Ethereum is a leading open source blockchain having 2nd place in terms of market cap after Bitcoin. The platform enables smart contracts based on a decentralized and open source blockchain which uses ETH ( native token ) to build on the chain. More than 90% of the tokens in the crypto ecosystem use Ethereum as the core platform to operate.

Vitalik Buterin originally introduced Ethereum in a whitepaper published in 2013. In the summer of 2014, Buterin and his co-founders raised funds for the project through an online public crowd sale. The project raised $18.3 million in Bitcoin, and the price of Ethereum in the Initial Coin Offering (ICO) was approximately $0.311, with more than 60 million Ether sold.

On July 30, 2015, the Ethereum Foundation formally debuted the blockchain as a prototype nicknamed “Frontier.” Since then, many network upgrades have occurred: “Constantinople” on February 28, 2019, “Istanbul” on December 8, 2019, “Muir Glacier” on January 2, 2020, “Berlin” on April 14, 2021, and most recently, the “London” hard fork on August 5, 2021. The upgrades makes the chain more robust and scalable handling more transactions, reducing the block confirmation and transaction fees.

In spite of several upgrades, Etheruem chain has not completely migrated to Proof of Stake and is currently operating as a hybrid which uses proof of work and stake both together. Due to its inability to migrate completely, Ethereum continues to face heavy gas fees which makes it inefficient for microtransactions. High gas fee also makes use of other DeFi platforms like UniSwap, etc expensive. Even minting ERC-721 tokens which are used to create NFTs have become considerably expensive.

Historical Price Movement (in INR)

Bitcoin is the first generation of blockchain, but Ethereum introduced a second generation blockchain which enabled smart contracts. Smart contracts are blockchain-based programs that automatically carry out the steps required to complete a contract between one or more parties.

Ethereum is protected using the Ethash proof-of-work algorithm, which belongs to the Keccak family of hash functions, as of August 2020. It is now migrating to proof of stake with beacon chain already operational.

The ERC-20 compatibility standard allows Ethereum’s blockchain to hold additional cryptocurrencies, known as “tokens,” in addition to smart contracts. To date, more than 280,000 ERC-20-compliant tokens have been issued on the ETH platform, making it the most popular usage of the network. USDT, LINK, and MATIC for example, are among the top-100 cryptocurrencies by market capitalization.

BREAKDOWN OF HOW NATIVE TOKENS IS USED IN THE ECOSYSTEM:

The Ethereum chain uses several types of ERC (Ethereum Request for Comment)
ERC 20: Most widely used for generating tokens on top of the blockchain.
ERC 721: Used for minting Non Fungible Tokens
ERC 777: Is a fungible token protocol which is improved standard for ERC 20
ERC 1155: Uses multiple token standards creating a hybrid for ERC 20, 721 and 777. Programming this is more complex and is less popular.

ETH (The network’s crypto currency) is burnt to utilize the Ethereum network when you transmit ETH or use an Ethereum application. This fee is a way for a miner to get rewarded for processing and validating the network.

Over the course of eight investment rounds, the Ethereum Foundation has raised a total of $18.4 million. Their most recent fundraising came from a Secondary Market round on May 1, 2017. The Ethereum Foundation is backed by a group of 13 investors. The most recent investors are Alexis Berthoud and Julian Sarokin.

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