What Is Ethereum (ETH)? Founder, Ethereum Uniqueness
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What Is Ethereum (ETH)?
Ethereum is a decentralized open-source blockchain system that features its own cryptocurrency, Ether. ETH works as a platform for the execution of decentralized smart contracts along with many other cryptocurrencies.
Ethereum was first described in a 2013 white paper by Vitalik Buterin. Buterin, along with other co-founders, secured funding for the project in an online public crowdsale in the summer of 2014. The project team managed to raise $18.3 million in bitcoin, and the initial coin offering (ICO) cost Ethereum $0.311. , over 60 million ethers were sold. Taking the price of Ethereum now, it puts the return on investment (ROI) at an annualized rate of over 270%, essentially nearly quadrupling your investment every year since the summer of 2014.
The Ethereum Foundation officially launched the blockchain on July 30, 2015 under a prototype code named "Frontier". Since then, there have been several network updates - "Constantinople" on February 28, 2019, "Istanbul" on December 8, 2019, "Muir Glacier" on January 2, 2020, "Berlin" on April 14, 2021, and most recently "London" hard fork on August 5, 2021.
Ethereum's stated goal is to become a global platform for decentralized applications, allowing users around the world to write and run software that is resistant to censorship, downtime, and fraud.
Who Are the Founders of Ethereum?
Ethereum has a total of eight co-founders – an unusually large number for a crypto project. They first met on 7 June 2014 in Zug, Switzerland.
- Russian-Canadian Vitalik Buterin is probably the best known of the bunch. He wrote the original white paper that first described Ethereum in 2013 and continues to work on improving the platform today. Prior to ETH, Buterin co-founded and wrote the Bitcoin Magazine news website.
- British programmer Gavin Wood is arguably the second most important co-founder of ETH, as he coded the first technical implementation of Ethereum in the C++ programming language, proposed Solidity, Ethereum's native programming language, and was the first chief technology officer of the Ethereum Foundation. . Prior to Ethereum, Wood was a research scientist at Microsoft. Later, he founded the Web3 Foundation.
Among the other co-founders of Ethereum is Anthony Di Iorio, who co-wrote the project during the early stages of development. – Charles Hoskinson, who played a major role in establishing the Swiss-based Ethereum Foundation and its legal framework. – Mihai Alisi, who helped set up the Ethereum Foundation. — Joseph Lubin, a Canadian entrepreneur who, like Di Iorio, helped fund Ethereum in its early days, and later founded an incubator for ETH-based startups called ConsenSys. – Amir Chetrit, who helped co-found Ethereum but shunned it early in development.
What Makes Ethereum Unique?
Ethereum pioneered the concept of a blockchain smart contract platform. Smart contracts are computer programs that automatically perform actions necessary to complete an agreement between multiple parties over the Internet. They were designed to reduce the need for reliable intermediaries between contractors, thus increasing the reliability of transactions while also reducing transaction costs.
Ethereum's major innovation was creating a platform that allowed it to execute smart contracts using the blockchain, further reinforcing the already existing benefits of smart contract technology. Ethereum's blockchain was designed to be "a computer for the whole planet," according to co-founder Gavin Wood, making any program theoretically more robust, censorship-resistant, and preventing fraud by running it globally. Was able to reduce the chances. The distributed network of public nodes.
In addition to smart contracts, Ethereum's blockchain is able to host other cryptocurrencies called "tokens" through the use of its ERC-20 compatibility standard. In fact, this has been by far the most common use for the ETH platform: over 280,000 ERC-20-compliant tokens have been launched so far. More than 40 of these make up the top-100 cryptocurrencies by market capitalization, for example, USDT, LINK, and BNB. Since the emergence of Play2Earn Games, there has been a substantial increase in interest in ETH to a PHP value.
Ethereum London Hard Fork
The Ethereum network has been plagued by high transaction fees, which are often low in seasons of high demand. In May 2021, the network's average transaction fee reached $71.72.
Apart from the high transaction fees, the major altcoins also suffer from scalability issues.
As already mentioned, there are plans to transition to a proof-of-stake algorithm to boost the scalability of the platform and add a number of new features. The development team has begun the transition process to ETH 2.0, implementing some upgrades along the way, including the London hard fork.
The London Upgrade went live in August 2021. This included five Ethereum Improvement Proposals (EIPs), namely EIP-3529, EIP-3198, EIP-3541, and most notably EIP-1559 and EIP-3554.
The EIP-1559 is arguably the most popular upgrade out of all the EIPs.
What Is EIP-1559?
