Ethereum Price (ETH USD): Live Price Chart

Ethereum is a decentralized blockchain platform that allows for the creation and execution of smart contracts. Ether (ETH) is the native cryptocurrency of this platform. In the cryptocurrency market, Ether is second only to Bitcoin in terms of market capitalization. It's built on open-source software.

Ethereum was conceived in 2013 by programmer Vitalik Buterin. Other key figures involved in its creation include Gavin Wood, Charles Hoskinson, Anthony Di Iorio, and Joseph Lubin. Development work commenced in 2014 and was funded through crowdfunding, with the network launching on July 30, 2015. Ethereum enables anyone to deploy permanent, immutable decentralized applications (dApps) on its platform, allowing users to interact with them. Decentralized finance (DeFi) applications offer financial instruments that operate independently of traditional intermediaries like brokerages, exchanges, or banks. This facilitates borrowing against cryptocurrency holdings or lending them out for interest. Ethereum also enables users to create and exchange non-fungible tokens (NFTs), unique digital assets representing digital artwork or other items. Additionally, numerous other cryptocurrencies utilize the ERC-20 token standard on top of the Ethereum blockchain and have leveraged the platform for initial coin offerings (ICOs).

On September 15, 2022, Ethereum transitioned its consensus mechanism from Proof-of-Work (PoW) to Proof-of-Stake (PoS) in an upgrade process known as "The Merge." This transition has significantly reduced Ethereum's energy consumption by 99%.

Founding (2013–2014)

In 2013, Ethereum was first conceptualized by Vitalik Buterin, a programmer known for co-founding Bitcoin Magazine. Buterin's white paper presented the framework for decentralized applications using blockchain technology. He advocated for a more versatile language for app development to the Bitcoin Core team, emphasizing the potential to link tangible assets like stocks and real estate to the blockchain. Buterin's collaboration with eToro CEO Yoni Assia on the Colored Coins project, which aimed to expand blockchain's utility, ultimately led to the inception of Ethereum after the original project did not proceed as planned.

The official announcement of Ethereum took place at the North American Bitcoin Conference in Miami, in January 2014. Key figures such as Gavin Wood, Charles Hoskinson, and Anthony Di Iorio, who funded the project, joined Buterin in Miami to refine the vision for Ethereum. Joseph Lubin and journalist Morgen Peck were also present, with Peck documenting the event for Wired. The founding team reconvened six months later in Zug, Switzerland, where it was decided that Ethereum would move forward as a non-profit entity. Following this decision, Hoskinson departed to establish IOHK, a blockchain entity behind Cardano.

Ethereum boasts a notably extensive roster of founders. Anthony Di Iorio stated, "Vitalik Buterin, myself, Charles Hoskinson, Mihai Alisie, and Amir Chetrit were the original five who established Ethereum in December 2013. Early in 2014, Joseph Lubin, Gavin Wood, and Jeffrey Wilcke joined as co-founders." The name 'Ethereum' was selected by Buterin after perusing science fiction elements on Wikipedia, drawn to the term 'ether'—a theoretical substance thought to enable the propagation of light across the universe. Buterin envisioned Ethereum as a foundational, yet unnoticeable layer for the applications it supports.

In 2014, the formal development of Ethereum's underlying software commenced with Ethereum Switzerland GmbH (EthSuisse). Before the concept of executable smart contracts could be realized in software, it required clear definition. Gavin Wood, the then Chief Technology Officer, undertook this task in the Ethereum Yellow Paper, which delineated the Ethereum Virtual Machine. Following this, the Ethereum Foundation, a Swiss non-profit, was established. Funding for development came from a public online crowd sale during July to August 2014, where participants exchanged bitcoin for Ethereum's value token, ether. Although Ethereum was initially lauded for its technical ingenuity, there were also concerns regarding its security and potential for expansion.

Ethereum's story started in late 2013 when programmer and Bitcoin Magazine co-founder Vitalik Buterin outlined his vision in a white paper. This paper described a way to build decentralized applications, a concept Buterin believed blockchain technology could support beyond just digital currencies. He argued for a more powerful programming language within blockchain, one that could allow real-world assets like stocks and property to be linked to the blockchain.

In 2013, Buterin worked briefly with eToro CEO Yoni Assia on the Colored Coins project, drafting its white paper to explore broader blockchain applications. However, when they couldn't agree on the project's direction, Buterin proposed a new platform with a more robust scripting language – a Turing-complete programming language – that would eventually become Ethereum.

