Ethereum is a decentralized open-source blockchain system that incorporates its own cryptocurrency, Ether. Serving as a platform for numerous other cryptocurrencies, Ethereum also supports the execution of decentralized smart contracts. Ethereum was initially introduced in a 2013 whitepaper by Vitalik Buterin. Along with other co-founders, Buterin successfully secured funding for the project through an online public crowd sale held in the summer of 2014. The project team raised $18.3 million in Bitcoin, with the Initial Coin Offering (ICO) pricing Ethereum at $0.311 and over 60 million Ether sold. Considering Ethereum's current price, this results in a return on investment (ROI) at an annualized rate exceeding 270%, effectively nearly quadrupling investments annually since the summer of 2014. The Ethereum Foundation officially launched the blockchain on July 30, 2015, under the prototype codenamed "Frontier." Since its inception, the network has undergone several updates, namely "Constantinople" on February 28, 2019, "Istanbul" on December 8, 2019, "Muir Glacier" on January 2, 2020, "Berlin" on April 14, 2021, and the most recent "London" hard fork on August 5, 2021. Ethereum's stated objective is to evolve into a global platform for decentralized applications, enabling users worldwide to develop and operate software that is impervious to censorship, downtime, and fraud.

Ethereum boasts a total of eight co-founders—an unusually large number for a cryptocurrency project. They initially convened on June 7, 2014, in Zug, Switzerland. * Russian-Canadian Vitalik Buterin is perhaps the most renowned of the group. He authored the original white paper detailing Ethereum in 2013 and continues to work on advancing the platform. Before Ethereum, Buterin co-founded and contributed to the Bitcoin Magazine news website. * British programmer Gavin Wood is arguably the second most pivotal co-founder of Ethereum. He executed the first technical implementation of Ethereum using the C++ programming language, proposed Ethereum's native programming language, Solidity, and served as the inaugural chief technology officer of the Ethereum Foundation. Prior to Ethereum, Wood worked as a research scientist at Microsoft, later going on to establish the Web3 Foundation. Other co-founders of Ethereum include: - Anthony Di Iorio, who financially supported the project during its early development phase. - Charles Hoskinson, who played a key role in forming the Swiss-based Ethereum Foundation and its legal framework. - Mihai Alisie, who assisted in founding the Ethereum Foundation. - Joseph Lubin, a Canadian entrepreneur, who, like Di Iorio, helped finance Ethereum in its early stages and later founded ConsenSys, an incubator for startups based on Ethereum. - Amir Chetrit, who contributed to founding Ethereum but stepped away early in the development process.

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 internet parties. They are designed to reduce the need for trusted intermediaries between contractors, thereby decreasing transaction costs while enhancing transaction reliability. Ethereum's principal innovation was developing a platform that allows for the execution of smart contracts using the blockchain, which further strengthens the existing benefits of smart contract technology. According to co-founder Gavin Wood, Ethereum’s blockchain was envisioned as a “one computer for the entire planet,” theoretically capable of making any program more robust, censorship-resistant, and less susceptible to fraud by operating on a globally distributed network of public nodes. Beyond smart contracts, Ethereum’s blockchain can also host other cryptocurrencies, known as “tokens,” by utilizing its ERC-20 compatibility standard. In fact, this has been the most prevalent application for the ETH platform thus far: to date, more than 280,000 ERC-20-compliant tokens have been launched. Over 40 of these rank among the top 100 cryptocurrencies by market capitalization, such as USDT, LINK, and BNB. Since the rise of Play2Earn games, there has been a significant increase in interest in the ETH to PHP price.

Ethereum Name Service (ENS) is a decentralized and flexible naming system built on the Ethereum blockchain. It serves as the Web3 equivalent of the Domain Name System (DNS). Cryptocurrency addresses in their original form are long alphanumeric strings intended for computer processing, for example, “0xDC25EF3F5B8A186998338A2ADA83795FBA2D695E.” Such addresses can be difficult to interpret and may occasionally result in misdirection of funds. ENS addresses the challenge associated with lengthy and complex crypto addresses by providing human-readable names for machine-readable identifiers, such as Ethereum addresses, metadata, other cryptocurrency addresses, and content hashes. With ENS, a complex address like the one above can be converted into a simpler format, such as “Alice.eth,” allowing for the reception of any cryptocurrency or NFT through the ENS domain. ENS operates using two Ethereum smart contracts. The first contract is the ENS registry, which maintains three key details: the domain's owner, the domain's resolver, and the caching time for all records associated with the domain. The second contract is the Resolver, which facilitates the translation between domain names and machine-readable addresses in both directions. Additionally, ENS is compatible with widely-used DNS names, including .com, .org, .io, .app, among others, alongside the .eth names.

