Ethereum is a decentralized, open source blockchain with smart contract functionality. Ethereum was built on the World’s first blockchain, Bitcoin’s innovation. There are several key features that were built into Ethereum’s blockchain, making it a very different product from Bitcoin.
Ethereum was conceived in 2013 by programmer Vitalik Buterin. Vitalik believed that Bitcoin and blockchain technology could benefit from other applications besides money, and a more robust language for application development should be used. He proposed the use of a Turing-complete programming language for the development of this new platform, which eventually became Ethereum.
There were several other people considered as the initial founders of Ethereum. Some of the high profile and well-known founders included Gavin Wood, Charles Hoskinson, Anthony Di Iorio and Joseph Lubin.
In 2014, crowdfunding and development work began. The network went live on 30 July 2015.
Like Bitcoin, Ethereum is a form of digital money that allows people to do transactions without payment providers or banks. However, Ethereum is programmable, so building and deployment of decentralized applications on its network is possible. Apps can be built to use the Ethereum blockchain to store data or use the blockchain to control an action. It can be considered as a general blockchain with limitless possibilities. Hence many innovations can take place on the Ethereum blockchain.
Ethereum allows anyone to deploy permanent and immutable decentralized applications onto it, with which users can interact. A broad array of financial services without the need for typical financial intermediaries like brokerages, exchanges, or banks, can be programmed to operate using Ethereum blockchain. These financial services were generally classified as Decentralized Finance, more commonly referred to as “DEFI”. An example of DEFi is allowing cryptocurrency users to borrow against their holdings or lend them out for interest.
Ether (ETH) is the native cryptocurrency of the Ethereum platform. ETH is digital, global money, the currency of Ethereum apps. Currently, Ether is generated through proof-of-work mining, whereby powerful computers solve a complex puzzle to secure the blockchain, and Ether is rewarded to the miner for their effort. In September 2022, the proof-of-work will be replaced by a proof-of-stake mechanism, whereby people who stake Ether will be the responsible party for securing the blockchain.
Among cryptocurrencies, Ether is second only to Bitcoin in market capitalization.
