Ethereum
Ethereum is a decentralized blockchain with smart contract functionality. Ether (Abbreviation: ETH;[a]) is the native cryptocurrency of the platform. Among cryptocurrencies, ether is second only to bitcoin in market capitalization.[2][3] It is open-source software.
Original author(s)
Ethereum was conceived in 2013 by programmer Vitalik Buterin.[4] Additional founders of Ethereum included Gavin Wood, Charles Hoskinson, Anthony Di Iorio, and Joseph Lubin.[5] In 2014, development work began and was crowdfunded, and the network went live on 30 July 2015.[6] Ethereum allows anyone to deploy permanent and immutable decentralized applications onto it, with which users can interact.[7] Decentralized finance (DeFi) applications provide financial instruments that do not directly rely on financial intermediaries like brokerages, exchanges, or banks. This facilitates borrowing against cryptocurrency holdings or lending them out for interest.[8][9] Ethereum also allows users to create and exchange non-fungible tokens (NFTs), which are tokens that can be tied to unique digital assets, such as images. 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.
On 15 September 2022, Ethereum transitioned its consensus mechanism from proof-of-work (PoW) to proof-of-stake (PoS) in an upgrade process known as "the Merge". This has cut Ethereum's energy usage by 99%.[10]
Design
Ether
Ether (ETH) is the cryptocurrency generated in accordance with the Ethereum protocol as a reward to validators in a proof-of-stake system for adding blocks to the blockchain. Ether is represented in the state as an unsigned integer associated with each account, this being the account's ETH balance denominated in wei (1018 wei = 1 ether). At the end of each epoch, new ETH is generated by the addition of protocol-specified amounts to the balances of all validators for that epoch, with the block proposers receiving the largest portion. Additionally, ether is the only currency accepted by the protocol as payment for the transaction fee. The transaction fee is composed of two parts: the base fee and the tip. The base fee is "burned" (deleted from existence) and the tip goes to the block proposer. The validator reward together with the tips provide the incentive to validators to keep the blockchain growing (i.e. to keep processing new transactions). Therefore, ETH is fundamental to the operation of the network. Ether may be "sent" from one account to another via a transaction, which simply entails subtracting the amount to be sent from the sender's balance and adding the same amount to the recipient's balance.[55]
Ether is often erroneously referred to as "Ethereum".[56]
The uppercase Greek letter Xi, Ξ, is sometimes used as a currency symbol for ether.
Accounts
There are two types of accounts on Ethereum: user accounts (also known as externally-owned accounts), and contract accounts. Both types have an ETH balance, may transfer ETH to any account, may execute the code of another contract, or create a new contract, and are identified on the blockchain and in the state by an account address.[57]
Contracts are the only type of account that has associated bytecode and storage (to store contract specific state). The code of a contract is evaluated when a transaction is sent to it. The code of the contract may read user specified data from the transaction, and may have a return value. In addition to control flow statements, the bytecode may include instructions to send ETH, read from and write to the contract's storage, create temporary storage (memory) that vanishes at the end of code evaluation, perform arithmetic and hashing operations, send transactions to other contracts (thus executing their code), create new contracts, and query information about the current transaction or the blockchain.[58]
