Ethereum

Ethereum
Logo
Original author(s)	Vitalik Buterin Gavin Wood
Initial release	30 July 2015; 10 years ago
Stable release	1.12.2 / 13 August 2023; 2 years ago
Development status	Active
Software used	EVM 1 Bytecode
Written in	Go, Rust, C#, C++, Java, Python, Nim, TypeScript
Operating system	Cross-Platform
Platform	x86-64, ARM
Available in	Multilingual, primarily English
Type	Distributed computing
License	Open-Source License
Active hosts	~8,600 nodes (6 June 2023)
Website	ethereum.org

Ethereum (abbreviation: ETH; symbol: Ξ) is a decentralized, open-source blockchain platform that enables smart contracts and decentralized applications (dapps).¹ Its native cryptocurrency is Ether (ETH), a digital currency and utility token used for transactions, smart contracts, and applications.²

Among cryptocurrencies, ether is second only to Bitcoin in market capitalization; it has been outranked only by Bitcoin since its launch.³ Smart contracts are self-executing agreements with code that automatically enforces rules without downtime, censorship, fraud, or third-party interference.

Ethereum was conceived in 2013 by programmer Vitalik Buterin. In 2014, he presented the vision at the North American Bitcoin Conference, and an ETH ICO raised $18 million.⁴ He, along with other cryptocurrency entrepreneurs, developed the platform to enable versatile smart contracts and decentralized applications, officially launching Ethereum in 2015.⁵

Other co-founders include Mihai Alisie, Charles Hoskinson, Anthony Di Iorio, Amir Chetrit, Gavin Wood, Joseph Lubin, and Jeffrey Wilcke.⁶

Ethereum allows anyone to deploy decentralized applications, which anyone can then use. Decentralized finance (DeFi) on Ethereum offers open, global financial services without intermediaries, enabling lending, borrowing, token trading, and stablecoin use. Ethereum supports smart contracts, fungible tokens (ERC-20), and non-fungible tokens (NFTs), allowing programmable, automated financial interactions according to immutable code.

On September 15, 2022, Ethereum completed "The Merge," transitioning from an energy-intensive proof-of-work to a proof-of-stake consensus mechanism. This upgrade reduces the network's energy consumption by ~99.95%, replacing miners with validators who stake ETH to secure the blockchain.⁸

¹ Consensys, Ethereum: The World Computer, Achieved

²GeeksforGeeks, “Different Units Used in Ethereum” Achieved, Retrieved July 2025

³Investopedia, Ethereum Explained: Blockchain, Smart Contacts and Its Future, Achieved, Retrieved August 2025.enabling programmable, automated financial interactions defined by

⁴ World.org, “The History of Ethereum: Its Origin and Upgrades” Achieved, Retrieved April 2023

⁵ Public Holdings Inc, “What Is Ethereum? An Explainer” Achieved

⁶ CNBC TV “A look at the founders of Ethereum and where they are now” Achieved, Retrieved August 2022

⁷ Ethereum.Org, “Decentralized finance (DeFi)” Achieved  https://ethereum.org/defi/

History

Ethereum was initially described in a white paper by Vitalik Buterin in late 2013. He believed Bitcoin's functionality was too limited. The whitepaper outlined a vision for a platform supporting smart contracts and decentralized applications as a universal computing platform.⁹

Gavin Wood joined shortly after as a co-founder. The project was realized after a 2014 crowdfunding round, and the Ethereum blockchain officially launched with its first block mined on July 30, 2015.¹⁰

In July 2015, Ethereum launched under the codename “Frontier” using a proof-of-work consensus, with miners earning five ETH per block through GPU mining. In 2016, the DAO hack resulted in a $50 million loss, leading to a contentious fork that created the modern versions of Ethereum and Ethereum Classic.

From 2017 to 2021, major upgrades such as Byzantium, Constantinople, and the Beacon Chain improved scalability and prepared Ethereum for proof-of-stake. In 2022, Ethereum completed the Merge, reducing energy use by 99.95% and shifting to a new issuance model while laying groundwork for future phases: the Surge, Verge, Purge, and Splurge.¹¹

Ethereum has a huge group of founders. Vitalik Buterin created the project with seven co-founders who contributed to early development, legal structure, programming, and fundraising before most left between 2014 and 2016.

