Ethereum is an open-source decentralized blockchain with the ability to execute smart contracts. The Ethereum blockchain uses the Ether coin to perform transactions and to reward miners. Ethereum can be used by anyone and it also allows developers to create decentralized applications (dApps) in a scalable and programmable way. Ethereum has switched from Proof-of-Work to Proof-of-Stake in 2022 which also made the energy consumption 99% less.
Since Ethereum made its introduction in 2015, the price has been on a rollercoaster reaching its peak in 2021. During that year, the number two crypto hit its all-time-high at $4000. With the Ethereum network filling up and Project Serenity on its way, the future of Ethereum (and its price) are looking bright!
But how is this price determined? Simply put, the same way that all prices of a product are determined. By supply and demand. That means that when there are more buyers than sellers, the price goes up. Same goes for the other way around, if there are more sellers than buyers, the price goes down.
The whitepaper of Ethereum was written in 2013 by Vitalik Buterin. Buterin is a 26 year old Russian programmer who was involved with the Bitcoin community since 2011. He wanted to create a new platform with less mining resources on which decentralized applications could be created. Vitalik’s idea was the start of Ethereum.
The transition to the Proof of Stake mechanism reduced the energy consumption of the Ethereum blockchain by 99.95%.
The Ethereum blockchain has been live since 2015
An average of more than 1.3 million transactions per day take place on the Ethereum blockchain
Ethereum statistics from the last 24 hours
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To introduce Ethereum the founders of the platform started a crowdfunding on the 22nd of July 2014. During this funding round, people could buy Ethereum for 31 cents (USD) a piece. The funding was a big success because the organization gathered enough to launch on July the 30th, 2015.
Two years after the launch of Ethereum the platform reached a market cap of one billion dollars! At that time the price of one Ethereum was around 10 dollars. In just two years’ time, the price had increased with 3200%! People were starting to put their faith in the project.
Unfortunately, one month after reaching a market cap of one million dollars (June 18th 2016), 55 million dollars’ worth of ether were stolen from the DAO (Decentralized Autonomous Organization). This hack happened due to a weakness in one of the smart contracts. In a smart contract, the rules of a certain agreement are set in the code. One of these rules was exploited. As you can imagine, the price dropped significantly as 55 million dollar worth of ether were siphoned away. The DAO hack resulted in a rewind of the blockchain, reversing the event so the smart contract could not be deployed. This caused a fight in the community. The blockchain should be immutable, error or not. This al resulted in a hard fork, separating it into Ethereum and Ethereum Classic.
Different factors could influence the value of Ethereum. As mentioned before, supply and demand form the basis of any product. The product becomes more popular, more people want to buy Ethereum, the value increases. Besides supply and demand, the product itself can influence the overall reception of the crypto. DeFi and ERC-20 may not have a direct effect on the price, its overall functionality speaks in Ethereum’s favor.