Ethereum

Ethereum is a decentralised blockchain platform that provides a framework for creating and executing smart contracts and decentralised applications (dapps). Conceived by Vitalik Buterin in 2013 and launched in 2015, Ethereum was developed to extend the functionality of blockchain technology beyond simple value transfers by introducing programmability.

At the heart of Ethereum is the Ethereum Virtual Machine (EVM), an execution environment that processes smart contracts, ensuring that code runs exactly as written without central oversight. This design enables developers to build applications that operate in a trustless and transparent manner, serving use cases in areas such as finance, digital identity, and supply chain management.

Ether (ETH), the native cryptocurrency of the platform, is used to pay for network operations like gas fees and to support the incentives that maintain the network's security. By facilitating these essential functions, Ether underpins both routine transactions and the broader engagement of participants within the ecosystem. ETH also serves as a key trading asset on cryptocurrency exchanges, enabling users to trade or invest in various digital assets and participate actively in decentralized finance (DeFi) markets.

Ethereum’s open-source nature and its active global development community drive ongoing protocol improvements. This continuous evolution supports a wide range of applications and positions Ethereum as a key platform in the landscape of decentralised technology.

Ethereum operates by recording a continuous series of transactions in blocks that update the network's overall state. Each block includes transactions that either transfer Ether between accounts or execute smart contracts, with the Ethereum Virtual Machine (EVM) ensuring that every instruction is carried out precisely as written.

The network utilises a conventional account model that distinguishes between externally owned accounts, which are controlled by private keys, and contract accounts, which are governed by their underlying code. This structure allows for straightforward financial transactions as well as more complex operations embedded in smart contracts.

A core component of Ethereum’s functionality is its consensus mechanism. Initially, the network relied on Proof of Work, where miners solved computational puzzles to validate transactions. With the transition known as "The Merge", Ethereum now uses a Proof of Stake system. In this model, validators are selected based on the amount of Ether they commit (stake) as collateral – a minimum of 32 ETH is required – to propose and confirm new blocks. Consensus is achieved when the majority of validators agree on the state of the blockchain, thus securing the network and preventing issues like double-spending.

Transactions on the network incur gas fees, which serve to prioritise operations and allocate network resources efficiently. These fees compensate validators for processing transactions and help deter abuse by ensuring that every operation carries a measurable cost.

Ethereum’s protocol is continuously refined through community-led upgrades. Recent improvements, such as those introduced during the Shanghai upgrade, have enabled features like staked ETH withdrawals and optimised gas fee calculations. These ongoing enhancements support better resource management and scalability, ensuring that the network remains robust and adaptable to new applications.