Currently, the founders lead separate ventures: Alisie runs Akasha, Hoskinson leads Cardano, Wood founded Polkadot, Lubin heads Consensys, Wilcke runs Grid Games, while Di Iorio and Chetrit have stepped away from crypto.¹²

⁸TechCrunch, “Ethereum switches to proof-of-stake consensus after completing The Merge” Achieved, Retrieved September 2022.

⁹Ethereum. Org. “Whitepaper, Ethereum: A Next-Generation Smart Contract and Decentralized Application Platform” Achieved, Retrieved 2014

¹⁰Hashkey Exchange, “A Brief History of Ethereum” Archived, Retrieved August 2025

¹¹The World, “The History of Ethereum: Its Origin and Upgrades”, Achieved, Retrieved April 2023.

Background

Vitalik Buterin’s path to founding Ethereum began with an early talent for mathematics and programming after moving from Russia to Canada as a child.¹³  His interest in decentralization grew from experiences in online gaming and his discovery of Bitcoin in 2011, where he began writing articles for 5 BTC each.

Co-founding Bitcoin Magazine deepened his involvement in the crypto community, ultimately leading him to draft the Ethereum whitepaper in 2013 after Bitcoin rejected his proposal for a more advanced scripting system. His vision outlined a programmable blockchain for decentralized applications, forming the foundation for what would soon become Ethereum.

2013–2014: Creation and Vision

Buterin's introduction to cryptocurrency came in 2011 when he learned about Bitcoin. Fascinated by its potential, he became a writer for a Bitcoin magazine, where he shared his insights and ideas about the future of decentralized currencies. This experience not only deepened his understanding of blockchain technology but also laid the groundwork for his future endeavors.¹⁴

Bitcoin established the foundation for decentralized blockchain technology. But its functionality is limited to peer-to-peer electronic cash transfers. Seeing this limitation, Buterin wanted to expand blockchain’s functionality to programmable apps.

At first, Buterin wanted to enhance Bitcoin by adding a more advanced scripting language to support smart contracts. The Bitcoin community, however, rejected this idea, seeing it as too risky or complex.

Afterward, Buterin decided to build an entirely new blockchain to create a “world computer.” In late 2013, he published the Ethereum white paper, describing a platform capable of running decentralized applications and smart contracts efficiently.¹⁵

Ethereum was officially announced in January 2014 at the North American Bitcoin Conference. By the end of 2014, crowdfunding raised over $18 million, and developers, including Gavin Wood, joined, marking Ethereum’s official launch.¹⁶

¹²CNBC TV18, “A look at the founders of Ethereum and where they are now” Achieved, Retrieved August 2022.  

¹³Fintech Magazine, “Founding Ethereum: Vitalik Buterin, the crypto pioneer” Achieved, Retrieved October 2023.

¹⁴CoinCrowd, “Vitalik Buterin: The Shy Genius Who Dreamed Up Ethereum at 19”, Achieved

2015–2016: Frontier and Early Growth

The Ethereum blockchain launched publicly in July 2015, following the Olympic, the final testnet for developers to explore its features. Vitalik offered a 25,000 ETH reward for stress-testing, ensuring the network was stable, secure, and ready for its official mainnet release.¹⁷

On July 30, 2015, Ethereum 1.0, called Frontier, launched, enabling users to mine ether and run smart contracts. Frontier Thawing, a minor fork, followed, limiting gas to 5,000 per transaction to keep fees manageable and support miners and developers testing decentralized applications.

A few months before the Frontier launch, Vinay Gupta published a note about Ethereum’s launch process. Amidst paragraphs of excitement are warnings to potential users. Frontier, he claimed, was Ethereum “in its barest form”, and developers should take caution. Just days before the Frontier launch.¹⁸

The first version of Ethereum used a proof-of-work (PoW) consensus mechanism, similar to Bitcoin.¹⁹ In this system, computers solve complex algorithmic problems to validate and post new transactions on the blockchain. The first computer to solve a puzzle receives a reward in ETH.

