Launched in 2015, Ethereum became the second-largest cryptocurrency offering smart contracts and decentralized applications.
The Origins of Ethereum
The story of Ethereum begins with Vitalik Buterin, a young programmer and Bitcoin Magazine co-founder, who envisioned a platform capable of more than just digital currency transactions. In late 2013, Buterin published the Ethereum whitepaper, proposing a blockchain platform that could execute programmable smart contracts and host decentralized applications. The project gained support from co-founders including Charles Hoskinson, Gavin Wood, and Joseph Lubin. After a successful crowdfunding campaign in 2014 that raised approximately $18 million, Ethereum officially launched on July 30, 2015, introducing its native cryptocurrency, Ether (ETH).
How Ethereum Works
At its core, Ethereum is a decentralized, open-source blockchain platform that enables the creation and deployment of smart contracts and decentralized applications. Unlike Bitcoin, which primarily serves as a digital currency, Ethereum's blockchain acts as a global, decentralized computing platform.
Smart contracts are self-executing programs that automatically implement the terms of an agreement when predetermined conditions are met. These contracts run on the Ethereum Virtual Machine (EVM), facilitating numerous applications, from DeFi protocols to NFTs.
The Ethereum Virtual Machine serves as the computational engine of Ethereum, processing and validating all transactions and smart contract interactions across the network, maintaining the integrity and security of the blockchain.
Transition to Proof-of-Stake
One of Ethereum's most significant developments was the successful completion of the transition to Proof-of-Stake in September 2022. This upgrade changed the network's consensus mechanism from Proof-of-Work to Proof-of-Stake, dramatically reducing the network's energy consumption.
Under the new PoS system, validators secure the network by staking ETH rather than solving complex mathematical puzzles. This transition made Ethereum more environmentally sustainable and introduced new economic incentives for network participants through staking rewards.
Ethereum remains a leading blockchain project, having a significant impact on the digital economy and enabling innovations across various sectors.