Since its inception, Ethereum has consistently maintained its position as the second-largest cryptocurrency by market capitalization. However, like every other blockchain network, Ethereum is not without flaws. Notably, the legacy blockchain suffers from high gas fees and low throughput, processing between 15 to 30 transactions per second. Although efforts are underway to address these issues through several upgrades, many competitors have leveraged this delay to offer crypto users cheaper and faster transactions. The term “Ethereum Killer” emerged around 2016/2017 as alternative blockchains such as Cardano entered the crypto landscape. In 2018, EOS was introduced as the next “Ethereum killer,” raising $4.1 billion from investors—the highest amount ever garnered by an ICO. Since then, other blockchains like Tezos, Solana, Fantom, Avalanche, and Binance Smart Chain have come forth as potential Ethereum killers. Each of these blockchains utilizes a different consensus model to address Ethereum’s limitations imposed by its PoW mechanism. For example, Solana uses proof-of-history (PoH), whereas Binance Smart Chain employs both proof-of-authority (PoA) and delegated proof-of-stake (DPoS). Nevertheless, none of these alternative blockchains have succeeded in unseating Ethereum as the second-largest cryptocurrency by market capitalization. Ethereum also remains the largest blockchain for NFT trading activities, according to Eulerpool.

The EIP-1559 upgrade implements a new mechanism for estimating gas fees on the Ethereum blockchain. Prior to this upgrade, users were required to engage in an open auction process to have their transactions selected by a miner, known as a “first-price auction,” where the highest bidder wins. Following EIP-1559, this process is managed through an automated bidding system. A predetermined “base fee” is established for transactions to be included in the next block, which adjusts according to network congestion levels. Additionally, users seeking to expedite their transactions can opt to pay a “priority fee” to a miner for quicker processing. EIP-1559 also incorporates a fee-burning element, whereby a portion of each transaction fee (specifically, the base fee) is burned and permanently removed from circulation. This mechanism aims to decrease the circulating supply of Ether, which could potentially increase the token's value over time. Remarkably, in less than two months following the implementation of the London upgrade, the network had burned over $1 billion worth of Ether.

As of September 2021, approximately 117.5 million Ethereum (ETH) coins were in circulation, with 72 million issued in the genesis block, the inaugural block of the Ethereum blockchain. Out of these 72 million coins, 60 million were allocated to early contributors of the 2014 crowdfunding event that financed the project, while 12 million were reserved for the development fund. The remaining supply has been distributed as block rewards to miners within the Ethereum network. Initially set at 5 ETH per block in 2015, the reward decreased to 3 ETH by late 2017 and further reduced to 2 ETH in early 2019. The average time required to mine an Ethereum block is approximately 13-15 seconds. In August 2021, the Ethereum network underwent the London hard fork, which included the Ethereum Improvement Proposal (EIP) 1559. EIP-1559 replaces the first-price auction system, where the highest bidder wins, with a "base fee" structure for transactions to be included in the next block. Users wishing to prioritize their transactions can offer a "tip" or "priority fee" to miners. Although the base fee adjusts dynamically with transaction activity to stabilize gas fee volatility, it does not lower the fee, which can be exceptionally high during peak network congestion. A key difference between Bitcoin and Ethereum in terms of economics is that Ethereum is not deflationary; its total supply is not capped. Ethereum's developers argue against a fixed security budget for the network, preferring to allow ETH issuance rates to be adjusted through consensus to ensure security is maintained with a minimal issuance rate. However, with the advent of EIP-1559, the base fees utilized in transactions are burned, effectively removing ETH from circulation. Increased network activity results in more ETH being burned, which could decrease supply and potentially lead to an appreciation in the price of Ethereum, assuming all else is equal. This change has the potential to make Ethereum deflationary, generating excitement among ETH holders regarding a possible increase in Ethereum's market value.

As of August 2020, Ethereum's security is ensured through the Ethash proof-of-work algorithm, part of the Keccak family of hash functions. There are, however, plans to transition the network to a proof-of-stake algorithm associated with the major Ethereum 2.0 update, which launched in late 2020. Following the launch of the Ethereum 2.0 Beacon Chain (Phase 0) in early December 2020, staking on the Ethereum 2.0 network became possible. Staking Ethereum involves depositing ETH (with a requirement of 32 ETH to activate validator software) on Ethereum 2.0 by sending it to a deposit contract, thereby aiding in securing the network by storing data, processing transactions, and adding new blocks to the blockchain. As of mid-September 2021, the cost of 32 Ether equates to approximately $116,029. Currently, Ethereum validators earn a return of 6% APR, amounting to around 1.91952 ETH, or approximately $6,960 based on the present Ethereum price. These figures are subject to change as the network evolves and the number of stakers (validators) increases. Ethereum staking rewards are determined by a distribution curve (the participation and average percent of stakers). Initially, ETH 2.0 staking rewards were as high as 20% for early participants, but they are expected to decrease to between 7% and 4.5% annually. The minimum requirement for an Ethereum stake is 32 ETH. If you opt to stake in Ethereum 2.0, your Ethereum stake will be locked on the network, potentially for several months or even years, until the completion of the Ethereum 2.0 upgrade.

Considering that Ethereum is the second-largest cryptocurrency following Bitcoin, it is accessible for purchase or use in ETH trading pairs on almost all major cryptocurrency exchanges. Some of the most prominent markets are: * Binance * Coinbase Pro * OKEx * Kraken * Huobi Global Well-known Ethereum price pairs include: ETH/USD, ETH/GBP, ETH/AUD, and ETH/JPY. For additional information on Ethereum's market data, refer to Eulerpool.

