Ethereum (ETH) is the world’s second-largest cryptocurrency by market capitalization, known for its innovation and influence on the industry. Launched in 2015, it’s a decentralized platform that runs on blockchain technology. Unlike traditional cryptocurrencies focused solely on digital money, Ethereum allows developers to build applications on its platform using smart contracts. These self-executing contracts automate agreements and facilitate the creation of decentralized applications (dApps) and financial products (DeFi). This functionality has spurred a wave of innovation in areas like NFTs and more, solidifying Ethereum’s position as a major player in the cryptocurrency world.
How does Ethereum work
Ethereum operates on a foundation of several key mechanisms. First, it utilizes a blockchain, a secure digital ledger that stores and validates information. Ether, Ethereum’s currency, fuels transactions and incentivizes users who maintain the network. Unlike centralized systems, Ethereum is decentralized, with no single authority controlling it. This is achieved through a network of computers globally that validate transactions. What sets Ethereum apart is its capability for smart contracts – self-executing code stored on the blockchain. These automate agreements and transactions, removing the need for middlemen. Finally, Ethereum recently transitioned to a Proof-of-Stake system, where users stake their ETH to validate transactions, making the network more energy-efficient compared to its previous method. This combination of features allows Ethereum to function as a secure, transparent, and versatile platform for a wide range of applications.
Price History
Ethereum’s price has been on a rollercoaster ride. Unlike Bitcoin, whose 2021 surge was largely driven by external factors, Ethereum’s rise that year was fueled by technological advancements and the excitement surrounding NFTs. It reached its all-time high of nearly $4,880 in November 2021. However, it hasn’t sustained those heights and currently sits around $2,900. While that’s significantly lower than its peak, it represents a massive increase from its launch price of around $0.30 in 2014. The price does fluctuate, but Ethereum’s potential for innovation and its established role in the crypto space continue to attract interest.
