Everything to Know About Ethereum (ETH)
Meta: Ethereum is a cryptocurrency known the world over. Despite its popularity, there is a lot to know about this vaunted coin.
The world of cryptocurrency is still a relatively new one. In just over a decade, crypto has emerged as one of the most dynamic and volatile investment categories globally. In the wake of Bitcoin’s revolutionary launch, Ethereum has taken its place as the second largest coin on the market.
Though there is much focus on Ethereum price, there is more to the vaunted cryptocurrency than meets the eye. Read on to get the most comprehensive background on Ethereum, including how it works, its founders, what makes it unique, and a litany of other things.
What is Ethereum?
To put it simply, Ethereum is a decentralized global software program that is built on the Ethereum blockchain. Most, however, refer to it by the name of its native coin, ether (ETH). The thing about Ethereum is that it can be used by everyone.
The platform is meant to not only be secure to all users, but decentralized, programmable, and scalable. The token is meant to pay for the work done to support that blockchain, though participants are now able to use those coins to pay for tangible services and goods where accepted.
How Does Ethereum Work?
Ethereum is built on the blockchain technology. Transactions and other data are encoded on the blockchain, unalterable after being verified. Each cell is created using new ether tokens, awarded to the validator for the work that it takes to validate the information.
Using the Proof-of-Stake process, validators must stake 32 ETH to activate the ability to validate. Individuals can stake with a smaller amount but must join a pool and share rewards. The goal is to create a proven validation system where those who are dishonest are punished by having their stake burned and their access to the network revoked.
Who are the Founders of Ethereum?
The conception of Ethereum comes from Vitalik Buterin in 2013. He eventually teamed up with Gavin Wood, Anthony Di Iorio, Joseph Lubin, and Charles Hoskinson. Each played a unique role in the process, though Hoskinson left before the protocol was launched.
The creators of Ethereum have had a noted history of feuds between them. Hoskinson, in particular, founded the Cardano blockchain, known as an “ETH killer.” Likewise, Wood founded Polkadot, another “ETH killer” crypto network.
Ethereum’s Core Utility and Ecosystem
At its very core, Ethereum is meant to be a decentralized blockchain platform that allows for the creation and deployment of decentralized apps and smart contracts. These facilitate interactions and transactions without the need of an intermediary.
Whether at an individual or institutional level, Ethereum provides a safe place to execute these smart contracts. With its Proof-of-Stake method, the requirement of staking incentivizes validators while discouraging those aiming to commit fraudulent transactions.
What Makes Ethereum Unique?
It would take an entire space to call out everything that Ethereum is doing to differentiate itself I the crypto market. Let’s break it down to the most relevant aspects:
Non-Fungible Tokens (NFTs). Ethereum is one of the leading platforms when it comes to NFTs, unique digital assets. These assets can represent any number of items, including collectibles and artwork.
Proof-of-Stake (PoS). Ethereum has shifted to a Proof-of-Stake consensus protocol. Those wishing to become validators must stake 32 ETH or combine into a pool. The goal is to ensure less volatility and deter fraud among validators.
Decentralized Finance (DeFi). The DeFi space is growing with Ethereum at the forefront. It allows for borrowing, peer-to-peer lending, and a litany of other financial services that don’t require traditional financial institutions.
Smart Contracts and Apps. The core of Ethereum’s strength is in its smart contracts. Thes are self-executing agreements written directly into the Ethereum code. These applications operate without any central authority, providing security, reduced reliance on middlemen, and greater transparency.
Ethereum Virtual Machine (EVM). One of the latest additions to the Ethereum repertoire, this decentralized computer executes smart contract code, providing reliable and consistent execution across the entirety of the network.
Open Source and Community-Driven. Ethereum encourages interaction and contributions from the community. With open source code, it is freely available to anyone who wants to modify, build upon, and examine the code, creating a truly collaborative experience.
What is Ethereum Name Service?
