In 2013, Vitalik Buterin, founder of Ethereum, published an article entitled "Ethereum: A Next-Generation Smart Contract and Decentralized Application Platform", in which the concepts and ideas of "Ethereum" and "next-generation cryptocurrency and decentralized application platform" were first proposed.
In 2014, Vitalik Buterin officially announced the Ethereum project. In July of the same year, Ethereum launched a special crowdfunding to raise project funds. The crowdfunding of the Ethereum project lasted 42 days and only raised Bitcoin. In 2015, when Ethereum was officially released, the 9,000 addresses participating in the crowdfunding received a total of 60 million Ethers from the Ethereum project team. These transactions were directly written into the Genesis Block of Ethereum. In addition, Ethereum also issued 12 million Ethers to pay directly to the Ethereum Foundation. Ethereum has a circulation of 72 million Ethers in the Genesis Block, and it has increased through mining every year since then. Unlike the limited total supply of 21 million Bitcoins, the supply of Ethereum is theoretically unlimited.
Based on Bitcoin, Ethereum has made many improvements, such as providing services and smart contracts for building decentralized applications. Compared with the Bitcoin Network, Ethereum's block generation speed is faster and more scalable, and there is no risk of the central point falling. Therefore, Ethereum is also known as blockchain 2.0.
How does Ethereum (ETH) Work?
Vitalik Buterin has built Ethereum into a platform for running smart contracts and decentralized applications. Ethereum has built-in Turing's complete dedicated programming language Solidity. With this scripting language, developers can create their own "smart contracts" to realize the transfer of digital assets on the blockchain. Meanwhile, developers can use official tools to develop decentralized applications and run them on the Ethereum virtual machine configured by the Ethereum Network. Meanwhile Ethereum users can use Ethereum as the "gas fee" of the system to maintain the operation of applications.
As for the consensus mechanism, the consensus mechanism used by Ethereum is still the same as Bitcoin as the PoW (proof of work) mechanism. However, Vitalik Buterin, the founder of Ethereum, stated that it is expected to realize the conversion of the Ethereum consensus mechanism as early as August 2022, when the Ethereum consensus mechanism will be converted into the PoS (proof of stake) mechanism.
In the token network using PoW (proof of work) mechanism, each node can account and broadcast bills, and each transaction will be recorded on a chain composed of many blocks. Since the capacity of each block is limited, if the trading information in the previous block is saturated, a new block will be generated to record the new trading information. At this time, the latest "to be validated" transaction will determine the bookkeeping right of the new block through the problem-solving speed of many miners (nodes). Nodes (i.e. miners) participating in the competition for bookkeeping rights need to use powerful computer hardware to solve very complex mathematical problems. The first miner who solves the answer will receive token rewards and subsequent handling fees. This process is also called "mining".
After the conversion of Ethereum’s consensus mechanism, mining will no longer be conducted by using graphics card machines or other devices to solve mathematical problems, but only a sufficient amount of Ethereum will be staked. It is expected that it will reduce the energy consumption of Ethereum by 99.98%, but it will also impact the current miners on Ethereum. They may be forced to turn to mining tokens on other blockchains, resulting in a sharp increase in the mining difficulty of other token networks.
What is Ethereum (ETH) ?
The Bitcoin network is a distributed database, while Ethereum can be considered a distributed computer. All nodes of Ethereum together constitute the CPU of the system, and smart contracts and DAPPs play the role of programs.
Users can download and write software on Ethereum, such as establishing exchanges, storing accounts and issuing tokens, meanwhile, they can also connect to Ethereum, run smart contracts to create new transactions and conduct block mining. Compared with Bitcoin, Ethereum has the advantages of faster block generation, stronger expansibility and no risk of central point falling. Therefore, Ethereum is also known as blockchain 2.0.
Ethereum (ETH) Crypto Wallet
In addition to placing ETH in the Gate.io exchange to facilitate trading, ETH can also be placed in the crypto wallet.
There are many options for Ethereum crypto wallets. You can go to the wallet page of the Ethereum official website to check.