What Is Ethereum?

Ethereum is a blockchain platform with its cryptocurrency, called Ether (ETH) or Ethereum, and its own programming language, called Solidity.

As a blockchain network, Ethereum is a decentralized public ledger for verifying and recording transactions. The network’s users can create, publish, monetize, and use applications on the platform, and use its Ether cryptocurrency as payment. Insiders call the decentralized applications on the network “apps.”

As a cryptocurrency, Ethereum is second in market value only to Bitcoin, as of May 2021.

Ethereum is an open-source blockchain-based platform used to create and share business, financial services, and entertainment applications.
Ethereum users pay fees to use apps. The fees are called “gas” because they vary depending on the amount of computational power required.
Ethereum has its own associated cryptocurrency, Ether or ETH.
Its cryptocurrency is now second only to Bitcoin in market value (volume 75%)

Ethereum’s Founders

Ethereum was launched in July 2015 by a small group of blockchain enthusiasts. They included Joe Lubin, founder of ConsenSys, a blockchain applications developer that uses the Ethereum network. Another co-founder, Vitalik Buterin, is credited with originating the Ethereum concept and now serves as the company’s CEO and its public face. Buterin is sometimes described as the world’s youngest crypto billionaire. (He was born in 1994.)

The Ether cryptocurrency was designed to be used within the Ethereum network. However, like Bitcoin, Ether is now an accepted form of payment by some merchants and service vendors. Overstock, Shopify, and CheapAir are among the online sites that accept Ether as payment.

The Ethereum Business

Ethereum’s main competitors for businesses investing in a blockchain software platform, according to Gartner Research, include Bitcoin, Ripple, IBM, IOTA, Microsoft, Blockstream, JP Morgan, and NEO.

$2,236

The market value of one ETH at the end of May 2021.

Separately, Ether is a contender in the highly volatile cryptocurrency market. As of May 2021, Ethereum was the second-largest cryptocurrency based on value, after Bitcoin. Its market cap was estimated at $500 billion compared to $1.080 trillion for Bitcoin, according to Analytics Insight.

(The other eight on Analytics Insight’s Top 10 list include Binance Coin, Dogecoin, Cardano, Tether, XRP, Internet Computer, Polkadot, and Bitcoin Cash.)

The Hard Fork

A blockchain may be invulnerable to hacker attacks, but it’s not for lack of trying. In 2016, a malicious actor stole more than $50 million worth of Ether that had been raised for a project called The DAO, a set of smart contracts created by a third party and originating from Ethereum’s software platform. The successful raid was blamed on a third-party developer.

The Ethereum community opted to reverse the theft by creating a “hard fork,” invalidating the existing blockchain and creating a second Ethereum blockchain. The original is known as Ethereum Classic.

Ethereum 2.0

As of May 2021, Ethereum was the second-largest virtual currency on the market, behind only Bitcoin.1

The number of ETHs in circulation crossed the 100 million mark back in 2018.9Unlike Bitcoin, there is no limit to the number of ETHs that can be created.

Ethereum is currently undergoing a long-awaited upgrade known as Ethereum 2.0, which is intended to allow the network to scale up while addressing congestion problems that have slowed it down in the past.10 (In 2017, a game called CryptoKitties single-handedly slowed down transactions on the platform.

IMPORTANT

Etherium has wider ambitions than Bitcoin. It wants to be a platform for all kinds of applications that can store information safely.

How Does Ethereum Make Money?

Users pay fees to use apps on the Ethereum platform. These fees are called “gas” because they vary depending on the amount of computational power used.13

The median fee for gas was above $10 per transaction in early 2021, according to the Ethereum Gas Report.13

How Long Does It Take to Mine One Ethereum?

According to a site called to be[in]cryto, mining Ethereum isn’t difficult but it takes an average of 63.7 days to mine a single one. Be prepared for a hefty electricity bill.