What is Ethereum?
Ethereum, denoted by its cryptocurrency Ether (ETH), stands as a decentralized open-source blockchain network renowned for its capacity to serve as both a cryptocurrency and a platform for executing decentralized smart contracts. This innovative blockchain concept was initially outlined in a 2013 whitepaper authored by Vitalik Buterin.
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With the collaborative efforts of Buterin and a group of co-founders, the project was able to secure funding through a public online crowd sale in the summer of 2014. The fundraising endeavor yielded a remarkable $18.3 million in Bitcoin, with the Initial Coin Offering (ICO) pricing Ether at $0.311 per token, resulting in a staggering annualized return on investment (ROI) exceeding 270%. This equates to nearly quadrupling the initial investment each year since the summer of 2014.
The Ethereum Foundation formally inaugurated the blockchain on July 30, 2015, code-named “Frontier.” Since its inception, ETH has undergone numerous network updates, including “Constantinople” on Feb. 28, 2019, “Istanbul” on Dec. 8, 2019, “Muir Glacier” on Jan. 2, 2020, “Berlin” on April 14, 2021, and most recently, the “London” hard fork on Aug. 5, 2021.
Ethereum’s overarching mission is to establish itself as a global hub for decentralized applications, providing a platform for users worldwide to create and operate software that is resilient against censorship, downtime, and fraudulent activities.
Ethereum Founders
Vitalik Buterin
A Russian-Canadian luminary, is the most prominent figure among the co-founders. As the original author of the white paper that conceptualized Ethereum in 2013, Buterin continues to dedicate his efforts to enhancing the platform. Before his involvement with ETH, Buterin co-founded and contributed to the Bitcoin Magazine news website.
Gavin Wood
A British programmer, emerges as a pivotal co-founder, responsible for coding Ethereum’s initial technical implementation in the C++ programming language. Wood also introduced Solidity, Ethereum’s native programming language, and served as the inaugural Chief Technology Officer of the Ethereum Foundation. Before ETH, Wood was engaged as a research scientist at Microsoft and subsequently founded the Web3 Foundation.
Other notable co-founders
- Anthony Di Iorio, who provided crucial early-stage funding for the project.
- Charles Hoskinson, instrumental in establishing the Swiss-based Ethereum Foundation and its legal framework.
- Mihai Alisie, who played a supportive role in the formation of the Ethereum Foundation.
- Joseph Lubin, a Canadian entrepreneur who financially supported Ethereum’s nascent stages and later founded ConsenSys, an incubator for ETH-based startups.
- Amir Chetrit, a co-founder who participated in the project’s inception but departed during its early development phase.
What Sets Ethereum Apart?
Ethereum revolutionized the notion of a blockchain smart contract platform, introducing smart contracts as autonomous computer programs that carry out predefined actions to fulfill agreements among multiple internet-based parties. The primary objective was to diminish the dependence on trusted intermediaries in contractual dealings, ultimately reducing transaction costs and enhancing transaction reliability.
One of Ethereum’s most groundbreaking innovations was its creation of a platform capable of executing smart contracts within the blockchain framework, reinforcing the inherent advantages of smart contract technology. Co-founder Gavin Wood envisioned ETH blockchain as a “global computer,” capable of fortifying any program, making it more resilient, resistant to censorship, and less susceptible to fraudulent activities by running it on a widely distributed network of public nodes.
Beyond smart contracts, Ethereum’s blockchain accommodates various cryptocurrencies known as “tokens” through its ERC-20 compatibility standard. Notably, this has become the predominant use of the ETH platform, with over 280,000 ERC-20-compliant tokens launched to date. Among these, more than 40 rank among the top 100 cryptocurrencies by market capitalization, including USDT, LINK, and BNB. The emergence of Play-to-Earn games has significantly heightened interest in the ETH to PHP price.
Seven Reasons Why Ethereum Should No Longer Be Considered an Altcoin
Closest to Bitcoin: Recent research from the San Francisco Open Exchange (SFOX) suggests that Ether’s correlation with Bitcoin is remarkably high, making it questionable to label it as an “altcoin.” Over the past month, Ether’s correlation with Bitcoin reached 0.788, surpassing other cryptocurrencies like Bitcoin Cash, Litecoin, Bitcoin SV, and Ethereum Classic.
Leading Blockchain Platform: While Bitcoin pioneered the cryptocurrency space, Ethereum has become the largest blockchain platform by transaction volume. With over 1,600 decentralized applications (dApps) running on its network, Ethereum has twice the number of active dApps compared to its closest competitors.
Impressive Market Capitalization: Holds the second-largest market capitalization in the cryptocurrency world, following only Bitcoin.
