Ethereum is a pioneering platform, capable of running code and applications in a decentralized manner. Its importance and community are so big that it is considered a foundational pillar of the cryptocurrency and blockchain industry.

In this article, you will learn more about the fascinating world of Ethereum, its technology and the Ether ($ETH) token. Read on!

A Brief History of Ethereum

Ethereum was proposed in late 2013 by Vitalik Buterin, a then-teenage programmer from Toronto, Canada. Vitalik was engrossed by Bitcoin and the potential of blockchain technology, and believed that more complex ‘dapps’ - decentralized application (dApp) applications that operate autonomously - could be built on top of them.

After some attempts at trying to build these dapps on the Bitcoin network, in 2014 Buterin proposed a completely new blockchain that would have native capabilities for this purpose and that would be called Ethereum. His project launched on July 30, 2015 and has since gone through several relevant protocol upgrades.

Understanding Ethereum and How it Works

Ethereum, at its core, is open-source software that allows a variable number of computers around the world to agree on states and balances. The Ethereum blockchain is a public, distributed ledger that records all transactions occurring on the network. Unlike other simpler blockchains- like Bitcoin - however, the Ethereum blockchain can also store computer programs, that are executed when certain conditions are met. These are called…

Smart Contracts

One of the primary innovations in Ethereum are 'smart contracts'. They allow developers to write code that can be executed without having to trust any one single entity in a mechanistic and irreversible way. They can be useful for a wide range of purposes, including those in financial services, supply chain, property registries, and voting systems. Smart Contracts allow for other blockchain use-cases like tokenized assets or decentralized governance.

In Addition to the code and rules in it, a smart contract can also have an ETH balance.

Ether (ETH)

Ether - denoted as ETH or $ETH - is the native token of the Ethereum blockchain. It is the inherent digital currency of the system because it is used to pay for transaction fees and computational services on the network. This means that if you want to interact with Ethereum via a regular transaction or a smart contract, you will typically have to spend some Ether, which pays for…

Gas and Gas Fees

Every operation that takes part in Ethereum, from simple transactions to smart contract interactions, requires some amount of computational work that has real energetic costs somewhere. Accordingly, these operations require the initiator to pay a small fee to get them executed. Refer to our “Transaction Fees in Blockchains” article if you want to learn more about this subject!

Decentralized Applications (DApps)

DApps are applications that take advantage of smart contracts to run on decentralized networks rather than in a single computer or under a centralized system. In practice, they can look and feel very similar to regular apps, since their front-ends or user interfaces work pretty much the same, however, their decentralized nature has some useful implications, like the existence of credible neutrality. 

Imagine a lottery DApp, even if it’s run by a small or unknown company, the smart contract backend assures all participants that the results won’t be tampered with.

Ethereum today

As of today, Ethereum is the second-largest cryptocurrency, with a market cap of over 230B, and trading volumes that routinely exceed five billions dollars. Several of the most well-known Web3 platforms were born in Ethereum - for example Uniswap, Aave or MakerDAO - and many other important blockchain innovations are developed and deployed in the Ethereum ecosystem first, like the famous EIP-1559.

Conclusion

As you delve deeper into the world of blockchain, you'll find Ethereum's influence stretches far and wide. This blockchain has opened the doors for Initial Coin Offerings (ICOs), Decentralized Finance (DeFi) and Non-Fungible Tokens (NFTs), to name a few. At Maya, we are thrilled to be part of the Ethereum ecosystem, and to continue complementing and innovating in the space, towards a decentralized future, where everyone has control over their own assets. If you haven’t, make sure to join our Discord server, where we discuss Ethereum and many other things crypto! See you there!