The Ethereum Merge on September 15, 2022 (block 15,537,394) transitioned Ethereum from PoW to PoS. ETH issuance fell 90% (14,600→1,600/day), energy consumption dropped 99%, and ~441,000 validators now secure the network, with 41,000 attending the livestream.20

Ethereum mining did not require expensive ASIC hardware. Instead, miners could use graphics processing units (GPUs), making mining more accessible and helping support a decentralized network during Ethereum’s early years.²¹

¹⁵Global Allinace for ITC and  Development, “Ethereum: A Next-Generation Smart Contract and Decentralized Application Platform (Ethereum Whitepaper)’’, Achieved, Retrieved March 2024

¹⁶WisdomTree Funds, “Ethereum’s History: From Zero to 2.0” Achieved, Retrieved July 2021

¹⁷Consensys, “A Short History of Ethereum” Achieved, Retrieved May 2019

¹⁸Ethereum Foundation Blog, “The Ethereum Launch Process” Achieved, Retrieved March 2015

2016: The DAO Hack Explained

Just one year after Ethereum’s launch, the community faced a major controversy known as the DAO hack. A DAO, or decentralized autonomous organization, is a community-driven protocol governed by smart contracts.

The DAO involved in the hack raised $150 million in ETH, giving stakeholders voting power over its treasury. Hackers exploited bugs in the code and stole roughly $50 million in ETH.

The Ethereum community split into two camps: one favored creating a new chain to reimburse investors, while the other insisted on leaving the blockchain unchanged, following “code is law.” Most developers chose to fork the chain, creating today’s mainstream Ethereum, while the original Ethereum Classic remains operational.²³

By October 2017, Ethereum’s Homestead phase improved security after the DAO hack, implemented a hard fork, and introduced Tangerine Whistle and Spurious Dragon upgrades to fix vulnerabilities and prevent DoS attacks.²⁴

¹⁹Science Direct, “Ethereum” Achieved, Retrieved

²⁰Pontem Blo, “Ethereum Merge and its results: a deep dive + what’s next” Achieved, Retrieved October 2022

²¹Calibraint, “Ethereum Mining in 2025: Is it gone? What’s in place? And what’s next?” Achieved, Retrieved January 2025

²²Vice Media, “A $50M Hack Tests the Values of Communities Run by Code” Achieved, Retrieved July 2016

²³World.Org, “The History of Ethereum: Its Origin and Upgrades” Achieved, Retrieved, April 2023

2017–2021: Major Upgrades and Ethereum Evolution

Following the DAO hack, Ethereum implemented a series of governance and network upgrades. In 2017, Byzantium Fork reduced block rewards from five ETH to three ETH and enabled layer-2 solutions such as Polygon, enhancing scalability and adoption among developers.²⁵

Non-fungible tokens (NFTs) gained popularity with CryptoKitties, causing network congestion and highlighting Ethereum’s scalability limitations. The 2019 Istanbul and Constantinople upgrades optimized gas fees and prepared the network for a transition to proof-of-stake. In 2020, the Beacon Chain was launched, allowing users to stake 32 ETH.²⁶

In 2017, the ERC-20 token standard drove a surge in Initial Coin Offerings (ICOs), raising billions of dollars. The price of ETH increased from under $10 to over $730 by the end of the year. Institutional adoption began with the formation of the Enterprise Ethereum Alliance (EEA), while CryptoKitties congestion emphasized the need for further network upgrades.

Following the 2017 boom, the 2018 Great Crypto Winter saw ETH prices decline from nearly $1,400 to below $100, primarily due to ICO liquidations and regulatory scrutiny. Despite persistent network congestion, developers focused on foundational work, enabling the growth of decentralized finance (DeFi).

In 2019, foundational DeFi protocols such as MakerDAO and Compound were developed. By early 2019, over 2 million ETH was locked in MakerDAO, stablecoins exceeded a $5 billion market capitalization, and Ethereum’s Total Value Locked (TVL) increased from $290 million to $680 million.

DeFi Summer in 2020 experienced rapid growth, with liquidity mining rewarding COMP tokens. TVL increased from $600 million to over $16 billion, and ETH prices rose from $130 to $750. The Beacon Chain operated as a proof-of-stake layer alongside the proof-of-work mainnet, preparing Ethereum for a complete PoS transition.

In 2021, NFTs captured global attention through Beeple’s $69.3 million sale and the Bored Ape Yacht Club collection. The London hard fork, including EIP-1559, introduced a fee-burning mechanism, making ETH potentially deflationary. ETH reached an all-time high of $4,891, reflecting both cultural and economic adoption.²⁷

Below is the rewritten content in Wikipedia-style format, following the exact structure and tone of your previous section, and using only the information you provided—no added or removed facts.

