Ethereum is the first blockchain project to implement smart contract functions. It carries the largest ecosystem and is currently the second largest project in the crypto.
Ethereum was proposed in late 2013 by Vitalik Buterin, providing a programmable transaction functionality that enables developers to eploy smart contracts,accelerating the birth of dApps for various purposes. In 2014, development work began and was crowdfunded, and the network went live on 30 July 2015.
The milestone event of Ethereum happened in September 2022, the merge of Ethereum was completed. Ethereum 2.0 was a set of three or more upgrades, also known as "phases", meant to transition the network's consensus mechanism to proof-of-stake, and to scale the network's transaction throughput with execution sharding and an improved EVM architecture. The switch from proof-of-work to proof-of-stake has cut Ethereum's energy usage by 99%.
In April 2023,Ethereum completed the upgrade of Shanghai, since then, users could withdraw the ETH staked at the node. This flexible mechanism has also gradually increased the amount of staked Ethereum.
Above are only for introduction, not intended as investment advice.
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Ethereum is fundamentally a decentralized network of computers worldwide that adhere to a protocol known as the Ethereum protocol. This network provides the underlying architecture for a variety of applications, communities, organizations, and digital assets. Unlike traditional centralized systems, Ethereum operates without a central authority, allowing users to create accounts, explore a wide array of applications, or even build their own applications without the need for trust in a controlling entity.
Ethereum is classified within the "Smart Contract Platform(Layer 1)" sector. This sector includes decentralized systems that enable self-executing contracts on blockchains, supporting secure, transparent, and tamper-proof execution of predefined conditions. Smart Contract platforms(Layer 1) are ideal for trustless applications such as finance, supply chain management, and voting systems. They are categorized into large blockchain platforms, smaller ones optimized for execution speed or cost, private frameworks, and specialized tools for crafting and managing smart contracts.
Market Size: The Smart Contract(Layer 1) market was valued at USD 392.84 million in 2022 and is expected to grow at a CAGR of 24.11%, reaching USD 1435.84 million by 2028. Applications: Smart Contract(Layer 1) are being increasingly adopted across various sectors including finance, government, insurance, healthcare, and supply chain.
Ethereum's Dominance: Ethereum remains the most popular platform for smart contracts, owing to its highly decentralized security and substantial community support. Ethereum introduced the Ethereum Virtual Machine (EVM), which manages the state of the blockchain and enables smart contract functionality.
Innovation and Scalability: The sector is witnessing continuous innovation, particularly in addressing blockchain scalability challenges. This innovation is crucial for building Web 3.0 applications. Newer blockchain platforms almost uniformly support smart contracts and many are compatible with Ethereum's EVM, enabling decentralized applications (dApps) that run on Ethereum to also run on these platforms.
Trade-offs in Platform Selection: When choosing a smart contract platform, considerations include security features, scalability potential, performance, cost, and the strength of the developer community. Each platform offers unique benefits and compromises. For instance, while Ethereum has the strongest developer community, it also has the highest cost per transaction.
Ethereum's tokenomics, including its allocation, supply schedule, and the mechanism for creating and managing its supply, are detailed as follows:
Ethereum Crowdsale: The initial distribution of Ethereum (ETH) allocated 83.33% of the total supply to the Ethereum Crowdsale.
Ethereum Foundation, Early Contributors & Others: The remaining 16.68% was allocated to the Ethereum Foundation, early contributors, and others involved in the project's early stages.
Transition to Proof-of-Stake (PoS): The Merge, which occurred in September 2022, marked Ethereum's transition from proof-of-work (PoW) to PoS. This transition significantly altered the ETH issuance process.
ETH Issuance: Under PoS, approximately 1,700 ETH are issued daily to stakers, based on about 14 million total ETH staked. This issuance rate can fluctuate depending on the total amount of ETH staked.
Reduction in Issuance: The shift to PoS reduced the total new ETH issuance by about 88%, as the pre-PoS mining issuance of approximately 13,000 ETH/day ceased.
Burning of ETH: Concurrently, ETH is also burned as part of transaction fees. The base fee, paid in ETH for each transaction, is burned, removing it from circulation. This burning mechanism was introduced with the London upgrade in August 2021.
