Ethereum (ETH)
| Category | Details |
|---|---|
| Website | https://www.ethereum.org/ |
| @ethereum | |
| https://www.reddit.com/r/ethereum |
Ethereum is a decentralized, open-source blockchain system that features smart contract functionality. It was proposed in late 2013 by programmer Vitalik Buterin and development was crowdfunded in 2014, with the network going live on July 30, 2015. Ethereum is often described as a world computer due to its ability to execute scripts using an international network of public nodes.
History of Ethereum
The idea for Ethereum was first introduced in a whitepaper by Vitalik Buterin in 2013. Buterin aimed to build upon the blockchain technology that Bitcoin had pioneered by introducing a platform that could support more complex applications. The project's development was funded through an online crowdsale during July and August 2014, which garnered significant interest from the cryptocurrency community.
Ethereum was officially launched on July 30, 2015, with the release of its first version called "Frontier." Since then, Ethereum has undergone several upgrades, including "Homestead" in 2016, "Metropolis" in two parts - "Byzantium" in 2017 and "Constantinople" in 2019, and the "Istanbul" update in December 2019. These updates have aimed to improve the security, functionality, and scalability of the platform.
The Ethereum network
How Ethereum works
Ethereum operates as a decentralized platform that runs smart contracts: applications that run exactly as programmed without any possibility of downtime, fraud, or third-party interference. These applications run on a custom-built blockchain, an enormously powerful shared global infrastructure that can move value around and represent the ownership of property.
Ethereum's native cryptocurrency, Ether (ETH), is used to facilitate operations on the network, particularly for transaction fees and as a reward for miners. Miners work to secure the network by validating transactions and adding them to the Ethereum blockchain.
Ethereum's consensus mechanism
Initially, Ethereum used a Proof of Work (PoW) consensus mechanism, similar to Bitcoin. However, the network has been transitioning to a Proof of Stake (PoS) system with the Ethereum 2.0 upgrade. This transition aims to improve the network's efficiency, reduce energy consumption, and increase transaction speeds.
In a PoS system, validators are chosen to create new blocks based on the number of coins they hold and are willing to "stake" as collateral. This mechanism is expected to enhance the security and scalability of Ethereum, while also making it more environmentally friendly.
Smart contracts and decentralized applications
Smart contracts on Ethereum
Smart contracts are self-executing contracts with the terms of the agreement directly written into code. They facilitate, verify, or enforce the negotiation or performance of a contract without the need for a trusted third party. Ethereum's Turing-complete programming language, Solidity, allows developers to create complex smart contracts that can automate a wide range of processes.
Decentralized applications (DApps)
Ethereum is a popular platform for building decentralized applications (DApps), which are applications that run on a blockchain rather than a centralized server. DApps leverage Ethereum's blockchain to achieve greater transparency, security, and resilience compared to traditional apps.
Ethereum hosts a variety of DApps, ranging from financial services (Decentralized Finance, or DeFi) to games, supply chain management, and social media platforms. The flexibility of Ethereum's platform has led to a vibrant ecosystem of applications that continue to drive innovation in the blockchain space.