This is a decentralized naming protocol built entirely on the Ethereum blockchain. It uses open source standards, based on decentralized smart contracts that work to translate addresses within the blockchain to names that are readable by people.
Instead of trying to remember a complex crypto address, it is possible for users to share their ENS name instead. It is also worth noting that ENS is not just a naming service, but more of a wider blockchain ecosystem.
ENS works to cross chain long addresses from content hashes, crypto wallets, smart contracts, metadata, and more. The concept of ENS was launched in April 2016 and the first ENS names were minted in May 2017. ENS stores the data in its records, but records aren’t limited to just Ethereum addresses.
What is an Ethereum Killer?
With great status comes many challenges. An Ethereum killer involves the creation of other blockchain platforms that were specifically engineered to compete with Ethereum. They were meant to create solutions to the limitations that Ethereum presents, like slow transaction speeds, scalability problems, and high fees.
Ethereum continues to combat these challenges with major upgrades released over its lifespan. It has worked to reduce rising gas (transaction) fees and to improve transaction speeds as well.
What is interesting is that some of the Ethereum killers have been created by members of the Ethereum founding team. Cardano and Polkadota are just two of the many names that include Tezos, Binance Smart Chain, Fantom, Solana, and more.
How Many Ethereum (ETH) Coins are There in Circulation?
Ethereum is interesting in that there is technically no finite number of coins available. That said, there is a built in mechanism that will slow the rate of coins created over time. With uncertainty about the true rarity of ETH, it leads to many questions.
Currently, there are slightly more than 120 million ETH coins in distribution. With the issuance of EIP-1559 (more on that below) as well as the true arrival of Ethereum 2.0, issuance of new Ether coins has drastically declined.
What is EIP-1559?
A goal of Ethereum is to improve efficiency and safety on the blockchain. One of those moves comes in the form of EIP-1559. This proposal is meant to help make Ethereum transactions more efficient through the use of a hybrid system of tips and base fees. The idea here is to incentivize miners in periods of both low and high network congestion.
The upgrade, introduced on August 5, 2021, made a change to how Ethereum calculates and processes “gas fees”, also known as network transaction fees. Using sender-specified max fees and block-based base fees, the incentivization of mining became much different.
It also increased the block size needed to create new ether coins. Combined with the burned transaction fees, there has been a decline in issuance of new coins. This is directly related to the technically unlimited supply of Ether (ETH).
A Brief History of Ethereum
Ethereum, a blockchain, was launched in 2015. Similar to its predecessor, Bitcoin, Ethereum sought to challenge Bitcoin in a rapidly growing cryptocurrency market. It experienced growing pains early on, suffering a $50 million hack in 2016.
Since then, there have been dramatic fluctuations in price of the native Ethereum coin, ether (ETH). Ethereum has made major upgrades since its launch, even changing its consensus protocol Proof-of-Stake, helping to reduce fraudulent transactions and deter dishonest users.
What’s Next for Ethereum?
The next major move for Ethereum comes in the form of Pectra. A combination of the Prague and Electra upgrades, this Q1 2025 release is putting a focus on improving efficiency and scalability while also creating enhanced staking.
Ethereum is always looking to improve transaction speeds and lower fees. Additionally, security measures are always changing to keep up with new technological challenges. Ethereum has implemented more than 20 different major upgrades since its launch in 2015 and will likely continue to make improvements.
What Can Ether (ETH) be Used for?
The real question is, “What can Ethereum be used for?” Like other forms of cryptocurrency, ether (ETH) can be used for purchasing goods and services where accepted. But its true power lies in its practical applications beyond payments.
For instance, it can be used to create a voting system in countries that have unstable democracies. It can also be used as a form of identification digitally, one of the major concerns in modern society. Data storage, applications in the health sector, and decentralized finance are just a few of the applications.
How is the Ethereum Network Secured?
