethereum L1 prioritizes decentralization and security, at the cost of throughput and fees. Each "Ethereum killer" rebalances the trilemma in a different way:

Family	Bet	Trade-off
Solana	very high throughput (parallelism, Proof of History)	fewer validators; higher hardware requirements
Cosmos / Polkadot	app-chains: each app is its own chain, interconnected	less shared security (each chain defends itself)
Cardano	formal rigor (proven Ouroboros, eUTXO)	slower evolution
Sui / Aptos	object model (Move language)	new ecosystem

There is no absolute "best" — each chooses a different point on the trilemma. Ethereum's dominant trend, however, is not to compete on throughput at the L1, but to scale on top with L2 — the final topic of this part.

Dense reference: EVM, EIPs, account abstraction, Beacon Chain, and the complete catalog of alternative L1s in 05-l1-ethereum and 06-l1-alt. Next: L2 and scaling — how to grow without sacrificing the L1's security.