What is Ethereum (ETH)?
Ethereum is a decentralized, open-source blockchain system featuring its native cryptocurrency, Ether (ETH). Serving as a platform for numerous other cryptocurrencies and the execution of decentralized smart contracts, Ethereum has become a cornerstone of blockchain innovation.
First conceptualized in a 2013 whitepaper by Vitalik Buterin, Ethereum secured funding through a public crowdsale in 2014 and officially launched its blockchain on July 30, 2015. Its mission? To create a global platform for decentralized applications (dApps) that resist censorship, downtime, and fraud.
👉 Discover how Ethereum powers decentralized finance
Key Features of Ethereum
Founders of Ethereum
Ethereum was co-founded by Vitalik Buterin alongside other visionaries like Gavin Wood, Joseph Lubin, and Charles Hoskinson. Their collective expertise in cryptography and blockchain technology laid the foundation for Ethereum's success.
What Makes Ethereum Unique?
- Smart Contract Functionality: Enables self-executing agreements without intermediaries.
- dApp Ecosystem: Hosts thousands of decentralized applications across industries.
- ERC-20 Standard: Facilitates token creation, fueling the ICO boom of 2017-2018.
ETH Supply and Distribution
- Circulating supply: ~120 million ETH (as of 2023)
- No fixed cap, unlike Bitcoin’s 21 million limit
- Annual issuance rate dynamically adjusted via EIP-1559
Ethereum 2.0: The Next Evolution
From Proof-of-Work to Proof-of-Stake
Ethereum 2.0 (now called the Ethereum Merge) represents a fundamental shift from energy-intensive mining to energy-efficient staking. This transition occurred in September 2022, merging Ethereum's execution layer with its new consensus layer.
Key Components of ETH 2.0
- The Beacon Chain: Launched in December 2020, introduced staking
- Shard Chains: Future scaling solution dividing the network into 64 chains
- Docking: The Merge event combining ETH1 and ETH2 systems
👉 Learn about Ethereum staking rewards
Ethereum FAQs
Will Proof-of-Stake end Ethereum mining?
Yes. The Merge completely eliminated GPU mining for ETH, though miners can shift to other PoW coins.
What happens to my existing ETH coins?
No action needed. All ETH balances automatically carried over to the new chain.
How does staking work?
- Validators lock 32 ETH to participate
- Earn ~4-7% annual rewards
- Withdrawals enabled after Shanghai upgrade (April 2023)
Will ETH 2.0 impact DeFi?
The upgrade improves scalability and reduces fees, potentially boosting DeFi adoption.
What are shard chains?
Sharding splits the network into parallel chains to increase throughput - expected in 2023-2024.
The Future of Ethereum
Vitalik Buterin envisions Ethereum as the foundation for a decentralized internet. With upcoming upgrades like:
- Proto-danksharding (EIP-4844)
- Full sharding implementation
- Continued layer-2 scaling solutions
Ethereum continues to evolve as the leading smart contract platform, maintaining its position at the forefront of blockchain innovation while addressing scalability and sustainability challenges.