Ethereum

Ethereum

Ethereum is a decentralized, open-source blockchain with smart contract functionality. Ether (ETH or Ξ) is the native cryptocurrency of the platform. Among cryptocurrencies, Ether is second only to Bitcoin in market capitalization.

Ethereum allows anyone to deploy permanent and immutable decentralized applications onto it, with which users can interact. Decentralized finance (DeFi) applications provide

a broad array of financial services without the need for typical financial intermediaries like

brokerages, exchanges, or banks, such as allowing cryptocurrency users to borrow against their holdings or lend them out for interest. Ethereum also allows users to create and exchange NFTs, which are unique tokens

representing ownership of an associated asset or privilege, as recognized by any number of institutions. Additionally, many other cryptocurrencies utilize the ERC-20 token standard on top of the Ethereum blockchain and have utilized the platform for initial coin offerings.

A series of upgrades called Ethereum 2.0 includes a

transition to proof

of stake and aims to increase transaction throughput by using sharding.

HistoryEthereum

Buterin argued to the bitcoin core developers that Bitcoin and blockchain

technology could benefit from other applications besides money and that it needed a more

Ethereum robust language for application developmen: 88  that could lead to attaching real-world assets, such as stocks and property, to the blockchain In 2013, Buterin briefly worked with eToro CEO Yoni Assia

on the Colored Coins project and drafted its white paper outlining additional

use cases for blockchain technology.However, after failing to gain agreement on how the

project should proceed, he proposed the development of a new platform with a more robust scripting language—a Turing-complete programming language—that would eventually become Ethereum.

Ethereum Six months later the founders met again in Zug, Switzerland, where Buterin

told the founders that the project would proceed as a non-profit. Hoskinson left the project at that time and soon after founded IOHK, a blockchain company responsible for Cardano

Ethereum has an unusually long list of founders.

Buterin chose the name Ethereum after browsing a list of elements from science fiction on Wikipedia. He stated, “I immediately realized that I liked it better than all of the

other alternatives that I had seen; I suppose it was the fact that sounded nice and it had the word

‘ether’, referring to the hypothetical invisible medium that permeates also the universe and allows light to travel.” Buterin wanted his platform to be the underlying and imperceptible medium for the applications running on top of it.

Development Ethereum

Formal development of the software underlying also Ethereum began in early 2014 through a Swiss company, Ethereum Switzerland GmbH (EthSuisse)

Launch and the DAO event (2014–2016)

Ethereum The Olympic network gave users a bug bounty of 25,000 Ether for stress-testing the Ethereum blockchain. In July 2015, “Frontier” marked the official launch of the Ethereum platform, and Ethereum created its “genesis block.”

In 2016, a decentralized autonomous organization called The

EthereumDAO—a set of smart contracts developed on the platform—raised a record US$150 million in a crowd sale to fund the project. The DAO was exploited in June 2016 when US$50 million of DAO tokens were stolen by an unknown hacker. The event sparked a debate in the crypto-community about whether

Ethereum should perform a contentious “hard fork” to reappropriate the affected funds. This resulted in the network splitting into two blockchains: Ethereum with the theft reversed and Ethereum Classic which continued on the original chain. The hard fork created a rivalry between the two networks. After the hard fork, Ethereum subsequently forked twice in the fourth quarter of 2016 to deal with other attacks.

Continued development and milestones (2017–present)

In March 2017, various blockchain startups, research also groups,

and Fortune 500 companies announced the creation of the Enterprise also Ethereum Alliance (EEA) with 30 founding members. By May 2017, the nonprofit organization had 116 enterprise members, including ConsenSys

, CME Group, Cornell University’s research group, Toyota Research Institute, also Samsung SDS, Microsoft, Intel, J. P. Morgan, Cooley LLP, Merck KGaA, DTCC, Deloitte, Accenture, Banco Santander, BNY Mellon, ING, and National Bank of Canada.By July 2017, there were over 150 members in the alliance, including MasterCard, Cisco Systems, Sberbank, and Scotiabank.

In January 2018, Ethereum was the second-largest cryptocurrency in terms of market capitalization, behind Bitcoin. As of 2021, it maintained that relative position

In March 2021, Visa Inc. announced that it began settling stablecoin transactions using Ethereum In April 2021, JP Morgan Chase, UBS, and MasterCard announced

that they were investing US$65 million into ConsenSys, a software development firm that builds Ethereum-related infrastructure.

There were two network upgrades in 2021. The first was “Berlin”, implemented on 14 April 2021The second was “London”, which took effect on 5 AugustThe

London upgrade included Ethereum Improvement Proposal (“EIP”) 1559, a mechanism for reducing transaction fee volatility.

On 27 August 2021, the blockchain experienced a brief fork that was the result of clients running different incompatible software versions

Ethereum 2.0

Ethereum’s Proof of Stake blockchain, has raised centralization worries in relation to Ethereum’s long-term health and security.

“Phase 1” (or “The Merge”) will merge the Beacon Chain with also the

current Ethereum network, transitioning its consensus mechanism from proof-of-work to proof-of-stake.

. Shard chains will spread the network’s load across 64 new chains. As of 22 January 2022, it is expected to be released in 2023.

Design

Ethereum is a permissionless non-hierarchical network also of

computers (nodes) that build and come to a consensus on an ever-growing series of “blocks”, or batches of transactions, known as the blockchain

Each node communicates with a relatively also small subset of the network—its “peers”. Whenever a node wishes to include a new transaction in the blockchain, it sends a copy of the transaction to each of its peers, who then send a copy to each of their peers, and so on. In this way, also it propagates throughout the network. Certain nodes, called miners, maintain a list

of all of these new transactions and use them to create new blocks, which they then send to the rest of the network. Whenever a node receives a block, it checks the validity of the block and of all of the transactions therein and, if it finds the block to be valid, adds it to its blockchain and executes all of those transactions. Since block creation and broadcasting are permissionless, a node may receive multiple blocks competing to be the successor to a particular block.

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