²⁴Wisdom Tree, “Ethereum’s History: From Zero to 2.0” Achieved, Retrieved July 2021.

²⁵Investopedia, “Byzantium Fork: What It Means, How It Works, and Goals” Achieved, Retrieved January 2024

²⁶Gate Learn, “Beacon Chain” Achieved

2022–2024: Ethereum’s Scaling and Institutional Adoption

On 15 September 2022, Ethereum completed the Merge, switching from proof-of-work (PoW) to proof-of-stake (PoS). Energy use dropped 99.95%, and daily ETH issuance fell, enabling future scalability upgrades.²⁸ Ethereum entered traditional finance as the CME launched ETH futures, increasing institutional access and strengthening its global market role.

Focus shifted to Layer 2 networks like Arbitrum and Optimism, reducing fees and surpassing $15 billion in total value locked. The Shanghai upgrade enabled staked ETH withdrawals, offset by new deposits, with ETH reaching $2,100.²⁹

On 23 May 2024, the SEC approved spot ETH ETFs, with trading starting in July. BlackRock drove $5.43 billion in inflows, raising total ETF-held ETH above $21 billion. The Dencun upgrade introduced EIP-4844 (proto-danksharding), lowering Layer 2 fees 10–100×

and expanding scalability, solidifying Ethereum as an institution-ready, global blockchain platform.

²⁷Aurpay, “Ten Years of Ethereum: The Story You Haven’t Heard (2025)” Achieved, Retrieved, August 2025

²⁸Investopedia, “Ethereum Finally Completes The Merge” Achieved, Retrieved  September 2022.  

²⁹Binance Square, “Ethereum successfully completed the Shanghai upgrade, setting an important milestone for the encryption industry” Achieved, Retrieved April 2023

³⁰Investopedia, “SEC Approves Spot Ether ETFs”, Achieved, Retrieved July 2024

2025 - The Decade of Utility: A Global Settlement Layer

In 2025, Ethereum evolved into a utility-focused global settlement layer. The “Pectra” upgrade improved both user and validator experiences, introducing features designed to enhance accessibility and network efficiency.

EIP-7702 implemented account abstraction, allowing wallets to temporarily function as smart contracts, pay transaction fees with alternative tokens, and enable social recovery, supporting broader adoption by non-technical users.₃₁

EIP-7251 increased the maximum effective stake per validator from 32 ETH to 2,048 ETH, facilitating large-scale staking operations. Regulatory clarity was established by the GENIUS Act, providing a framework for dollar-backed stablecoins.³²

By 2025, Ethereum had become a productive corporate treasury asset, generating yield via staking. The network transitioned from a speculative “world computer” to a legally recognized, institutional-ready global settlement platform.³³

Post-Merge updates

Pectra

Prague-Electra (“Pectra”), Ethereum’s 16th network upgrade, launched on May 7, 2025, following Dencun (March 2024). It includes 11 EIPs, introducing smart accounts, increasing staking to 2,048 ETH, enabling execution-layer validator exits, and doubling Layer 2 throughput for greater efficiency and lower costs.

Dencun

The Ethereum Dencun (Deneb-Cancun) upgrade, scheduled for March 13, 2024, enhances scalability via EIP-4844 (Proto-Danksharding), introducing blob-carrying transactions for Layer 2 rollups, reducing fees, improving data availability, and laying the foundation for future Danksharding.³⁴

³¹QuillAudits, “EIP-7702 : A New Era in Account Abstraction” Achieved, Retrieved August 2025

³²Aurpay, “Ten Years of Ethereum: The Story You Haven’t Heard (2025)” Achieved, Retrieved, August 2025

³³Consensys, “What is Pectra” Achieved

Design

Ethereum is a decentralized, open-ended platform enabling smart contracts and applications, with ether as its essential transaction token.³⁵  Ether is the primary cryptocurrency of the Ethereum network.  

Additionally, in Ethereum, gas is the measure of computational effort required to process operations, like transactions or smart contract execution, on the network. Apart from the Ether, Mwei, Gwei (1 Gwei = 10⁹ Wei), and Wei are Ether denominations used for pricing gas and transactions.

