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What is Ethereum (ETH)?
Ethereum basic info
Ethereum is the second-generation blockchain that enables the creation and operation of decentralized applications (dApps) and smart contracts . Conceived in 2015 by Vitalik Buterin, it's best known for bringing smart contracts into the world of blockchain. The cost of every transaction and smart contract execution on Ethereum is measured in gas.
With the largest ecosystem of dApps, Ethereum also serves as the backbone for many Layer 2 solutions, such as Arbitrum and Polygon , which provide faster and cheaper transaction processing.
What is Ethereum (ETH)?
Ethereum is the second-largest cryptocurrency by market capitalization , following Bitcoin. It was developed by Russian-Canadian programmer Vitalik Buterin and officially launched on July 30, 2015. Ether, the native cryptocurrency of Ethereum, powers the ecosystem by enabling transactions, executing smart contracts, and compensating nodes for computational resources. Gwei is a smaller unit of Ether, with one Gwei equal to 0.000000001 ETH (one billionth of an ETH).
Ethereum was launched through an Initial Coin Offering (ICO) between July 22 and September 2, 2014. During the ICO, participants could buy Ether (ETH) with Bitcoin (BTC) at a rate of 2000 ETH per BTC—about $0.31 per ETH. The ICO raised over $18 million, making it one of the most successful fundraising events in the cryptocurrency world. Since its inception, Ethereum has provided a decentralized network for developers and users to build and interact with blockchain-based applications without reliance on centralized intermediaries.
Who founded the Ethereum blockchain?
Ethereum had eight co-founders:
• Vitalik Buterin – The primary visionary who authored Ethereum's whitepaper.
• Gavin Wood – Wrote the Yellow Paper and created the Solidity programming language.
• Joseph Lubin – Founder of ConsenSys, a blockchain technology company.
• Anthony Di Iorio – An early investor in Ethereum.
• Mihai Alisie – Helped establish the Ethereum Foundation.
• Amir Chetrit – An early contributor who later stepped back from the project.
• Charles Hoskinson – Co-founder of Ethereum who later founded the Cardano blockchain.
• Jeffrey Wilcke – A key developer behind Go Ethereum (Geth).
As of 2024, Vitalik Buterin is the only co-founder still actively working on Ethereum. The others have moved on to lead or create new blockchain ventures.
History of Ethereum
2013: Vitalik Buterin, who was a co-founder of Bitcoin Magazine, proposed Ethereum. He envisioned a blockchain platform for decentralized applications (dApps) powered by smart contracts.
2014: Ethereum was announced at the North American Bitcoin Conference. Its Initial Coin Offering (ICO) raised over $18 million.
2015: Ethereum launched its first live version, Frontier, on July 30, enabling developers to build dApps.
2016: Ethereum underwent its first upgrade, Homestead, and faced the DAO hack, leading to a hard fork that split the network into Ethereum (ETH) and Ethereum Classic (ETC).
2017: The Byzantium upgrade improved privacy and scalability with nine Ethereum Improvement Proposals (EIPs).
2019: The Constantinople and Istanbul upgrades optimized gas costs, increased interoperability, and enhanced zero-knowledge proof efficiency.
2020: Ethereum launched the Beacon Chain, introducing Proof-of-Stake (PoS) as part of the Ethereum 2.0 roadmap.
2021: The Berlin and London Hard Fork upgrades optimized fees and introduced EIP-1559, burning a portion of transaction fees.
2022: Ethereum transitioned to PoS with The Merge on September 15, reducing energy consumption by ~99.95%.
2023: The Shanghai and Capella upgrades enabled staked ETH withdrawals and optimized PoS processes.
2024: Ethereum continues to focus on scaling solutions, such as sharding, to improve transaction speed and reduce costs.
How Ethereum works
Ethereum is a decentralized, open-source blockchain platform where developers can create and run smart contracts—self-executing programs that power a wide range of decentralized applications (dApps). It operates on a global network of computers (nodes) that process transactions and record them on the blockchain, ensuring security and transparency. Ethereum's native cryptocurrency, Ether (ETH), is used to pay gas fees for transactions, run smart contracts, and support the network through staking.
After Ethereum transitioned to Proof-of-Stake (PoS) in 2022, validators replaced miners to secure the network. To become a validator, you need to stake 32 ETH, which is locked to help maintain the network's security and efficiency. In return, validators earn incentives for verifying and adding new blocks.
What makes Ethereum unique?
With over a million tokens built on its blockchain and billions of dollars flowing through decentralized applications (dApps), Ethereum has redefined the possibilities of blockchain technology. It supports ERC-20 tokens like USDT, LINK, and BNB, many of which rank among the top cryptocurrencies by market capitalization. Ethereum also powers the thriving non-fungible token (NFT) market, enabling unique digital assets in gaming, art, and more. The EIP-1559 upgrade added a deflationary element to its ecosystem by burning a portion of gas fees, further strengthening its economic model.
With global interest reflected in trading pairs like ETH to USD and ETH to EUR, Ethereum continues to lead the way in shaping the future of blockchain.
What is the next Ethereum upgrade?
What is the Ethereum 2.0 upgrade?
Ethereum 2.0 is a major upgrade to the Ethereum blockchain, launched in phases starting with the Beacon Chain in December 2020. The most notable change was the transition from Proof-of-Work (PoW) to Proof-of-Stake (PoS) in The Merge, completed in September 2022. This shift significantly reduced energy consumption and improved the network's security.
