What Is Ethereum (ETH)? Price, History & Where To Buy

Ethereum is essentially what many call the future of the internet. An upgrade of the traditional web as we know it, devoid of censorship and discrimination – providing access to all.

Current Ethereum (ETH) Price

Ethereum (ETH) Exchange Rate Calculator

(for more see Ethereum (ETH) Price Calculator)

Historical Ethereum Price Chart

You’ve likely heard about Ethereum’s native token ether (ETH) which is a largely popular cryptocurrency available on many exchanges. Let’s take a look at the Ethereum platform, Ethereum protocol, smart contracts, decentralized applications, and the Ethereum foundation – in simple terms.

How Ethereum Works

Ethereum is a decentralized blockchain network that was created to address the limitations of Bitcoin. It was created by Vitalik Buterin and his co-founders, and the white paper for Ethereum was released in 2013.

Simply put, the Ethereum network consists of thousands of computers operating worldwide to maintain the integrity and security of the network. This is what you would call a decentralized network. The main purpose of having a multitude of computers maintaining the network is to ensure that even if one computer goes down, the network is still upheld.

Ethereum Virtual Machine (EVM), which is dubbed as a “world computer” is the computing software through which all these decentralized systems are interconnected. Sounds complicated? It is rather complex but all you need to know is that EVM is integral to the preservation and functionality of the Ethereum blockchain.

Any individual using Ethereum is using custom Ethereum smart contract blockchain technology.

What Is Ethereum Used For?

Bitcoin. Ethereum. What’s the difference?

As mentioned above, Ethereum is considered the future of the internet. But why?

Firstly, let’s take a look at the cryptocurrency that people purchase. Ether (ETH) is used to make payments, as ‘gas‘ when interacting on the Ethereum blockchain, and as a store of value – it’s the commonly traded cryptocurrency available on exchanges.

Ethereum network on the other hand has several uses from NFTs to decentralized applications (DApps) which individuals can interact with. Think of it as the internet, you can use multiple applications and perform various tasks, except you need ETH to do this.

The place where all of these DApps are accessible is called the ecosystem. To participate in this ecosystem you need to use ETH cryptocurrency. ETH is the token that powers the entire network, much like the dollar powers the economy.

You may have heard of the term decentralized finance (DeFi) before, this is simply the alternative to traditional intermediaries like brokers and banks – DeFi is made possible by smart contracts on the blockchain.

Ethereum has grown in use directly because of DeFi, which allows individuals access to digital marketplaces, staking (you earn interest on your crypto), play-to-earn gaming, and an ever-expanding list of additions.

The more DApps individuals use, the faster the growth of the Ethereum network. Developers deploy these apps on the Ethereum blockchain, using a smart contract code that ensures safe and secure access for the Ethereum community.

For example, people who want to buy and sell NFTs make use of DApps on the Ethereum blockchain allowing them to interact directly with other users – without an intermediary.

The decentralized nature of the Ethereum blockchain allows individuals to control their funds innovatively. They can invest in digital assets, participate in decentralized financial tools, and even earn cryptocurrency from play-to-earn games, without third-party interference.

This entire process is automated and handled securely with the implementation of smart contracts.

Where To Buy Ethereum?

After that quick crash course about what Ethereum is used for, you may be wondering where you can purchase Ether (ETH).

ETH is among the most prominent cryptocurrencies available on the market. It’s available on several centralized crypto exchanges. You’ll need to deposit funds on the crypto exchange and purchase ETH by placing an order.

These crypto exchanges are the safest place where you can buy, sell and store Ethereum and other cryptocurrencies.

Five of the most popular crypto exchanges are:

1. Binance (US Customers use Binance.US)
2. Gate.io
3. Coinbase
4. KuCoin
5. Bitfinex

All of the above exchanges allow users to buy, sell, transfer and store Ethereum in a digital Ethereum wallet, on the exchange. You can simply use your debit or credit card to purchase Ethereum – the Ethereum will then reflect in your Ethereum wallet.

If you want to use the Ethereum ecosystem you’ll need to send your ETH to a digital wallet such as Metamask.

How long has Ethereum existed?

The Ethereum white paper was released in 2013 but the Ethereum platform was only released in 2015. It was created by Vitalik Buterin and his co-founders.

Since its inception in 2015, it has been subject to multiple network upgrades, most notably the “hard fork” of Ethereum and Ethereum Classic in 2016. The choice to upgrade the network came after the blockchain was compromised and $50m worth of ether was stolen.

The upgrades have improved conditions for participants, evolved the role of an Ethereum node, deployed a multitude of innovative DApps, and grown the network substantially.

Ethereum is currently growing at a rate of 1.53M new addresses per month. It’s also currently the second-largest cryptocurrency in the world, surpassed only by bitcoin.

What’s controversial about Ethereum?

When it comes to cryptocurrencies there is always some controversy, and Ethereum is no exception. Let’s take a look at 3 of the top controversies surrounding Ethereum.

1. The Ethereum Network Is Slow: One of the largest issues users have with the Ethereum network is how slow it runs. The transaction execution of the network is limited, and only a certain number of transactions can be processed every second. When there’s a surge in individuals using the network, it becomes congested and slow.
2. Ethereum Has Exorbitant ‘Gas’ Fees – One of the largest controversies surrounding Ethereum is the high transaction fee or ‘gas’ fee incurred when doing a transaction. When there is high network activity, miners choose transactions with the highest possible gas fees.