Security is one of the major selling points of not just the Ethereum blockchain, but the technology as a whole. The reality is that even secure networks like Bitcoin and Ethereum are susceptible to security issues.
With the shift to a Proof-of-Stake consensus, more collateral is required to become a validator. This provides a significantly safer protocol for implementing validators. Ether must be provided as collateral, which can be confiscated if validators display malicious behavior. Mechanisms like these are meant to promote decentralization while also securing the network.
What is the Ethereum Pectra Upgrade?
Another upgrade, known as the Pectra Upgrade, is set to come very soon. The implementation of Pectra is meant to improve technical aspects of the network. It is a combination of both the Prague and Electra upgrades that optimize consensus and execution layers of Ethereum.
Ethereum continues to make significant upgrades to its network. Since The Merge in 2022, we have seen a change in the consensus protocol, a reduction in fees when it comes to Layer-2 scaling solutions, not to mention an improvement in speed on the blockchain. Pectra is yet another major leap that will reduce transaction fees, improve security, and introduce smart accounts.
Ethereum London Hard Fork
The London Hard Fork contained five key Ethereum Improvement Protocols meant to improve the platform. There is a believe that ETH coins can be mined over time, but EIP-1559 is aiming to change that.
Miners are no longer able to earn income from transaction fees. The supply of Ether in circulation will then begin to dwindle, which will raise the value of ETH overall. It is also meant to help make transaction fees on the platform more predictable for those using the blockchain.
Ethereum 2.0
Ethereum 2.0 is a broad term meant to cover the major changes to the Ethereum platform. These include improvements to the blockchain, addressing some of the most pressing technical hurdles.
Ethereum 2.0 was rolled out over a number of years, so this should not be considered a one-off event. It began with the launch of the Beacon Chain in December 2020, has included the move to a Proof-of-Stake system, and changes to validation measures. The goal is to make Ethereum more secure while also rewarding and stabilizing the list of validators available on the blockchain.
The Ethereum Merge
Ethereum executed what is known as The Merge on September 15, 2022. The idea was to shift from the previous Proof-of-Work protocol into a Proof-of-Stake system. There are several motivations behind this, but two stand out as being most prominent.
The first is to allow validators to stake ETH in order to claim rewards that come from the validation process. This creates a stronger, more honest network of validators. But the biggest reason is because of the massive energy costs that mining requires. By switching to a PoS system, Ethereum can drastically cut its energy consumption rates.
Ethereum Shanghai Upgrade
Taking place in April 2023, the Shanghai Upgrade gave validators the opportunity to withdraw their staked ETH and rewards. This was seen as a vital step in the transition to a full Proof-of-Stake (PoS) network.
This was seen as the finale move to a PoS network. Validators are now given the chance to withdraw their staked ETH, as well as any accrued rewards, from Ethereum’s Beacon Chain. There is also an imposed cap of 43,200 ETH per day for withdrawal amounts in order to prevent a mass migration of validators.
Ethereum’s Transition: From Proof-of-Work to Proof-of-Stake
The Merge was an important moment for the inner workings of Ethereum. The move from Proof-of-Work to Proof-of-Stake was felt as an upgrade by those in charge of Ethereum. The move now requires certain stake requirements, fostering trustworthy validators and eliminating dishonest ones.
The move took place on September 15, 2022. It completed the move to Proof-of-Stake, depreciating the Proof-of-Work consensus it previously used. The goal became to massively reduce the energy consumption requirements that mining entails.
FAQs
What is the daily trading volume of Ethereum (ETH)?
Ethereum’s trading volume is a significant indicator of its overall value. Currently, Ethereum has a 24-hour trading volume of $17.635 billion USD.
What is the highest and lowest price for Ethereum (ETH)?
Ethereum has enjoyed significant highs and notable lows since its launch. The all-time high price for Ethereum (ETH) was $4,891.70 in April 2021. The all-time low came on October 20, 2015, when Ethereum (ETH) was valued at $0.433 per coin.