Inflation/Deflation Balance: The interplay between the issuance and burning of ETH affects the overall inflation or deflation rate of the Ethereum currency. If the average gas price stays at or above 16 gwei for a day, the amount of ETH burned can offset the \~1,700 ETH issued to validators, potentially bringing net ETH inflation to zero or even negative.
Ethereum's development and management involve a blend of key individuals and collaborative efforts among various entities. Here's an overview of the team behind Ethereum and its funding history:
Vitalik Buterin: The most well-known figure behind Ethereum, Buterin co-founded Bitcoin Magazine and was instrumental in conceptualizing Ethereum. He remains actively involved in the Ethereum Foundation and leads the research team.
Ethereum Foundation: This organization supports the Ethereum project through research, development, and education. The Foundation is instrumental in ensuring the Ethereum infrastructure functions effectively and fairly.
Ming Chan and Jeffrey Wilcke: Chan serves as the Executive Director of the Ethereum Foundation, and Wilcke is a founder who implemented Ethereum in the Go programming language and has been its head developer.
Other Founders: Additional founders include Joseph Lubin, who also founded ConsenSys, and Charles Hoskinson, who left to found Cardano.
Enterprise Ethereum Alliance (EEA): Formed in 2017, the EEA includes blockchain startups, research groups, and Fortune 500 companies. It works on defining new business avenues for Ethereum.
Initial Concept and Development (2013-2014): Ethereum was initially proposed by Vitalik Buterin in a white paper in late 2013. The formal development began in early 2014 through Ethereum Switzerland GmbH (EthSuisse). The project was announced at the North American Bitcoin Conference in Miami in January 2014.
Crowdsale Funding: Ethereum's development was primarily funded by an online public crowdsale from July to August 2014, where the Ethereum value token (ether) was sold for bitcoin. This method of funding helped kickstart the development and implementation of the Ethereum platform.
Launch and Subsequent Developments (2015-2016): Ethereum officially launched in July 2015. The platform has since undergone several protocol upgrades, including the notable DAO event in 2016, which resulted in a contentious hard fork, creating Ethereum and Ethereum Classic.
Continued Growth and Alliance Formations (2017-present): The creation of the Enterprise Ethereum Alliance in 2017 marked a significant step in Ethereum's growth, attracting major corporate members. Further investments and partnerships continued to support the platform's expansion, including investments from Visa Inc., JP Morgan Chase, and others. Ethereum's journey from concept to a leading blockchain platform has been marked by collaborative efforts, key individual contributions, and innovative funding methods. The project has evolved through various stages, adapting to technological challenges and expanding its influence across multiple sectors.
List all important events and milestones in the development process of Ethereum.
The development of Ethereum has seen several significant milestones and events over the years. Here's a chronological list of these key developments:
2016 - Spurious Dragon: On November 22, 2016, this upgrade responded to denial of service (DoS) attacks, including tuning opcode pricing, enabling “debloat” of the blockchain state, and adding replay attack protection.
2017 - Byzantium: Launched on October 16, 2017, it reduced block mining rewards from 5 to 3 ETH, delayed the difficulty bomb, added the ability to make non-state-changing calls to other contracts, and introduced certain cryptography methods for layer 2 scaling.
2019 - Constantinople: On February 28, 2019, this fork reduced mining rewards from 3 to 2 ETH, optimized the gas cost of certain EVM actions, and added the ability to interact with future addresses. Later in the same year, the Istanbul fork (December 8, 2019) optimized gas costs, improved DoS resilience, enhanced Layer 2 scaling, and enabled Ethereum-Zcash interoperability.
2020 - Muir Glacier and Staking Deposit Contract: Muir Glacier, deployed on January 2, 2020, delayed the difficulty bomb, which threatened to degrade usability by increasing transaction times. On October 14, 2020, the staking deposit contract was deployed, introducing staking to Ethereum and impacting the Beacon Chain's timeline. The Beacon Chain itself began on December 1, 2020, marking a significant step towards Ethereum's vision.
2021 - Berlin, London, Altair, and Arrow Glacier: The Berlin upgrade (April 15, 2021) optimized gas costs and supported multiple transaction types. The London upgrade (August 5, 2021) introduced EIP-1559, reforming the transaction fee market. Altair, the first Beacon Chain upgrade (October 27, 2021), added "sync committees" and increased penalties for validators. Arrow Glacier (December 9, 2021) delayed the difficulty bomb.
