What Is Ethereum?

Ethereum is a decentralized open-source blockchain system and the pioneering platform for decentralized smart contracts. Smart contracts are computer programs that automatically execute the actions necessary to fulfill an agreement between several parties on the Internet, reducing both the need for trusted intermediates and accompanying costs. According to its site, Ethereum’s goal is to become a global platform for decentralized applications, allowing users from all over the world to write and run software that is resistant to censorship, downtime, and fraud. Ethereum’s blockchain hosts its own currency, Ether, as well as other cryptocurrencies, through the use of its ERC-20 compatibility standard. In fact, this has been the most common use for the ETH platform so far: to date, more than 280,000 ERC-20-compliant tokens have been launched. The genesis block — the first ever block on the Ethereum blockchain-- issued 72 million ETH coins. Of these 72 million, 60 million were allocated to the initial contributors to the 2014 crowd sale that funded the project, and 12 million were given to the development fund. In contrast to Bitcoin, there is no maximum supply of Ether coins whose current circulating supply stands at 113,230,344 ETH coins. It has been claimed that the ability to adjust ETH’s issuance rate via consensus allows the network to maintain the minimum issuance necessary to secure assets. The average block time is 13-15 seconds. As of August 2020, Ethereum is secured via the Ethash proof-of-work algorithm (PoW), belonging to the Keccak family of hash functions. There are plans, however, to transition the network to a proof-of-stake algorithm (PoS) tied to the major Ethereum 2.0 update. Ethereum was first described in a 2013 whitepaper by Vitalik Buterin. Buterin, along with other co-founders, secured funding for the project in an online public crowd sale in the summer of 2014 and officially launched the blockchain on July 30, 2015. Gavid Wood is the second key co-founder, as he coded the first implementation of Ethereum in the C++ programming language, proposed Ethereum’s native programming language Solidity, and was the first chief technology officer of the Ethereum Foundation. The other co-founders of Ethereum are underwriter Anthony Di Iorio; Charles Hoskinson, who established the Swiss-based Ethereum Foundation and its legal framework; Mihai Alisie; Joseph Lubin; and Amir Chetrit. As Ethereum is the second-largest cryptocurrency after Bitcoin, ETH trading pairs are listed on nearly all of the major crypto exchanges. For a full selection of markets where you can trade Ether for other cryptocurrencies, US dollars, and other fiat currencies, see below.