Ethereum Basics

2013-2014: Conception and White Paper

Ethereum was first described by Vitalik Buterin in late 2013. Buterin, a programmer and co-founder of Bitcoin Magazine, proposed Ethereum as a platform that would allow developers to build decentralized applications beyond what was possible with Bitcoin. The Ethereum white paper was published in 2014, outlining the technical details and vision for the project.

2014-2015: Development and Crowdfunding

Development of Ethereum began in early 2014, led by Buterin along with co-founders including Gavin Wood, Charles Hoskinson, and Joseph Lubin. In July and August 2014, Ethereum conducted a crowdsale, raising over $18 million by selling ETH tokens.

2015: Launch of Frontier

The first public version of Ethereum, called Frontier, was launched on July 30, 2015. This bare-bones version allowed developers to mine ETH and begin building and testing applications on the network.

2016: The DAO Hack and Ethereum Classic Split

In 2016, a decentralized autonomous organization (DAO) built on Ethereum raised $150 million in a token sale. However, a vulnerability in the DAO's code was exploited, resulting in the theft of $50 million worth of ETH. This led to a contentious hard fork of Ethereum to recover the stolen funds. The main chain became what we now know as Ethereum, while those who opposed the fork continued on the original chain, now called Ethereum Classic (ETC).

2017-2019: Growth and Development

Ethereum saw significant growth during this period, with the 2017 ICO boom bringing widespread attention to the platform. Many projects launched tokens on Ethereum using the ERC-20 standard. The network underwent several planned upgrades to improve functionality and security.

2020-2022: Ethereum 2.0 and The Merge

In December 2020, Ethereum began its transition to Ethereum 2.0 with the launch of the Beacon Chain, introducing proof-of-stake consensus. The Merge, completed in September 2022, was a major milestone that combined the original Ethereum mainnet with the Beacon Chain, officially transitioning Ethereum from proof-of-work to proof-of-stake consensus, reducing energy consumption by approximately 99.95%.

2023-Present: Scaling Solutions and Beyond

Following The Merge, Ethereum has focused on implementing scaling solutions like sharding and layer 2 networks to improve transaction throughput and reduce gas fees. The ecosystem continues to evolve with ongoing upgrades aimed at making Ethereum more scalable, secure, and sustainable.

Smart Contracts

Smart contracts are self-executing contracts with the terms directly written into code. They automatically enforce and execute agreements when predetermined conditions are met, without the need for intermediaries. Smart contracts enable a wide range of applications, from financial services to supply chain management.

Gas and Gas Fees

Gas is the unit that measures the computational effort required to execute operations on the Ethereum network. Every transaction and smart contract execution requires a certain amount of gas, and users must pay for this gas using ETH. Gas fees help prevent spam and ensure the efficient use of network resources.

Decentralized Applications (dApps)

dApps are applications that run on a decentralized network rather than being hosted on centralized servers. They use smart contracts for their backend logic and typically have user interfaces built with web technologies. dApps can range from financial services and games to social networks and marketplaces.

Tokens and Token Standards

Ethereum enables the creation of various types of tokens through smart contracts. The most common token standards include:

• ERC-20: The standard for fungible tokens, used for cryptocurrencies and utility tokens
• ERC-721: The standard for non-fungible tokens (NFTs), used for unique digital assets
• ERC-1155: A multi-token standard that combines features of both ERC-20 and ERC-721

Wallets

Ethereum wallets are applications that allow users to interact with the Ethereum blockchain. They store private keys, manage ETH and other tokens, and enable users to send transactions and interact with dApps. Wallets can be software-based (web, desktop, or mobile) or hardware devices for enhanced security.