What is Ethereum? 

Ethereum is a digital cryptocurrency and platform that allows developers to build smart contracts and decentralised apps (Dapps). 

Ethereum

History & Founders 

Ethereum was first conceptualised by Vitalik Buterin in 2013, when he released Ethereum’s original whitepaper. In total the cryptocurrency platform has eight co-founders who met on June 7, 2014, in Zug, Switzerland; in addition to Vitalik the most notable of these are Gavin Wood & Charles Hoskinson.  

Gavin wood was the original CTO of Ethereum and is also the creator of another of the most important cryptocurrencies – Polkadot. Like Ethereum, Polkadot is a cryptocurrency platform that aims to become the internet of crypto. Using cross chain interoperability, decentralised applications and cryptocurrencies on Polkadot will all be able to communicate with each other, unlike the vast majority of current cryptocurrencies that work in isolation. 

Charles Hoskinson is well known for founding the cryptocurrency Cardano (ADA). Like both Polkadot and Ethereum, Cardano is a platform that enables developers to build decentralised applications that are powered by it. 

Vitalik Buterin is still heavily involved in the development of Ethereum to this day. Ethereum makes continuously improve their platform with upgrades, both the Ethereum Berlin Upgrade and Ethereum 2.0 will make Ethereum an even more successful project. 

How Does Ethereum Work? 

Ethereum Blockchain 

Ethereum’s blockchain is the backbone for the entire Ethereum network. In simple terms Ethereum’s blockchain is a public ledger that is decentralised. To maintain the safety and reliability of the blockchain each of the transactions are verified and recorded. 

Ethereum Smart Contracts 

Ethereum smart contracts run on the Ethereum blockchain, they are a combination of code and data that reside on each address within the blockchain.  

As smart contracts are witnessed by hundreds of users on the Ethereum blockchain, they cannot be manipulated of tampered with. Unlike traditional contracts, smart contracts do not need a middle man (such as a solicitor), to approve them. 

Ethereum smart contracts have multiple real world uses particularly in DeFi, they can be used for insurance agreements, rental contracts, financing agreements and much more. 

Ethereum Proof of Work 

Proof of work is designed so that a centralised company or government is not required to run Ethereum. Ethereum proof of work is the mechanism that allows the whole decentralised network on Ethereum to come to agreement on certain things like transaction orders and ETH account balances.  

Proof of Work also determines the rules for Ethereum mining, such as mining’s rules and difficulty level. Ethereum is moving from Proof of Work to Proof of Stake in Ethereum 2.0 (details below). 

Ethereum Virtual Machine 

In simple terms the Ethereum Virtual Machine (EVM), is a global virtual computer on the blockchain that allows the smart contracts on the Ethereum network to interact with each other. 

Why has Ethereum Gas gone up in price recently? 

A number of factors contribute to the sharp rise in Ethereum gas costs that we are experiencing in 2021. Firstly, a number of ERC-20 based projects are continuously growing in popularity including the ever-increasing use of stablecoinsDefi (decentralised finance) and NFTs (Non-Fungible Tokens)

Additionally, the rise in popularity of Ethereum itself has caused its price to rise to all-time highs, this has resulted in massively inflated gas prices. 

To put the rise in gas prices in to perspective, in the previous bull run of 2017/early 2018 average transaction costs reached a peak of $5.70 per transaction; but in 2021 prices have been on average $30 per transaction! 

What is Ethereum Gas

What Are Ethereum’s Uses? 

The key purpose of the Ethereum network is to create and operate smart contracts and decentralised apps (Dapps). These projects are built as ERC-20 tokens, ERC-20 tokens are so popular with developers that there are over 200,000 ERC-20 tokens currently on the Ethereum network. ERC-20 is regularly used to create new NFT (Non Fungible Token), DeFi (Decentralised Finance) and stable coin tokens. The top ERC-20 tokens are TetherUniswapChainlink, ThetaVeChain

Additionally, ETH is used as both a digital currency and store of value much like Bitcoin

Ethereum 2.0 

Ethereum 2.0 also known as serenity is an upgrade to Ethereum’s existing blockchain. Its primary goals are to improve the speed of Ethereum and make it more scalable in order to allow more transactions. 

Ethereum introduces both Proof of Stake & Sharding. Proof of stake replaces miners with validators; validators provide the computing power necessary to facilitate transactions. Validators are rewarded for their efforts in ETH. Sharding splits one blockchain in to multiple blockchains, this makes the system more efficient. 

In addition to its increased saleability, the main benefits of Ethereum 2.0 are that its more decentralised, more secure and less likely to be manipulated. 

Key Statistics 

Ethereum is ranked number 2 in terms of market cap, at the time of writing this is $257,822,335,808. 

The price per ETH is $2,229.63 and the circulating supply is 115,532,413 ETH. 

At its all-time high price April 16th 2021 ETH reached $2,547.56 meaning a total market cap of over $294 billion. 

Where Can I Buy Ethereum? 

As the second highest ranked cryptocurrency in terms of market capitalisation it is also available on all of the main cryptocurrency exchanges as well as a number of decentralised exchanges. 

These are including but not limited to: 

For a more detailed look in to which exchanges offer experience, visit our Best Ethereum Exchanges page.