2022 - Gray Glacier, Bellatrix, and Paris (The Merge): The Gray Glacier upgrade (June 30, 2022) further delayed the difficulty bomb. Bellatrix (September 6, 2022) prepared the Beacon Chain for The Merge by updating fork choice rules and increasing penalties. The Paris upgrade (September 15, 2022), known as The Merge, transitioned Ethereum from proof-of-work to proof-of-stake, a major milestone in its history.
2023 - Shanghai and Capella: Most recently, in April 2023, the Shanghai and Capella upgrades enabled staking withdrawals from the Beacon Chain to the execution layer.
Regarding Ethereum's future roadmap, several improvements are planned:
Cheaper Transactions: The roadmap includes plans to make rollups less expensive and less reliant on centralized components.
Extra Security: Ethereum aims to become even stronger against various forms of attacks.
Better User Experience: Enhancements for smart contract wallets and light-weight nodes are planned to simplify and secure the use of Ethereum.
Future Proofing: Researchers and developers are focused on solving potential future challenges to ready the network for coming generations.
Upcoming technical upgrades include: Danksharding for cheaper layer 2 rollups. Single slot finality for faster block finalization. Proposer-builder separation for fairer consensus. Secret leader election to protect block proposers from attacks. Account abstraction for native smart contract wallet support. Verkle trees and statelessness for efficient, lightweight node operation.
These ongoing and planned developments reflect Ethereum's commitment to scalability, security, and sustainability.
Here are the important links related to the significant events and milestones in Ethereum's development, as well as its future roadmap:
Ethereum's History and Milestones:
https://ethereum.org/en/history/#spurious-dragon
https://ethereum.org/en/history/#byzantium
https://ethereum.org/en/history/#constantinople
https://ethereum.org/en/history/#istanbul
https://ethereum.org/en/history/#muir-glacier
https://ethereum.org/en/history/#staking-deposit-contract
https://ethereum.org/en/history/#beacon-chain-genesis
https://ethereum.org/en/history/#berlin
https://ethereum.org/en/history/#london
https://ethereum.org/en/history/#altair
https://ethereum.org/en/history/#arrow-glacier
https://ethereum.org/en/history/#gray-glacier
https://ethereum.org/en/history/#bellatrix
https://ethereum.org/en/history/#paris
https://ethereum.org/en/history/#shanghai
https://ethereum.org/en/history/#capella
https://ethereum.org/en/upgrades/
These links lead to the official Ethereum website, providing detailed information on each upgrade and the overall development trajectory of the Ethereum blockchain.
Ethereum is a leading blockchain platform known for its smart contract functionality and wide range of decentralized applications. Its transition from proof-of-work to proof-of-stake via The Merge has been a major step in enhancing its efficiency and sustainability. The ongoing and future roadmap, focusing on cheaper transactions, improved security, better user experience, and advanced technical upgrades like Danksharding and Verkle trees, suggests a strong commitment to innovation and scalability.
While predicting the exact future value of Ethereum or its bullishness index is challenging and speculative, its continued development and the active community support highlight its significant potential in the blockchain space. Remember, investing in cryptocurrencies involves risk, and it's important to make informed decisions.
Ethereum is the first blockchain project to implement smart contract functions. It carries the largest ecosystem and is currently the second largest project in the crypto.
Ethereum was proposed in late 2013 by Vitalik Buterin, providing a programmable transaction functionality that enables developers to eploy smart contracts,accelerating the birth of dApps for various purposes. In 2014, development work began and was crowdfunded, and the network went live on 30 July 2015.
The milestone event of Ethereum happened in September 2022, the merge of Ethereum was completed. Ethereum 2.0 was a set of three or more upgrades, also known as "phases", meant to transition the network's consensus mechanism to proof-of-stake, and to scale the network's transaction throughput with execution sharding and an improved EVM architecture. The switch from proof-of-work to proof-of-stake has cut Ethereum's energy usage by 99%.
In April 2023,Ethereum completed the upgrade of Shanghai, since then, users could withdraw the ETH staked at the node. This flexible mechanism has also gradually increased the amount of staked Ethereum.
Above are only for introduction, not intended as investment advice.