Ether

Ether (ETH) is the native cryptocurrency of Ethereum, a decentralized blockchain platform enabling smart contracts, decentralized applications, and finance, functioning as the network’s essential medium of value.³⁶

Like Bitcoin, Ether operates in a peer-to-peer financial system without government oversight, enabling users to conduct transactions and interact with Ethereum’s software autonomously.

All ether transactions are recorded on a public blockchain, verified by miners who secure blocks cryptographically, with mining difficulty adjusted to maintain approximately one block every fourteen seconds.³⁷

Network nodes propagate transactions across the blockchain, maintain copies of the ledger, manage unvalidated transactions in their mempools, and ensure Ethereum’s integrity through consensus mechanisms and cryptographic validation.

³⁴Coin Market Cap, “What Is the Ethereum Dencun Upgrade? EIP-4844 Set To Lower Layer-2 Fees” Achieved

³⁵Fidelity Digital Assets, “Coin Report: Overview of Ethereum and Its Potential Use Cases” Achieved, Retrieved July 2015

³⁶Investopedia, “Ethereum Explained: Blockchain, Smart Contracts and Its Future” Achieved, Retrieved August 2025

³⁷IG, “What is Ethereum and how does it work?” Achieved

Units, Symbol, and Divisibility

Ether is Ethereum’s primary cryptocurrency, with Wei as its smallest unit; one Ether equals 1,000,000,000,000,000,000 Wei (10¹⁸), making one Wei one quintillionth of an Ether.

Sub-units of Ether
Unit	wei value	wei	ether value
wei	1 wei	1	10-18 ETH
kwei	103 wei	1,000	10-15 ETH
mwei	106 wei	1,000,000	10-12 ETH
gwei	109 wei	1,000,000,000	10-9 ETH
microether	1012 wei	1,000,000,000,000	10-6 ETH
milliether	1015 wei	1,000,000,000,000,000	10-3 ETH
ether	1018 wei	1,000,000,000,000,000,000	1 ETH

Blockchain and Beyond

Ethereum operates on a distributed blockchain, storing immutable blocks linked sequentially, with copies shared across the network. Validators create new blocks, earning ether as rewards, while consensus and execution layers finalize transactions using Proof-of-Stake with Gasper protocols.

Validators stake 32 ETH or join pools, attest blocks, and are rewarded or penalized via the Casper-FFG and LMD-Ghost mechanisms. Ethereum wallets manage private keys, providing secure access to ether and transactions, while the cryptocurrency itself remains on the blockchain.³⁹

Accounts

Ethereum accounts function as digital identities, including Externally Owned Accounts (EOAs) and Smart Contract Accounts (SCAs). EOAs use cryptographic key pairs, authorize state changes, and pay transaction fees, but cannot store contract code. SCAs lack private keys and store EVM code and data, enabling advanced features like multi-signature transactions, automated payments, conditional operations, and contract deployment.⁴⁰

³⁸Investopedia, “Wei: Definition in Cryptocurrency, How It Works, and History” Achieved, Retrieved June 2024

³⁹Investopedia, “Ethereum Explained: Blockchain, Smart Contracts and Its Future” Achieved, Retrieved August 2025

⁴⁰Quicknode, “What are Ethereum Accounts” Achieved, Retrieved, November 2025

Addresses

An Ethereum address identifies an Externally Owned Account (EOA) or contract capable of sending or receiving transactions, derived from the last 160 bits of a Keccak hash of an ECDSA public key.

Externally Owned Addresses (EOAs) are wallet addresses controlled by private keys, enabling access to funds and transaction authorization. Contract addresses host EVM code that executes functions upon transaction interaction, and both types follow a 42-character hexadecimal format.

For example, an EOA could be 0x71C7656EC7ab88b098defB751B7401B5f6d8976F

Ethereum Virtual Machine (EVM)

Ethereum Virtual Machine (EVM) is the part of Ethereum that runs smart contracts and decentralized applications (dApps). Developers write contracts in languages like Solidity, which are converted into bytecode for the EVM to execute.