Ethereum was officially announced at the North American Bitcoin Conference in Miami in January 2014. At the conference, Gavin Wood, Charles Hoskinson, and Anthony Di Iorio (who financially backed the project) rented a house with Buterin to brainstorm Ethereum's potential. Di Iorio invited his friend Joseph Lubin, who in turn brought along reporter Morgen Peck. Peck later documented the experience in Wired magazine.

Six months later, the founders reunited in Zug, Switzerland, where Buterin decided to steer the project as a non-profit. Hoskinson left the project at this point, and shortly after founded IOHK, a blockchain company behind Cardano.

Ethereum boasts an unusually large group of founders. Anthony Di Iorio notes that "Ethereum was founded by Vitalik Buterin, Myself, Charles Hoskinson, Mihai Alisie & Amir Chetrit (the initial 5) in December 2013. Joseph Lubin, Gavin Wood, & Jeffrey Wilcke were added in early 2014 as founders."

Buterin chose the name "Ethereum" after searching through a list of elements in science fiction on Wikipedia. He explained, "I immediately realized I liked it better than the other alternatives; it sounded nice and included the word 'ether,' referring to the hypothetical invisible medium that permeates the universe and allows light to travel." Buterin envisioned his platform as the invisible foundation for applications running on top of it.

Development (2014)

Formal software development for Ethereum began in early 2014 through a Swiss company, Ethereum Switzerland GmbH (EthSuisse). The concept of executable smart contracts within the blockchain needed to be clearly defined before implementation. This work was done by Gavin Wood, then Chief Technology Officer, in the Ethereum Yellow Paper which specified the Ethereum Virtual Machine. Later, the Ethereum Foundation (Stiftung Ethereum), a Swiss non-profit organization, was established.

Funding for development came from a public online crowd sale from July to August 2014, where participants purchased the Ethereum value token (ether) using bitcoin. While Ethereum's technical innovations were lauded, concerns arose regarding its security and scalability.

Launch and the DAO Event (2014–2016)

Over 18 months in 2014 and 2015, the Ethereum Foundation developed several prototype versions of Ethereum, code-named and part of a proof-of-concept series. "Olympic" was the final prototype and public beta pre-release. Users were offered a bug bounty of 25,000 ether for stress-testing the Ethereum blockchain.

On July 30, 2015, "Frontier" officially marked the launch of the Ethereum platform, creating the platform's "genesis block."

Since its initial launch, Ethereum has undergone planned protocol upgrades, critical changes affecting the platform's underlying functionality and incentive structures. These upgrades are implemented through a hard fork.

In 2016, a decentralized autonomous organization called The DAO, a set of smart contracts built on Ethereum, raised a record $150 million through a crowd sale to fund its project. In June 2016, an unknown hacker exploited The DAO, stealing $50 million worth of DAO tokens. This event sparked debate in the crypto community about whether Ethereum should perform a controversial "hard fork" to recover the stolen funds. The fork ultimately led to the network splitting into two blockchains: Ethereum, with the theft reversed, and Ethereum Classic, which continued on the original chain.

Continued Development and Milestones (2017–Present)

In March 2017, several blockchain startups, research groups, and Fortune 500 companies announced the creation of the Enterprise Ethereum Alliance (EEA) with 30 founding members. By May 2017, the non-profit had grown to 116 enterprise members, including ConsenSys, CME Group, Cornell University's research group, Toyota Research Institute, Samsung SDS, Microsoft, Intel, J. P. Morgan, Cooley LLP, Merck KGaA, DTCC, Deloitte, Accenture, Banco Santander, BNY Mellon, ING, and National Bank of Canada. By July 2017, over 150 members had joined the alliance, including MasterCard, Cisco Systems, Sberbank, and Scotiabank.

CryptoKitties and the ERC-721 NFT Standard

In 2017, CryptoKitties, a blockchain game and decentralized application (dApp) featuring digital cat artwork as NFTs, was launched on the Ethereum network. Its popularity with users and collectors garnered significant mainstream media attention, further exposing Ethereum to a broader audience.

It became the most popular smart contract on the network, though it also highlighted Ethereum's scalability concerns due to the game's heavy network usage.

In January 2018, a community-driven paper, an Ethereum Improvement Proposal (EIP), called ERC-721: Non-Fungible Token Standard was published, led by civic hacker and lead author William Entriken. This paper introduced ERC-721, the first official NFT standard on Ethereum. This standardization positioned Ethereum as central to a multi-billion dollar digital collectibles market.

Continued Developments

By January 2018, ether was the second-largest cryptocurrency in terms of market capitalization, trailing behind bitcoin. This relative position continued as of 2021.