Ethereum Pectra upgrade
The next major Ethereum upgrade, Prague-Electra (Pectra), is set for early 2025. It will enhance scalability, efficiency, and usability through key features like batch transactions (EIP-3074), increased staking limits (EIP-7251), and reduced node storage via Verkle Trees (EIP-2935). Learn more about the Pectra Upgrade and how it will improve your Ethereum experience.
Does Ethereum upgrade affect ETH's price?
Ethereum upgrades can influence ETH's price, but the effect is not always straightforward. Significant upgrades, like The Merge in 2022, tend to generate market interest and can lead to price fluctuations, including changes in the Ethereum live price. These upgrades aim to improve the network's scalability, security, and energy efficiency, which can be seen as positive developments for the long-term outlook of Ethereum. However, price changes are also influenced by other factors, such as broader market conditions and investor sentiment, so the impact of upgrades on ETH's price is not always predictable.
For real-time insights, many traders track ETH's current price along with Ethereum charts to better understand short-term fluctuations and market behavior.
What are potential use cases for Ethereum?
Ethereum enables a variety of use cases due to its flexibility and decentralized nature:
• Decentralized Finance (DeFi): Financial services without intermediaries (e.g., lending, exchanges).
• Smart contracts: Automated agreements in industries like insurance, real estate, and legal.
• Non-Fungible Tokens (NFTs): Digital ownership in art, collectibles, and media.
• Decentralized Autonomous Organizations (DAO): Community-governed organizations.
• Supply chain management: Transparent tracking of goods and verification of authenticity.
• Gaming: Play-to-Earn (P2E) models and tokenized assets in games.
• Identity verification: Secure management of digital identities and personal data.
Where can I stay updated on Ethereum news?
If you're looking for the latest Ethereum updates and crypto news, Bitget has you covered. Bitget News keeps you informed with real-time updates, market trends, and all the latest happenings in the crypto world
Ready to learn more? Bitget Academy is the perfect place, offering simple guides, trading tips, and insights for both beginners and experienced traders.
What's next for Ethereum?
Looking ahead, Ethereum's development continues with a focus on improving scalability, security, and decentralization:
• Sharding – A major update that will split Ethereum into smaller pieces (shards) to process transactions in parallel, increasing speed and lowering fees.
• Layer 2 Solutions – Technologies like Optimism and Arbitrum will continue to reduce transaction costs and improve scalability.
• EIP-4844 (Proto-Danksharding) – This will introduce new transaction types to further reduce gas fees and enhance data availability.
• EVM Improvements – Enhancements to the Ethereum Virtual Machine will boost performance and support more complex applications.
• PoS Optimizations – Ongoing improvements to Ethereum's Proof-of-Stake system will increase security, decentralization, and staking incentives.
Start investing by accessing the Ethereum trading page on Bitget . Ethereum's price is updated and available in real-time on Bitget.
ETH supply and tokenomics
Uniqueness
Ethereum has pioneered the concept of a blockchain smart contract platform. Smart contracts are computer programs that automatically execute the actions necessary to fulfill an agreement between several parties on the internet. They were designed to reduce the need for trusted intermediates between contractors, thus reducing transaction costs while also increasing transaction reliability.
Ethereum’s principal innovation was designing a platform that allowed it to execute smart contracts using the blockchain, which further reinforces the already existing benefits of smart contract technology. Ethereum’s blockchain was designed, according to co-founder Gavin Wood, as a sort of “one computer for the entire planet,” theoretically able to make any program more robust, censorship-resistant and less prone to fraud by running it on a globally distributed network of public nodes.
In addition to smart contracts, Ethereum’s blockchain is able to host other cryptocurrencies, called “tokens,” through the use of its ERC-20 compatibility standard. In fact, this has been the most common use for the ETH platform so far: to date, more than 280,000 ERC-20-compliant tokens have been launched. Over 40 of these make the top-100 cryptocurrencies by market capitalization, for example, USDT, LINK and BNB. Since the emergence of Play2Earn games, there has been a substantial increase in interest in the ETH to PHP price.
Token utility
Before The Merge
Before the Merge, Ethereum operated on a proof-of-work mechanism where miners are responsible for validating transactions and keeping the network secure.
In order to be incentivized to keep the Ethereum network secure, miners receive two main kinds of fees:
1. Block reward. The miner who mines a new block, receives a reward of 2ETH of newly minted Ethereum
2. Tips. When users transact, they can add an optional tip or priority fee to enable their transaction to be validated more quickly by miners. The fee goes to miners as profits.
After The Merge
After the Merge, which has already happened. Ethereum now is working as a PoS, Proof of Stake Chain. Validators or miners will stake the tokens to participate in consensus and receive block rewards. Unlike mining, this doesn’t need a lot of high-powered computers, and anybody owning or able to pool together 32ETH (needed for a node) can stake their Ethereum. Nodes then have a chance at winning the rewards.
However, unlike before when the block subsidy was static, the number of new tokens issued will depend on the number of ETH tokens staked in the ecosystem. The overall issuance will be higher as more ETH is staked, but the return will go down as that happens. The below table shows that even if 100M tokens are staked, the net new issuance is under 2% (issuance rate). It’s important to note that as more tokens get staked, the overall return to the individuals decreases (validator interest).
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What is the development prospect and future value of ETH?
The market value of ETH currently stands at $394.98B, and its market ranking is #2. The value of ETH is widely recognized by the market. When the bull market comes, the market value of ETH will likely continue to increase.
Moreover, if ETH can play a greater role in practical applications, such as Ethereum builders fully leveraging the potential of ETH, partnering with more businesses, and increasing its user base, the long-term value of ETH will be significantly enhanced.
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