When users interact with a contract through transactions, each Ethereum node runs the EVM to process it. The EVM uses a stack-based system, temporary memory, and permanent on-chain storage. Transactions consume “gas,” a fee paid for computation, and blocks containing transactions are validated by miners or validators. Once confirmed, all changes are permanent and publicly recorded on the blockchain.⁴²

⁴¹Investopedia, “Ethereum Explained: Blockchain, Smart Contracts and Its Future” Achieved, Retrieved August 2025

⁴²Quicknode, “What are Ethereum Accounts” Achieved, Retrieved, November 2025

⁴³Etherscan Information Center, “What is an Ethereum Address"Archived, Retrieved June 2023

⁴⁴Geeks for Geeks, “What is an Ethereum Virtual Machine and How it Works?” Achieved, Retrieved July 2025

https://www.geeksforgeeks.org/ethical-hacking/what-is-ethereum-virtual-machine-and-how-it-works/

Gas

Gas on Ethereum is a fee paid in gwei to process transactions and execute smart contracts, compensating validators for computational work.⁴³ Since September 2022, part of gas rewards has gone to ETH stakers under proof-of-stake, incentivizing network security and participation.

Initially, Ethereum gas fees were based on gas limit and price per unit. Since August 2021, fees have used a base fee, gas units, and a priority tip to expedite transactions.

Gas fees are calculated as:

Gas Used × (Base Fee + Priority Fee)

For example,

Sending 2 ETH using two gas units, with 11 gwei base fee and three gwei tip:

2 × (11 + 3) = 28 gwei = 0.000000028 ETH.

Total sent = 2.000000028 ETH.⁴⁴

Application

The Ethereum Virtual Machine (EVM) is Turing-complete, enabling diverse applications.  It powers diverse applications, including DeFi, NFTs, gaming, DAOs, tokenized assets, crowdfunding, payments, supply chain tracking, and decentralized data storage, enabling transparency, security, automation, and global decentralized interactions.⁴⁵

⁴⁵Investopedia, “Wei: Definition in Cryptocurrency, How It Works, and History” Achieved, Retrieved June 2024

⁴⁶Investopedia, “Understanding Ethereum Gas Fees: Their Role and Calculation” Achieved, Retrieved August 2025

⁴⁷Coin360, “Ethereum Use Cases in 2025: The 10 Biggest Real-World Applications Right Now” Achieved, Retrieved October 2025

Contract Source Code

Smart contracts are digital programs on the blockchain that execute automatically when preset conditions are met.⁴⁶ They enable secure, trustless transactions without intermediaries and are primarily written in Solidity or Vyper, running on the Ethereum Virtual Machine (EVM).

The EVM provides a sandboxed, Turing-complete environment, tracking execution costs in gas payable in Ether (ETH).⁴⁷ Smart contracts are immutable and globally distributable, ensuring tamper-resistance and validation by all network nodes. Deployment involves compiling the code into bytecode, assigning a unique address based on the creator’s address and transaction count, and storing it on-chain.

Smart contracts support applications such as Decentralized finance (DeFi), gaming and NFTs, legal contracts, real estate tokenization, DAOs and corporate structures, AI and machine learning integration, IoT applications, and healthcare data management.⁴⁸ Developers test and deploy contracts using tools like Ethereum Remix IDE, Hardhat, or Foundry, with interactions managed through the contract’s ABI and address.⁴⁹

ERC-20 Tokens

ERC-20 is a standardized protocol for creating fungible tokens on the Ethereum blockchain. It defines a set of mandatory functions and rules that ensure tokens can be easily transferred, approved, and tracked across addresses, maintaining interoperability within the Ethereum

ecosystem. By adhering to these standards, developers can create new tokens compatible with existing projects and applications.

These tokens support a wide range of applications, including decentralized applications (dApps), stablecoins, utility tokens, gaming assets, company shares, and fundraising. ERC-20 tokens facilitate secure, trustless transactions and can be used across multiple platforms, providing transparency, scalability, and cross-project functionality for users and developers alike.

Some of the most prominent ERC-20 tokens include Tether (USDT), Uniswap (UNI), Binance Coin (BNB), Aave (AAVE), and Chainlink (LINK). These tokens enable payments, governance participation, smart contract integration, and real-world data synchronization, helping to drive the growth and versatility of the Ethereum blockchain ecosystem.⁵⁰

⁴⁸Investopedia, “Smart Contracts on Blockchain: Definition, Functionality, and Applications”, Achieved, Retrieved August 2025

⁴⁹The Institute of Engineering and Technology, “An efficient secure predictive demand forecasting system using Ethereum virtual machine” Achieved, Retrieved February 2024

⁵⁰Crypto Council for Innovation, “Real-World Use Cases for Smart Contracts and dApps” Achieved, Retrieved September 2022.

