Ethereum is a decentralized blockchain platform known for supporting smart contracts, with its native cryptocurrency, Ether (ETH), holding the second-highest market capitalization after Bitcoin. The platform is open-source and supports various applications.
Ethereum was initially proposed in 2013 by programmer Vitalik Buterin, with co-founders including Gavin Wood, Charles Hoskinson, Anthony Di Iorio, and Joseph Lubin. Development began in 2014, funded through crowdfunding, and the network officially launched on July 30, 2015. The platform allows anyone to deploy decentralized applications (dApps) that are permanent and immutable, enabling direct user interaction.
A significant use of Ethereum is in decentralized finance (DeFi), where financial applications operate without traditional intermediaries like banks or brokerages, allowing users to lend, borrow, and earn interest on their cryptocurrency assets. Ethereum also supports non-fungible tokens (NFTs), which represent ownership of unique digital items, like images. Many other cryptocurrencies are built on Ethereum’s ERC-20 token standard, which is widely used for initial coin offerings (ICOs).
On September 15, 2022, Ethereum transitioned from a proof-of-work (PoW) to a proof-of-stake (PoS) consensus mechanism in an upgrade known as "the Merge," reducing the network's energy consumption by 99%.
