Date Launched: July 30, 2014
Amount Raised from ICO: $18.4M
Mineable: PoW, PoS
Founders: Vitalik Buterin, Anthony Di Iorio, Gavin Wood, Joseph Lubin, Jeffrey Wilcke, Mihai Alisie, Amir Chetrit, Charles Hoskinson
Fork: Ethereum Classic Type: Platform
Ethereum is an open software platform based on blockchain technology. Users of the Ethereum platform can build and deploy decentralized applications without building their own blockchain. Through the use of smart contracts, developers can launch their own tokens on Ethereum.
Ethereum uses a decentralized public blockchain similar to Bitcoin. While Ethereum started off with a Proof-of-Work mining algorithm, it is slowly implementing Proof-of-Stake. Vitalik Buterin, along with the rest of the founding team, started the project in 2014. Vitalik is considered the face of Ethereum and often advises projects operating on top of the Ethereum network.
On the Ethereum network, users have the opportunity to leverage smart contracts, which are open-source tools embedded within the Ethereum blockchain. These smart contracts are governed by predefined rules that are entirely transparent and accessible to the public.
Enthusiastic proponents of Ethereum firmly believe in the transformative potential of smart contracts, particularly in challenging the role of intermediaries in traditional industries. These versatile smart contracts can effectively supplant middlemen by autonomously facilitating various tasks. For instance, they can facilitate the seamless matching of buyers and sellers, ensure the secure and automated processing of insurance payments, and even execute salary payments for employees without the need for third-party involvement. Such capabilities underscore the significant impact that smart contracts can have in streamlining processes and promoting efficiency across different sectors.
Numerous blockchain startups recognized the potential of Initial Coin Offerings (ICOs) as a powerful fundraising method. By creating tokens and selling them for Ether, startups could secure the necessary funds to fuel their projects. Each token would represent a specific function or utility within the startup’s ecosystem. For instance, the Golem token facilitated payments for computing power, while the Filecoin token was used for decentralized storage.
As these projects matured and demand for their tokens surged, the tokens gained value, becoming more valuable assets. Early investors reaped the rewards of their initial investment by selling their tokens at a profit. One notable example is Ethereum itself, which conducted an ICO, successfully raising over $18 million by selling each Ether token at the initial price of $0.30. This successful ICO marked a crucial milestone in Ethereum’s journey towards becoming a leading blockchain platform.
Ether serves as the primary currency for conducting operations within the Ethereum network. Every transaction on Ethereum incurs a fee, which is measured in Gas. The Gas required for a transaction determines the amount of Ether that must be used as the transaction fee. The cost of Gas is subject to fluctuations, influenced by the level of demand and the volume of transactions taking place on the network. As a result, the price of Gas can vary over time based on the dynamics of the Ethereum ecosystem.