Ethereum is a decentralized, blockchain-based platform that facilitates the use of “smart contracts”, the creation of “decentralized applications” or “dapps” and also has a native cryptocurrency called “Ether” or “ETH”. The Ethereum network is programmable and can be used to implement smart contracts which are self-executing protocols that can be used to carry out various types of transactions and also to create decentralized applications ranging from finance related platforms to games. The fees charged for using smart contracts or dapps on the basis of the Etherum network are paid using Ether. Aside from transferring value within the network, Ether, as a cryptocurrency, has intrinsic value outside the Ethereum network as well. Cryptocurrency is traded on many crypto exchanges like Coinbase, Binance, Bitstamp, etc. It is also accepted as a payment method by many companies and stores around the world.
Initially proposed by Vitalik Buterin in 2013, Ethereum was developed by Buterin and some of the other co-founders, and was launched in 2015. Just like the Bitcoin platform, Ethereum is also an open source and decentralized peer-to-peer network based on the blockchain Technology where transactions are stored in blocks that are discovered and added by miners. Miners use specialized computers to solve complex mathematical problems, which in turn agree to transactions. Miners are rewarded for their work with a certain amount of Ether. The miners and nodes that power the Ethereum network are spread across the globe making their ledger immutable. Ethereum also has its own programming language called Solidity that can be used to write smart contracts and create dapps.
Although built on the origins of Bitcoin, the founders of Ethereum are widely credited with exploring the potential of the blockchain beyond creating cryptocurrencies. Today, Ethereum is used to create decentralized financial platforms, trade valuable artwork or share intellectual property using NFTs (non-fungible tokens), build custom social networking platforms, etc. In order to make its system more efficient and scalable, it is migrated from Proof of Work to Proof of Stake in an upgrade called “Ethereum 2.0” or “Serenity”.
After Bitcoin, Ether is the second largest cryptocurrency in the world. In May 2021, Ether price reached an all-time high after breaking the $4,000 mark. While the number of bitcoins that will ever be produced is limited to 21 million, there is no such limit set for the production of Ether.