Ethereum

Ethereum is an open, decentralized blockchain network and software platform designed to run smart contracts—programs stored on the network that execute according to their code. Ethereum refers to the network and its shared computing environment, while ether (ETH) is its native asset. ETH is used to pay transaction and computation fees, stake in support of network security, and transfer value within Ethereum-based applications.

Vitalik Buterin conceived Ethereum in late 2013 and wrote the original whitepaper. The early founding group expanded to eight co-founders: Buterin, Gavin Wood, Joseph Lubin, Jeffrey Wilcke, Mihai Alisie, Anthony Di Iorio, Amir Chetrit, and Charles Hoskinson. Their contributions included protocol design, client software, funding, organizational work, and the creation of Ethereum’s early technical specifications. The Ethereum Foundation was established in Switzerland in 2014, a crowdfunding campaign supported development, and the network launched on July 30, 2015.

Ethereum provides permissionless infrastructure for developers to create composable tokens and decentralized applications. Its major use cases include decentralized finance, stablecoins and payments, digital collectibles and other tokenized assets, gaming, decentralized organizations, identity systems, and settlement for layer 2 networks. Users typically interact through a wallet, while developers deploy applications to the Ethereum Virtual Machine. No founder or company owns the network; protocol changes are coordinated through open-source development, Ethereum Improvement Proposals, client teams, node operators, and validators.

Ethereum is a distributed state machine. The Ethereum Virtual Machine (EVM) applies the same execution rules across network nodes, allowing smart contracts to update balances, data, and application state without a central operator.

Ether (ETH) is the network’s native asset. It pays for computation and data through gas fees, and it is also the asset validators stake to participate in proof-of-stake consensus.

Ethereum has used proof of stake since The Merge on September 15, 2022. A solo validator deposits 32 ETH and runs execution, consensus, and validator software to check blocks, attest to the chain, and occasionally propose new blocks.

Validator rewards compensate correct participation. Protocol penalties and slashing put staked ETH at risk when validators go offline for extended periods or sign conflicting messages.

Users pay gas for transactions and smart-contract execution. EIP-1559 introduced a protocol base fee that rises or falls with block demand and is burned, while transaction tips may go to block proposers.

New ETH issued to validators and ETH removed through base-fee burn both influence supply. Because those quantities vary, Ethereum does not have a fixed inflation rate or a fixed maximum supply.

Ethereum’s scaling roadmap relies heavily on layer 2 rollups, which execute batches of transactions away from mainnet and use Ethereum for settlement and data availability. Rollup designs differ, so their security assumptions and withdrawal mechanics are not identical.

Proto-danksharding introduced temporary data blobs that give rollups a less expensive way to post data. Full danksharding remains a multi-phase roadmap goal rather than a completed feature.

Ethereum token standards give applications common interfaces. ERC-20 defines fungible tokens, ERC-721 defines non-fungible tokens, and ERC-1155 supports multiple token types within one contract interface.

These standards support wallets, exchanges, lending markets, stablecoins, collectibles, games, governance systems, and other applications. Application-level smart-contract risk remains separate from the security of Ethereum’s base protocol.