What is the market cap of Ethereum (ETH)?
Ethereum’s current market cap – the current price multiplied by the total number of coins in circulation – is $239.7 billion. There are an estimated 120.63 million ETH in circulation with a price of $1,987 per coin.
What is the fully diluted valuation of Ethereum (ETH)?
As of March 28, 2025, the fully diluted valuation of Ethereum (ETH) is roughly $227 billion. Fully Diluted Valuation (FDV) is an estimate of the total market value of that cryptocurrency should all tokens be issued and available on the market.
What are the potential use cases for Ethereum?
The potential use cases for Ethereum are nearly endless. They can created decentralized finance, supper DAOs, provide governances, facilitate the management of digital assets, support Non-Fungible Tokens (NFTs), and even play a role in gaming.
What is the difference between Bitcoin and Ethereum?
The fundamental difference between Bitcoin and Ethereum is relatively simple. Bitcoin is considered a store of value. Ethereum, meanwhile, is functional. That is, it enables the execution of smart contracts and applications. Bitcoin has been referred to as ‘digital gold’ while Ethereum is ‘digital silver.’
How can I stake Ethereum?
Staking in Ethereum can be done a number of ways. It can be done individually, but also through a staking pool or a third-party service. Generally speaking, if you create your own node, you must stake it with at least 32 ETH, though that may change after The Merge has taken place.
Is it safe to invest in Ethereum?
As is the case with any cryptocurrency entity, there is inherent risk. Even Bitcoin, considered the king of the industry, has suffered hacks and security threats. That said, Ethereum is considered one of the safest and most stable coins, making it a reliable play as an investment.
What was The Merge?
The Merge refers to a shift in Ethereum’s consensus mechanism for validating transactions on the blockchain. Previously, it used a Proof-of-Work concept but is now shifting into a Proof-of-Stake concept. Validators are chosen based on collateral, typically in the form of cryptocurrency, staked. The more coins staked, the more trustworthy that transaction is considered to be.
What is the Beacon Chain?
The Beacon Chain is a critical part of what will be known as Ethereum 2.0. It was created with security, efficiency, and scalability in mind. The Beacon Chain is a transition from the current Proof-of-Work (PoW) standard to a Proof-of-Stake (PoS) consensus mechanism. The idea is to lower the barriers required for network participation while also reducing overall energy consumption required by the blockchain.
What are Ethereum Smart Contracts?
Ethereum smart contracts are actually written into the blockchain, self-executing agreements that include terms that have specific conditions. These smart contracts automatically execute when those actions have been met, completing eliminating the need for an intermediary or “middleman.”
What is EVM (Ethereum Virtual Machine)?
The Ethereum Virtual Machine (EVM) is part of the Ethereum network, a decentralized computation engine capable of executing smart contracts. It is one of the most vital parts of the infrastructure of Ethereum, enabling the intended execution of Ethereum’s code. The EVM operates across thousands of computers – also known as nodes – that hold together the Ethereum network.
What are Ethereum Token Standards and why are they important?
These Token Standards are essentially technical specifications and rules that are meant for both the creation and managing of tokens within the Ethereum blockchain. They are crucial because they not only enable diverse applications but ensure interoperability as well.
What are EIPs (Ethereum Improvement Proposals) and why do they matter?
These proposals are essentially formal suggestions of updates or changes to the Ethereum network as a whole. These EIPs give community members the power to contribute to the evolution and development of the network. EIPs have the power to range from minor tweaks to major overhauls that could eventually require a hard fork.
What is The Verge, The Surge, The Scourge, and the others?
The Merge is Ethereum’s switch to a Proof-of-Stake network and is scheduled to take place in September. The Surge, also known as danksharding, is a form of data sharding. It is a merged fee market where one proposer selects all data and transaction for one slot or block. The Scourge is Ethereum’s efforts to counteract the risks around centralization, especially with a growing entity like Ethereum.
