There’s one blockchain that is arguably more influential than any other – Ethereum.
As the first blockchain to support smart contracts and decentralized applications (dApps), Ethereum revolutionized what blockchain technology could be. Today, it forms the heart of many of web3’s biggest niches: NFTs, blockchain gaming, DeFi and more.
Ethereum has a dedicated development team that endlessly pursues faster speeds, better reliably, and cheaper fees – but how has Ethereum become the monolith it is today, and what should you know about its past, present and future?
Master the topic, as we explain the Ethereum blockchain in 2024.
What is the Ethereum blockchain?
Ethereum is the creation of Vitalik Buterin, a talented programmer and co-founder of Bitcoin Magazine, who publishing the initial whitepaper in 2013.
Following crowdfunding in 2014, Buterin – with Gavin Wood, Charles Hoskinson, Anthony Di Iorio and Joseph Lubin – launched the Layer-1 Ethereum blockchain on July 30, 2015.
On launch, Ethereum was the first blockchain that supported the development of decentralized applications (dApps). It’s popularity saw ETH become the world’s second-largest cryptocurrency – a position it still holds today.
Ethereum quickly spurned the development of some of the biggest dApps we know today, such as OpenSea, Uniswap and MakerDAO (now Sky). Ethereum was the first blockchain that saw Layer-2 protocols, such as Polygon and Immutable, allowing specific niches such as entertainment and gaming to find dedicated support.
In 2024, Ethereum continues to work towards their long-term roadmap, conceptualising an “Ethereum 2.0” with improved scalability, lower costs, and heightened decentralization.
Why is Ethereum so important?
The reason for Ethereum’s prominence is the Ethereum Virtual Machine (EVM), a Turing-complete system that allows developers to write smart contracts – blockchain-based apps – using the programming language Solidity.
On Ethereum, each transaction requires a certain amount of computational power to complete. Users must pay a Gas fee (in ETH) to cover the cost of using this power. The amount of gas required depends on the size of the transaction, and the current transactional load of Ethereum.
In late 2017, the popularity of CryptoKitties slowed Ethereum to a crawl, sending gas fees through the roof. Since then, Ethereum has focused on improving speeds, reliability and costs – with the transition from the Proof-of-Work to Proof-of-Stake in September 2022 providing the foundation for the modern Ethereum we see today.
Today, Ethereum is at the heart of a great many blockchain industries, including finance, gaming, social media, and much more.
The story of Ethereum so far
In late 2013, Vitalik Buterin published the first Ethereum whitepaper – and after it gained traction, and a $18M crowdfunding effort was completed – the Ethereum mainnet went live on July 30, 2015.
2016 saw a major exploit in the smart contract of The DAO, resulting in the loss of $50 million USD of ETH. In response, the community voted for a hard fork, creating two separate blockchains: Ethereum (ETH) and Ethereum Classic (ETC).
Thanks to the popularity of CryptoKitties, Ethereum saw heavy congestion in 2017, which spurned the creation and popularity of dedicated Layer-2 blockchain such as Polygon and Immutable, and served as inspiration for a new cohort of Layer-1 blockchains, such as Flow, Avalanche, and Solana.
Ethereum’s biggest update in its history, “The Merge”, took place in September 2022. This transitioned Ethereum from Proof-of-Work to Proof-of-Stake, reducing its energy consumption by 99%, laying the groundwork for an updated validator mechanism, and putting measures in place to help reduce gas fees.
Ethereum’s Dencun update went live in March 2024, helping to reduce fees on Layer-2 networks and pushing the blockchain towards its current target, the so-called “Ethereum 2.0” status.
In July 2024, Ethereum exchange-traded funds (ETFs) were approved by the U.S. SEC, exposing the blockchain and the ETH cryptocurrency to both institutional and everyday investors around the world.
Ethereum’s influence as the leading blockchain in the industry looks set to continue. Although the blockchain faces more competition than ever before, Ethereum is still firmly ahead of its rivals, and it will continue to be the flagship blockchain for many years to come.
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