The Ethereum network has been consistently challenged by high transaction fees, which often surge during periods of increased demand. In May 2021, the average transaction fee on the network reached a high of $71.72. Besides the issue of high transaction costs, this leading altcoin also encounters scalability challenges. As previously mentioned, there are ongoing plans to transition to a proof-of-stake algorithm to enhance the platform's scalability and introduce several new features. The development team has already initiated the transition to ETH 2.0, implementing various upgrades, including the London hard fork. The London upgrade was launched in August 2021 and incorporated five Ethereum Improvement Proposals (EIPs): EIP-3529, EIP-3198, EIP-3541, and the most notable, EIP-1559 and EIP-3554. EIP-1559 is arguably the most significant upgrade among all the EIPs. For further information or updates, please refer to Eulerpool.

In 2022, Ethereum aims to transition to proof-of-stake through the Ethereum 2.0 update. This transition has been part of the Ethereum roadmap since the network's inception and would introduce a new consensus mechanism, along with sharding as a scaling solution. The existing Ethereum chain will transform into the Beacon Chain and function as a settlement layer for smart contract interactions across other chains. In late 2021, the Ethereum Arrow Glacier update was postponed to June 2022. During this period, Vitalik Buterin anticipates the journey towards the network's endgame will be influenced by optimistic rollups and Zk-rollups. In January 2022, the Ethereum Foundation announced a decision to discontinue the term “Ethereum 2.0” to prevent future users from navigating a complex mental model. The terms previously known as “Ethereum 1.0” will now be identified as the “execution layer,” while “Ethereum 2.0” will be referred to as the “consensus layer.” This rebranding aims to provide a clearer depiction of the Ethereum roadmap. Regarding the progress of the Merge, on April 13, 2022, Ethereum developer Tim Beiko tweeted an update, indicating that they are “definitely in the final chapter of PoW on Ethereum.” He also noted that users could expect the Merge to take place a few months after June, although an exact date was not specified. This update followed the successful implementation of the first mainnet shadow fork on April 11, 2022, designed to test Ethereum's transition to PoS.

In 2022, Ethereum renamed its transition from proof-of-work (PoW) to proof-of-stake (PoS) from Ethereum 2.0 to The Merge. The Merge was successfully activated on September 15, 2022, following the successful completion of the Goerli testnet merge on August 11, 2022. The Merge introduces several crucial modifications to Ethereum. Firstly, it combines the existing PoW Ethereum mainnet with the Beacon Chain, which operates on PoS. Together, these two chains will establish the new proof-of-stake Ethereum, comprising a consensus layer and an execution layer. The consensus layer will synchronize the chain state across the network, while the execution layer will manage transactions and block production. Secondly, the Merge significantly decreases ETH issuance. This decrease is referred to as the "triple halving" in reference to the Bitcoin halving, as the Merge reduces ETH issuance by 90%. With more than 14 million ETH already staked, ETH has the potential to become deflationary after the transition. Additionally, stakers are projected to earn between 8% and 12% annual percentage rate (APR) according to current forecasts. Staked ETH will not be immediately withdrawable post-Merge; this functionality will be enabled following the Shanghai upgrade, anticipated to occur 6 to 12 months later. The Merge will not increase transaction throughput or reduce gas fees, as the block production rate will remain approximately the same at 12 seconds (currently at 13 seconds). It will also not facilitate on-chain governance, as protocol changes will continue to be discussed and decided off-chain by stakeholders. Significantly, the transition to PoS is anticipated to lower Ethereum's annual energy consumption from 112 TWh/yr to only 0.01 TWh/yr, representing a 99.9% reduction. This substantial reduction is expected to attract an influx of institutional investments in a more environmentally friendly Ethereum. Conversely, Ethereum miners, in an industry valued at an estimated $19 billion, are advocating for ETHPoW, a potential hard fork of Ethereum based on proof-of-work.

The most significant Ethereum upgrade since The Merge, the Shanghai Upgrade will enable ETH stakers to unstake their ETH and withdraw ETH rewards from the Beacon Chain. During The Merge, the Ethereum proof-of-work chain was integrated with the proof-of-stake Beacon Chain. Instead of mining, validators secure the network by staking 32 ETH. However, stakers have been unable to unstake and withdraw until the implementation of the Shanghai Upgrade. The Shanghai/Capella (“Shapella”) Upgrade is a hard fork that will introduce five Ethereum Improvement Proposals (EIPs), with EIP-4895 being the most anticipated, as it will enable withdrawals. The term "Shanghai" refers to the hard fork on the execution layer, while "Capella" pertains to the consensus layer. On February 7, 2023, withdrawals were enabled on the Zhejiang testnet, followed by the successful execution of the hard fork upgrade on the Sepolia testnet on February 28, 2023. Subsequently, on March 15, 2023, the hard fork was executed on the Goerli testnet, serving as the final test run before the mainnet upgrade, which is expected to occur sometime in March 2023. Consequently, over 17.5 million ETH will become available for withdrawal.