   Because miners opt for transactions that return higher rewards, users end up competing to get their transactions validated. This drives gas fees higher and higher as network activity surges. The Ethereum 2.0 upgrade promises to resolve this issue.

3. Ethereum 2.0 Upgrade Affects Miners – Many individuals are concerned about the upcoming upgrade that Ethereum will undergo. The changing of the algorithm from Proof of Work (PoW) to Proof of Stake (PoS) will reduce gas fees but also doesn’t accommodate miners. After the upgrade, the mining of ETH will essentially become worthless.

How many Ethereum are there?

There are currently slightly more than 119 million Ethereum that have been issued and are in circulation.

Unlike bitcoin, Ethereum has an exponentially fluctuating supply. After the EIP-1559 upgrade, mining ETH became less profitable, the block size needed to create coins was increased, and transaction fees were burnt instead of being sent to miners.

How does Ethereum mining work?

Every transaction that takes place on the Ethereum blockchain is recorded and stored in a “block”. Mining Ethereum requires these blocks to be validated before allocating them to the network.

In a nutshell, transactions on the Ethereum network require miners to verify before they’re fulfilled – this is called the proof of work consensus method.

Miners use computing power to find a unique code for each block. In turn, they’re incentivized by receiving ETH for their “proof” of work. Once blocks are confirmed they can’t be changed and they are a transparent record of all network transactions. All these Ethereum transactions are public and can be seen but not altered.

Miners are rewarded in ETH – which comes from the gas fee charged to a user that initiates a transaction. The gas fee also serves as a limitation to the number of actions a user can make. Every Ethereum transaction has a gas fee attached.

With the proposed Ethereum 2.0 upgrade mining Ethereum will become worthless.

What is the market cap of Ethereum?

The market cap of Ethereum is:

Market cap = total amount of coins in circulation x market value of one ETH

Eg. 119,000,000 x $3,000 = $357Bn

The market cap fluctuates according to circulating supply and market price. In 2020, the market cap of Ethereum was less than a third of the current market cap in 2022.

Biggest Competitors Of Ethereum

There are multiple purposes and functions that individual blockchains aim to achieve. Essentially, defining other blockchains as ‘competitors‘ can be slightly ambiguous. However, there are a few factors that can be considered.

The biggest competitors Ethereum has would be blockchains that offer users the same or similar features. For example, any given competitor to Ethereum would need to offer decentralized applications in their ecosystem, cheaper or relative transaction fees, access to DeFi tools, and have a secure network.

When assessing these criteria, some of the biggest competitors are Solana (SOL), Avalanche (AVAX), Cardano (ADA), and Polkadot (DOT).

Any user with an Ethereum account can invest in an Ethereum project deployed on the Ethereum blockchain. Similarly, the same things that make Ethereum “work” are readily available on competing blockchains – the abovementioned competitors are known as “Ethereum killers”.

What are the plans for Ethereum?

The plans for Ethereum involve growing user adoption, increasing network activity, and upgrading the consensus algorithm from Proof of Work (PoW) to Proof of Stake (PoS).

The upcoming Ethereum 2.0 upgrade will change ETH into a deflationary token – the circulating supply will decrease. This is made possible because the amount of ETH issued will be less than the amount being burned in transaction fees.

The Ethereum ecosystem continues to expand and attract more developers. However, if upgrades are unsuccessful users will likely turn to cheaper and faster blockchain platforms.

Pros and Cons of Ethereum:

Pros:

• Ethereum Web 3.0 Is Non-discriminatory – Access to Dapps in the Ethereum ecosystem is completely non-discriminatory – allowing users to interact and engage anonymously. No intermediary can refuse a specific user access based on their race, preferences, or credit history. Users are equal and have equal access to things like decentralized finance tools and lending protocols.
• Building and Development – There is a lot of development taking place on the Ethereum blockchain. Many developers are building innovative tools and deploying projects. The biggest NFT marketplace, Opensea, is built on the Ethereum blockchain.
• Rapid Growth In Daily Users – The number of daily users active on the Ethereum network has grown exponentially in recent years, and continues to grow rapidly. The number of active users peaked in 2021, reaching nearly 1 million active users in a single day.
• Available On Most Crypto Exchanges – ETH is among the most popular cryptocurrencies available today. It is readily available on most exchanges, making it easy to purchase for anyone.

Cons:

• High Transaction Fees – A major issue that users have with Ethereum are the exorbitant transaction fees. Because of network congestion, miners validate transactions that are most profitable for them, which causes a surge in transaction fees.
• The Network Is Often Slow – When there are periods of high network activity, the entire network slows down. This is because the network can only process a certain amount of transactions per second. When the network activity is very high, the network becomes slow.
• Scalability Issues: The Ethereum network is currently struggling to handle high volumes of transactions due to its limitations. As the number of DApps being deployed increases, the need to process more transactions also increases – this highlights a major scalability issue.
• Competition – Even though Ethereum is growing in terms of daily active users, its competitors are also growing at a rapid pace. Competitors are offering users similar features, most with lower transaction fees – this incentivizes some users to opt for competitor blockchains.

Ethereum User Reviews

Review Summary

Recent Reviews

Submit a Review