May 31, 2022 • 30 min read In the years following the invention and launch of bitcoin in 2009, digital assets largely represented a single value proposition. Most non-bitcoin tokens launched in the years after offered what many industry analysts have characterized as an inferior and undifferentiated version of bitcoin’s value proposition. That perception in the marketplace changed in 2015 with the release of the Ethereum protocol. A digital asset exhibiting alternative value propositions to bitcoin and a wide array of potential use cases emerged. This launch spawned a new era in digital assets featuring increased innovation, competition, and tradeoffs as well as new potential use cases. This paper will introduce the Ethereum ecosystem and is intended as a primer for those interested in learning about the basics of Ethereum and its potential investment thesis. Specifically, this paper will cover what Ethereum is, some of its history, its value proposition, and risks. We believe it would be very beneficial for readers to have an understanding of Bitcoin as a foundation before exploring Ethereum in detail, so we provide background on some of Bitcoin’s key features as a point of comparison throughout the paper to help explain what we believe Ethereum is and isn’t. The points below highlight some of our main takeaways: Ethereum is a digital asset network whose main value proposition is derived from its programmability. Ethereum features an open-ended architecture in hopes of attracting developers able to build useful applications and drive demand for use of the Ethereum network and its native token, ether. Fidelity Crypto LC does not consider the Ethereum and Bitcoin networks to exist within the same category. We believe the Bitcoin network is best understood as fulfilling a monetary use case, while the Ethereum network has made tradeoffs to compete for other potential use cases. The Ethereum roadmap is ambitious, with plans this year and next to move to a new consensus mechanism as well as plans to improve scaling. This may bring about large improvements and open the ecosystem to new opportunities as well as large risks. Download the Full Report. Share: Download Article The information herein was prepared by Fidelity Digital Asset Services, LLC and Fidelity Crypto LC, Ltd. It is for informational purposes only and is not intended to constitute a recommendation, investment advice of any kind, or an offer or the solicitation of an offer to buy or sell securities or other assets. Please perform your own research and consult a qualified advisor to see if digital assets are an appropriate investment option. Custody and trading of digital assets are provided by Fidelity Digital Asset Services, LLC, a New York State-chartered, limited liability trust company (NMLS ID 1773897) or Fidelity Crypto LC, Ltd. Fidelity Crypto LC, Ltd. is registered with the U.K. Financial Conduct Authority for certain cryptoasset activities under the Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017. The Financial Ombudsman Service and the Financial Services Compensation Scheme do not apply to the cryptoasset activities carried on by Fidelity Crypto LC, Ltd. This information is not intended for distribution to, or use by, any person or entity in any jurisdiction or country where such distribution or use would be contrary to local law or regulation. Persons accessing this information are required to inform themselves about and observe such restrictions. Digital assets are speculative and highly volatile, can become illiquid at any time, and are for investors with a high-risk tolerance. Investors in digital assets could lose the entire value of their investment. Fidelity Digital Asset Services, LLC and Fidelity Crypto LC. Ltd. do not provide tax, legal, investment, or accounting advice. This material is not intended to provide, and should not be relied on, for tax, legal, or accounting advice. Tax laws and regulations are complex and subject to change. You should consult your own tax, legal, and accounting advisors before engaging in any transaction. Some of this information is forward-looking and is subject to change. Past performance is no guarantee of future results. Investment results cannot be predicted or projected. Fidelity Crypto LC and the Fidelity Crypto LC logo are service marks of FMR LLC. © 2022 FMR LLC. All rights reserved. 1031425.1.0