In 2019, Ethereum Foundation employee Virgil Griffith was arrested by the US government for presenting at a blockchain conference in North Korea. He later pleaded guilty to one count of conspiring to violate the International Emergency Economic Powers Act in 2021.

In March 2021, Visa Inc. announced it had begun settling stablecoin transactions using Ethereum. In April 2021, JP Morgan Chase, UBS, and MasterCard announced they were investing $65 million into ConsenSys, a software development firm building Ethereum-related infrastructure.

Two network upgrades occurred in 2021. The first was "Berlin," implemented on April 14, 2021. The second was "London," which took effect on August 5. The London upgrade included Ethereum Improvement Proposal (EIP) 1559, a mechanism for reducing transaction fee volatility. This mechanism causes a portion of the ether paid in transaction fees for each block to be destroyed rather than given to the block proposer, reducing ether inflation and potentially leading to deflationary periods.

On August 27, 2021, the blockchain experienced a brief fork caused by clients running incompatible software versions.

Ethereum 2.0

Ethereum 2.0 (Eth2) was a series of three or more upgrades, also known as "phases," designed to transition the network's consensus mechanism to proof-of-stake and to scale the network's transaction throughput with execution sharding and an improved EVM architecture.

The switch from proof-of-work to proof-of-stake on September 15, 2022, significantly reduced Ethereum's energy usage by 99%. This upgrade, known as "The Merge," was the first phase in the series of upgrades. However, the impact on global energy consumption and climate change may be limited because computers previously used for mining ether could be used to mine other energy-intensive cryptocurrencies.

On March 13, 2024, the second phase, known as "Dencun" or "Deneb-Cancun," went live. This upgrade lowered transaction fees on the many Layer 2 networks built on top of the base Ethereum blockchain.

Ethereum, with its Turing-complete EVM instruction set, has found widespread use in various applications. These include the creation of fungible (ERC-20) and non-fungible (ERC-721) tokens, crowdfunding through initial coin offerings, decentralized finance, decentralized exchanges, decentralized autonomous organizations (DAOs), gaming, prediction markets, and gambling.

Smart contracts on Ethereum are written in high-level programming languages, compiled into EVM bytecode, and deployed to the blockchain. Solidity, Serpent, Yul, LLL, and Mutan are some of the languages used, each with its own characteristics. Source code and compiler details are usually published to ensure transparency and verifiability.

However, the public nature of blockchain exposes vulnerabilities to bugs and security flaws, making it difficult to address them quickly. The 2016 attack on The DAO exemplifies this challenge.

ERC-20, a token standard proposed by Fabian Vogelsteller, facilitates the creation of fungible tokens on Ethereum. This standard defines functions for transferring tokens, checking balances, and managing the total supply. ERC-20 Token Contracts adhere to these standards and track token creation. Many cryptocurrencies have launched as ERC-20 tokens and been distributed through ICOs.

Ethereum also supports the creation of unique, indivisible tokens called non-fungible tokens (NFTs). ERC-721, the first official NFT standard, and ERC-1155, which introduced semi-fungibility, are widely used. NFTs have found applications in representing collectibles, digital art, sports memorabilia, virtual real estate, and in-game items.

Decentralized finance (DeFi) provides financial services in a decentralized environment, offering users control over their assets. DeFi applications are typically accessed through web3-enabled browser extensions like MetaMask, allowing direct interaction with the Ethereum blockchain. These applications can connect and collaborate to provide complex financial services. Platforms like MakerDAO and Uniswap exemplify DeFi's growth.

Ethereum's versatility has led to its adoption by enterprise software companies, including Microsoft, IBM, JPMorgan Chase, Deloitte, R3, and Innovate UK. Barclays, UBS, Credit Suisse, Amazon, and Visa are among those experimenting with Ethereum.

Permissioned blockchain variants based on Ethereum are being explored for various projects. JPMorgan Chase's JPM Coin, built on a permissioned variant called Quorum, aims to balance regulatory requirements with privacy concerns.

Ethereum's transaction throughput has been a topic of discussion. While it can process approximately 25 transactions per second, this pales in comparison to the Visa network's 45,000 transactions per second. To address this scalability issue, proposals like sharding have been introduced, aiming to partition global state and computation into shard chains.

Ethereum's blockchain utilizes a Merkle-Patricia Tree for storing account state in each block. This data structure facilitates storage savings, proof generation, and efficient synchronization. However, the network has faced congestion issues, particularly during events like the CryptoKitties craze in 2017.