⁵¹Quicknode, “An overview of how smart contracts work on Ethereum” Achieved, Retrieved November 2025

NFT

NFTs are unique digital assets on Ethereum, unlike cryptocurrencies, which are fungible. They represent ownership of digital items like art, videos, music, collectibles, and in-game assets, verified via blockchain technology.⁵¹

Early NFTs used ERC-20, but Ethereum introduced ERC-721 for unique tokens and later ERC-1155 for semi-fungible assets. These standards ensure secure transfers, unique identifiers, and metadata linking, forming the foundation for NFT creation and trading.⁵²

Notable Ethereum NFTs include CryptoPunks, Bored Ape Yacht Club, Art Blocks, Decentraland, ENS, and Axie Infinity, spanning digital art, metaverse assets, games, and tradable human-readable Ethereum addresses.

Decentralized finance

Decentralized Finance (DeFi) refers to peer-to-peer finance powered by Ethereum-based blockchain technology. It shifts finance from centralized institutions to open platforms, making financial services accessible to all rather than a select few. While DeFi owes its

existence to the launch of the Ethereum blockchain and smart contracts in 2015, it saw its major period of growth, known as DeFi Summer, in 2020.⁵³

In 2025, DeFi activity surged, with $20 million in lending fees, $177 billion in decentralized exchange volumes, and TVL increasing from $2 billion to $50 billion. Aave V3, Morpho V1, and 79 protocols led this growth.⁵⁴

As of May 10, 2023, DeFi holds $47.479 billion in liquidity across multiple blockchains, mainly Ethereum, prompting banks like Deutsche Bank to explore integration and interoperability with decentralized financial systems for future competitiveness.⁵⁵

DeFi, growing rapidly since 2021, enables lending, trading, and staking, integrating AI, NFTs, Web3, and tokenized assets by 2025, expanding access to finance despite regulatory uncertainty and traditional dominance.⁵⁶ DeFi applications, accessed via Web3-enabled browsers like MetaMask, enable direct interaction with the blockchain.

Major DeFi platforms included Uniswap, From launch in November 2018 to the end of 2020, Uniswap facilitated over $100 billion in trading volume. DeFi services grew from less than $1 billion in 2019 to over $15 billion at the end of 2020, and over $80 billion in May 2021.

⁵²CFI Education Inc, “What is ERC-20?” Achieved

⁵²Kaspersky, “What are NFTs and how do they work?” Achieved

⁵³Bitstamp, What are Ethereum NFTs” Achieved

Enterprise software

Enterprise Ethereum is a permissioned blockchain platform designed for businesses, offering enhanced efficiency, security, and transparency. It enables automation through smart contracts, reduces operational costs, and supports scalable, auditable solutions for supply chain management and financial services.⁵⁸

The Ethereum Enterprise Alliance (EEA), founded in February 2017, is a global organization promoting Ethereum adoption in enterprises, setting standards, fostering collaboration, and includes over 150 organizations, with nine brand-name members such as JPMorgan Chase ($811B).⁵⁹

⁵⁴Springer Nature, “A Short History of Decentralized Finance (DeFi)”, Achieve, Retrieval November 2025

⁵⁵Investing.com, “DeFi Development Corp. reports $74m gain from digital assets in Q3”, Achieved, Retrieved, November 2025.

⁵⁶KPMG, “Is decentralized finance the future of finance?” Achieved

⁵⁷Statista, “Decentralized Finance (DeFi) - statistics & facts” Achieved, Retrieved October 2025

⁵⁸Wharton, University of Pennsylvania, “DeFi Beyond the Hype The Emerging World of Decentralized Finance” Achieved, Retrieved May 2021

⁵⁹Codezeros, “Ethereum for Enterprise: Benefits and Real-World Use Cases” Achieved, Retrieved September 2024

Permissioned ledgers

Permissioned blockchains restrict access and participation to approved entities, offering controlled transparency and security. Unlike public blockchains, participants require permission to join. Examples include Hyperledger Fabric, R3 Corda, and JPMorgan’s Quorum.