Thriving Developer Community: Ethereum boasts a robust developer community, with approximately 216 developers actively contributing to the platform each month. Reports from crypto asset management firm Electric Capital indicate that this number is twice that of Bitcoin’s monthly developer contributions. Estimates even suggest that there are between 250,000 to 350,000 developers actively engaged in Ethereum development.
High Discussion Volume: Ether consistently ranks as the second most-discussed cryptocurrency, following Bitcoin, in online discussions. A study conducted by the Pacific Northwest National Laboratory found that Reddit conversations about cryptocurrency primarily focus on Bitcoin, with Ethereum closely following. Monero holds the third position in terms of discussions.
Decentralization at Its Core: Ethereum is recognized as one of the most decentralized blockchain platforms globally, with nearly 17,000 nodes distributed across six continents. While Bitcoin outnumbers Ethereum with over 66,000 nodes, it’s important to note that many of Bitcoin’s nodes are centralized in data centers.
Dominant Smart Contract Platform: Ethereum is the dominant platform for smart contracts, with 94% of the top 100 tokens by market capitalization built on its infrastructure.
The Path to Ethereum 2.0
In 2022, Ethereum embarked on its planned transition to a proof-of-stake system as part of the Ethereum 2.0 upgrade. This significant shift has been a long-standing goal for ETH, encompassing the introduction of a new consensus mechanism and the implementation of sharding to address scalability concerns. The existing ETH blockchain will be transformed into the Beacon Chain, serving as a settlement layer for smart contract interactions across various chains.
Ethereum’s Arrow Glacier update, initially scheduled for late 2021, was postponed to June 2022. During this interim period, Ethereum’s co-founder, Vitalik Buterin, anticipates that the network’s journey towards its ultimate objective will be influenced by optimistic rollups and Zk-rollups.
In January 2022, the Ethereum Foundation made a noteworthy decision to rebrand its terminology. The term “Ethereum 2.0” was replaced with “consensus layer,” while what was formerly known as “Ethereum 1.0” is now referred to as the “execution layer.” This alteration was made to provide a more precise representation of Ethereum’s development roadmap.
We're very close to a historical event. We're testing PoS on #Ethereum. Today will be the first mainnet shadow fork ever. We're roughly 690 blocks (~2 h) away from TTD. Follow here: https://t.co/T20ZMgApYw or https://t.co/Uod8WBsqtw
— MariusVanDerWijden (@vdWijden) April 11, 2022
Huge props to @parithosh_j! #TestingTheMerge pic.twitter.com/M8ZcHnKqaL
Providing an update on the progress of the Merge, ETH developer Tim Beiko took to Twitter on April 13, 2022. He stated that ETH was unequivocally approaching the final stages of the proof-of-work (PoW) era. Beiko also mentioned that the transition to PoS was expected a few months after June, although no specific date was provided. This announcement followed the successful implementation of the first mainnet shadow fork on April 11, 2022, which served as a test for Ethereum’s transition to PoS.
The Shanghai Upgrade: Ethereum’s Staking Revolution
The Shanghai Upgrade, a monumental milestone for Ethereum following The Merge, brings a game-changing feature that allows ETH stakers to finally reclaim their staked ETH and access their hard-earned rewards from the Beacon Chain. In the wake of The Merge, which saw the fusion of the Ethereum proof-of-work chain with the proof-of-stake Beacon Chain, validators committed 32 ETH to ensure network security. However, these committed stakers were previously unable to unlock and withdraw their holdings until the arrival of the Shanghai Upgrade.
The Shanghai/Capella Upgrade, affectionately dubbed “Shapella,” is a hard fork encompassing the implementation of five key Ethereum Improvement Proposals (EIPs). Among these, EIP-4895 takes the spotlight, as it empowers users with the capability to initiate withdrawals. Shanghai refers to the name of this hard fork in the execution layer, while Capella pertains to its name in the consensus layer.
A significant step forward was taken on February 7, 2023, when withdrawals were activated on the Zhejiang testnet. Subsequently, on February 28, the Sepolia testnet successfully executed the hard fork upgrade. The final trial run took place on March 15, 2023, as the Goerli testnet implemented the hard fork, marking the last hurdle before the eagerly anticipated mainnet upgrade, scheduled for sometime in March 2023. This monumental transition will make over 17.5 million ETH available for withdrawal, opening up new opportunities and possibilities for Ethereum stakeholders.
Buy Ethereum
Rank: 2
Considering Ethereum’s position as the second-largest cryptocurrency following Bitcoin, it’s readily accessible for purchase or trading with ETH trading pairs on nearly all prominent cryptocurrency exchanges. Among the notable markets are:
