What is Ethereum?

Ethereum is an open-source, decentralized blockchain platform proposed in 2013 by Vitalik Buterin and launched in July 2015, built with seven co-founders including Gavin Wood, who created Solidity and the EVM technical specification, and Joseph Lubin, who founded ConsenSys. It is designed for decentralized applications and smart contracts that run on the Ethereum Virtual Machine, which executes self-executing programs written in Solidity when predefined conditions are met.

Ethereum uses Proof of Stake, implemented in 2022, where thousands of independent validator nodes process transactions and execute smart contracts. Validators stake ETH as collateral to propose and validate blocks, earning rewards for honest behavior and facing penalties for malicious activity. ETH is used to pay transaction fees (gas), to stake for network security and rewards, and as collateral and settlement asset in applications such as DeFi, and for purchasing NFTs and digital assets. An EIP-1559 mechanism introduced a dynamic base fee that is burned, creating deflationary pressure when burning exceeds issued rewards.