The EIP-1559 upgrade introduces a mechanism that changes the way gas charges are estimated on the Ethereum blockchain. Before the upgrade, users had to participate in an open auction conducted by a miner for their transactions. This process is known as a "first-price auction" and, as expected, the highest bidder wins.
With EIP-1559, this process is handled by an automated bidding system, and a "base fee" is set for transactions to be included in the next block. This fee varies depending on how congested the network is. In addition, users who want to speed up their transactions can pay a “priority fee” to miners for faster inclusion.
EIP-1559 also includes a duty reduction mechanism. A portion of each transaction fee (Aadhaar fee) is burned and taken out of circulation. It aims to reduce the circulating supply of Ether and potentially increase the value of the token over time.
Interestingly, less than two months after the London upgrade was implemented, the network had burned over $1 billion worth of ether.
How Many Ethereum (ETH) Coins Are There In Circulation?
In September 2021, there were approximately 117.5 million ETH coins in circulation, of which 72 million were issued in the Genesis block – the first block on the Ethereum blockchain. Of these 72 million, 60 million were allocated to the 2014 crowdsale to the initial contributors that funded the project, and 12 million were given to the development fund.
The remaining amount is issued as block rewards to miners on the Ethereum network. The original reward was 5 ETH per block in 2015, which later dropped to 3 ETH at the end of 2017 and then to 2 ETH in early 2019. The average time taken to mine an Ethereum block is around 13-15 seconds.
In the August 2021 Ethereum network upgrade, the London hard fork included the Ethereum Improvement Protocol, EIP-1559. Instead of a first-price auction mechanism where the highest bidder wins, EIP-1559 introduces a "base fee" for transactions to be included in the next block. Users who wish to prioritize their transactions can pay a "tip" or a "priority fee" to the miners. Since the base fee adjusts dynamically with transaction activity, it reduces the volatility of the Ethereum gas fee, although it does not reduce the price, which is notoriously high during peak congestion on the network.
A major difference between the economics of bitcoin and ethereum is that the latter is not deflationary, i.e. its aggregate supply is not limited. Ethereum's developers don't want to have a "fixed security budget" for the network, justifying it. Being able to adjust the issuance rate of ETH through consensus allows the network to issue the minimum required for adequate security.
However, with the introduction of EIP-1559, the base fee used in the transaction ceases, ETH is taken out of circulation. This means that higher activity on the network will burn more ETH, and dwindling supply should lead to an appreciation in the price of Ethereum, all things being equal. This has the potential to deflate Ethereum, something ETH holders are excited about - a potential appreciation in the price of Ethereum today.
How Is the Ethereum Network Secured?
In September 2021, there were approximately 117.5 million ETH coins in circulation, of which 72 million were issued in the Genesis block – the first block on the Ethereum blockchain. Of these 72 million, 60 million were allocated to the 2014 crowdsale to the initial contributors that funded the project, and 12 million were given to the development fund.
The remaining amount is issued as block rewards to miners on the Ethereum network. The original reward was 5 ETH per block in 2015, which later dropped to 3 ETH at the end of 2017 and then to 2 ETH in early 2019. The average time taken to mine an Ethereum block is around 13-15 seconds.
In the August 2021 Ethereum network upgrade, the London hard fork included the Ethereum Improvement Protocol, EIP-1559. Instead of a first-price auction mechanism where the highest bidder wins, EIP-1559 introduces a "base fee" for transactions to be included in the next block. Users who wish to prioritize their transactions can pay a "tip" or a "priority fee" to the miners. Since the base fee adjusts dynamically with transaction activity, it reduces the volatility of the Ethereum gas fee, although it does not reduce the price, which is notoriously high during peak congestion on the network.
A major difference between the economics of bitcoin and ethereum is that the latter is not deflationary, i.e. its aggregate supply is not limited. Ethereum's developers don't want to have a "fixed security budget" for the network, justifying it. Being able to adjust the issuance rate of ETH through consensus allows the network to issue the minimum required for adequate security.
However, with the introduction of EIP-1559, the base fee used in the transaction ceases, ETH is taken out of circulation. This means that higher activity on the network will burn more ETH, and dwindling supply should lead to an appreciation in the price of Ethereum, all things being equal. This has the potential to deflate Ethereum, something ETH holders are excited about - a potential appreciation in the price of Ethereum today.
Where Can You Buy Ethereum (ETH)?
Given the fact that Ethereum is the second-largest cryptocurrency after Bitcoin, it is possible to buy Ethereum or use ETH trading pairs on almost all major crypto exchanges. Some of the largest markets include:
- Binance
- Coinbase Pro
- OKEx
- Kraken
- Huobi Global
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