Ethereum
The programmable blockchain that powers decentralized applications, DeFi, and NFTs.
Overview
Ethereum is the world's leading smart contract platform, conceived in 2013 by Vitalik Buterin and launched in July 2015. While Bitcoin introduced decentralized money, Ethereum introduced decentralized computing — a global, programmable blockchain where developers can build and deploy applications that run exactly as programmed without any possibility of downtime, censorship, or third-party interference.
Smart contracts are self-executing programs stored on the Ethereum blockchain that automatically enforce the terms of an agreement when predefined conditions are met. This simple concept has spawned entirely new industries: decentralized finance (DeFi) with hundreds of billions in total value locked, non-fungible tokens (NFTs) representing digital ownership, decentralized autonomous organizations (DAOs) governing billions in treasury funds, and much more.
In September 2022, Ethereum completed 'The Merge,' transitioning from energy-intensive Proof of Work to Proof of Stake consensus. This reduced Ethereum's energy consumption by approximately 99.95%. The network continues to evolve through a multi-phase roadmap that includes sharding and various scaling improvements collectively known as the 'Surge, Scourge, Verge, Purge, and Splurge.'
Ethereum created the concept of a programmable blockchain, which enabled an explosion of innovation including DeFi, NFTs, DAOs, and the entire Layer 2 ecosystem. The vast majority of blockchain development occurs on Ethereum or Ethereum-compatible chains. Its transition to Proof of Stake demonstrated that a major blockchain network can fundamentally change its consensus mechanism, and its rollup-centric scaling roadmap is shaping the future architecture of Web3.
How It Works
The Basics
Ethereum runs on a network of thousands of computers (nodes) worldwide. Developers write smart contracts in a programming language called Solidity, which are compiled and deployed to the Ethereum Virtual Machine (EVM).
Pros & Cons
- Largest smart contract ecosystem with the most developers, applications, and total value locked
- Proof of Stake consensus reduced energy usage by 99.95% since The Merge
- Massive DeFi ecosystem including leading protocols like Uniswap, Aave, Lido, and MakerDAO
- Most battle-tested smart contract platform with over 9 years of operation
- Thriving Layer 2 ecosystem (Arbitrum, Optimism, Base) dramatically reduces fees
- Gas fees on the base layer can still be expensive during periods of high demand
- The base layer processes only about 15-30 transactions per second
- Smart contract complexity creates a larger attack surface for exploits and bugs
- The staking requirement of 32 ETH is a significant barrier for solo validators
- Network upgrades move slowly due to the conservative approach to changes
Use Cases
- Decentralized finance (DeFi) — lending, borrowing, trading, and yield farming
- Non-fungible tokens (NFTs) for digital art, collectibles, gaming assets, and real-world asset tokenization
- Decentralized autonomous organizations (DAOs) for community governance
- Stablecoins — USDT, USDC, and DAI are all primarily issued on Ethereum
- Layer 2 rollups that inherit Ethereum's security while providing cheap, fast transactions
Technical Details
- Consensus
- Proof of Stake (Casper FFG + LMD-GHOST)
- Launch Year
- 2015
- Founder
- Vitalik Buterin (with co-founders including Gavin Wood, Charles Hoskinson, and others)
- Max Supply
- No hard cap
- Blockchain
- Ethereum
- Website
- ethereum.org