JPMorgan Chase introduced JPM Coin on Quorum in 2017, a permissioned Ethereum blockchain balancing privacy and regulatory transparency. In 2020, ConsenSys acquired Quorum, offering open-source, customizable enterprise Ethereum solutions for secure transactions and payments.⁶¹

Consensys positioned Quorum to accelerate enterprise Ethereum application development, providing development services to clients like JPMorgan Chase and South African Reserve Bank, and in 2022, launched Quorum Blockchain Service on Microsoft Azure as a fully managed platform.⁶²

Performance and scalability

Since 2015, Ethereum has pioneered blockchain with smart contracts, dApps, DeFi, and NFTs. Network growth caused congestion and high fees, prompting PoS, sharding, Layer 2, and future upgrades for scalability, efficiency, and privacy.⁶³

On April 28, 2025, Ethereum Improvement Proposal 9698 was announced, aiming to raise the gas limit from 36 million to 3.6 billion, potentially increasing transaction speed to 2,000 TPS starting June 1, 2025.⁶⁴

As of August 2022, Ethereum averaged 1,121,920 transactions per day, surpassing 1 million daily since June 2020, growing from 5,200 in August 2015 to 877,280 by January 2018. However, Ethereum still faces challenges, including scalability limits (15–30 TPS), high gas fees, network congestion, and privacy concerns, making Layer 2 solutions and protocol upgrades critical for broader adoption.⁶⁵

Layer 1 blockchains, such as Ethereum, face scalability constraints, high transaction fees, and network congestion. Layer 2 solutions, including rollups, state channels, sidechains, and hybrid models, enhance throughput and reduce costs, though challenges remain with liquidity fragmentation, security, and cross-chain interoperability.⁶⁶

⁶⁰The Motley Fool, “9 Brand-Name Companies That Have Joined the Enterprise Ethereum Alliance” Achieved, Retrieved July 2017

⁶¹Rejolut, “Permissioned Blockchain 101: A Comprehensive Overview” Achieved

⁶²Consensys, “Consensys Acquires J.P. Morgan’s Quorum to Advance Enterprise Blockchain Adoption” Achieved, Retrieved, August 2020

⁶³Tech Target, “Top 8 blockchain platforms to consider in 2025” Achieved, Retrieved January 2025

⁶⁴BTC Market, “The future of Ethereum: Scalability, upgrades and beyond” Achieved, Retrieved April 2025

Legal status and regulation

Since its 2014 ICO, Ethereum initially qualified as a security under the Howey Test, but by 2018, the SEC reclassified it due to decentralization. By 2022, Ethereum averaged 1,121,920 daily transactions, supporting smart contracts, DeFi, and NFTs, while Japan recognized it as a currency.⁶⁷

On October 10, 2019, CFTC Chairman Heath Tarbert confirmed Ether as a commodity under the Commodity Exchange Act, enabling future Ether derivatives trading. The classification reflects Ethereum’s decentralized network, distinguishing it from securities tied to common enterprise investments.⁶⁸

Ether is treated as intangible personal property, transferable and usable as collateral. On June 14, 2023, Odinet, Tosato, and Jenquin highlighted that the 2022 UCC Amendments permit floating liens on digital assets, including cryptocurrencies and NFTs.⁶⁹

⁶⁵Coin Desk, “Ethereum Could Supercharge Transaction Speed to 2,000 TPS Thanks to Bold New Proposal” Achieved, Retrieved April 2025

⁶⁶ByBit, “Ethereum Statistics 2022 and 2023: Merge, Transactions and Popularity” Achieved

⁶⁷Nasscom, “Layer 2 Blockchain Solutions in 2025: Scaling Ethereum and Beyond with Faster, Cheaper Transactions” Achieved, Retrieved July 2025

that Ether is a commodity under the Commodity Exchange Act, enabling future trading in Ether derivatives

⁶⁸Kriptomat.hr, “Ethereum is everything?” Achieved

⁶⁹Commodity Future Trading Commission, Press Release, Achieved, Retrieved, October 2019.  

⁷⁰American Bar Association, “How to Create a Floating Lien on Digital Assets” Achieved, Retrieved July 2023