Ethereum Blockchain: What You Need to Know

Origins & Purpose

Ethereum Blockchain began in 2013 when Vitalik Buterin (with Charles Hoskinson, Gavin Wood, Joseph Lubin) proposed a programmable blockchain that launched in 2015 via a successful $18M ICO. Its native currency, ether (ETH), powers the system by covering transaction and smart contract costs (“gas”). Unlike Bitcoin, Ethereum focuses on decentralized apps and agreements, not just cash transfers.

How It Works

• Smart contracts are self-executing code that runs on Ethereum’s Turing-complete EVM. They automatically enforce terms once conditions are met.
• EVM (Ethereum Virtual Machine) ensures every node interprets contract logic identically, maintaining network consensus.
• Proof of Stake (PoS) replaced PoW in the 2022 Merge, reducing energy use by roughly 99%. Validators now lock 32 ETH to propose or verify blocks and earn rewards. Dishonest actions can lead to slashing (loss of funds).

Fees & Upgrades in Ethereum Blockchain

All activity on Ethereum consumes gas, paid in ETH. Major upgrades like EIP-1559 introduced fee burning for stability, while Shanghai and Dencun upgrades improved usability and scaling potential.

Tokens & Ecosystem

Ethereum supports a diverse token economy through key standards:

• ERC-20: For fungible tokens such as USDC, DAI, and most DeFi assets.
• ERC-721 and ERC-1155: For NFTs and hybrid tokens, enabling use cases like art, gaming, and collectibles.

The Ethereum ecosystem powers:

• DeFi: Platforms like Uniswap, Aave, and MakerDAO offer decentralized finance tools.
• NFTs: Projects like CryptoKitties and Bored Ape Yacht Club started the NFT boom.
• DAOs: Community-driven organizations governed by on-chain votes and rules.
• Layer-2 & Scaling: Rollups (Optimistic, ZK) reduce fees and increase throughput.

Throughput & Performance

Ethereum’s base layer handles about 15–30 transactions per second. Layer-2 networks significantly increase this capacity. It uses a Merkle Patricia Trie for secure, efficient data tracking.

Ethereum Blockchain Conclusion

Ethereum is more than digital currency—it’s a decentralized computing platform. Its move to PoS made it energy-efficient, and its rich ecosystem supports DeFi, NFTs, and DAOs. With scalability solutions evolving, Ethereum remains at the core of the decentralized Web3 future.