"Pretty meh volume" for the group, said one analyst.
The Ethereum price is $1,665.86, a change of -3.45% over the past 24 hours as of 4:52 a.m. The recent price action in Ethereum left the tokens market capitalization at $200,304,446,330.79. So far this year, Ethereum has a change of 39.38%. Ethereum is classified as a Smart Contract Platform under CoinDesks Digital Asset Classification Standard (DACS).
Ethereum is a blockchain-based software platform that can be used for sending and receiving value globally with its native cryptocurrency, ether, without any third-party interference. But it can also do much more than that.
First proposed in 2013 by Russian-Canadian computer programmer Vitalik Buterin, Ethereum was designed to expand the utility of cryptocurrencies by allowing developers to create their own special applications. Unlike traditional apps, these Ethereum-based applications, called “decentralized applications,” or dapps, are self-executing thanks to the use of smart contracts.
Smart contracts are code-based programs that are stored on the Ethereum blockchain and automatically carry out certain functions when predetermined conditions are met. That can be anything from sending a transaction when a certain event takes place or loaning funds once collateral is deposited into a designated wallet. The smart contracts form the basis of all dapps built on Ethereum, as well as all other dapps created across other blockchain platforms.
Unlike many other cryptocurrencies, Ethereum’s cryptocurrency has an unbounded supply, meaning there is no limit to how many ether can enter circulation.
According to the project’s official website, the annual inflation rate of ether is about 4.5%. Block rewards have been reduced two times since the first ever Ethereum block was mined. That block is known as the genesis block. The reductions in block rewards aren’t programmed into Ethereum’s code like Bitcoin’s halving events are. Instead, members of the community propose changes, called “Ethereum Improvement Proposals,” or EIPs, and the rest of the community votes on whether to include the proposals in updates to Ethereum’s software code. Here is a breakdown of ether’s issuance schedule to date.
The issuance rate is also affected by a feature known as the “difficulty bomb.” This refers to a mechanism that increases the difficulty of mining on the original Ethereum blockchain (prior to the transition to the proof-of-stake Ethereum 2.0 blockchain. See below).
Increasing mining difficulty lengthens the time it takes for miners to discover new blocks. That means less ether enters circulation in the form of block rewards, which in turn tapers overall issuance. This mechanism was activated, reset and delayed several times between 2017 and 2020, mainly because Ethereum developers needed more time to work on key updates ahead of the 2.0 upgrade.
From ether’s official launch date in 2014 to March 2017, the token’s price remained rangebound between $0.70 and $21. It wasn’t until the 2017 bull crypto market started to pick up in May of that year that ETH price went above $100 for the first time. From there, ether skyrocketed to a peak of $414 in June 2017 before correcting. It took another five months for bullish momentum to regain strength. By that point, the entire crypto market was starting to experience huge buying pressure, which elevated almost every crypto token to new highs. By January 2018, ETH’s price peaked at $1,418 before it fell sharply.
It took about three years for the second-largest cryptocurrency by market cap (behind bitcoin) to retest its previous all-time high price. Between February and May 2021, eth’s price more than tripled to set a new all-time high of $4,379.
Ethereum's blockchain comprises a sequence of "blocks" filled with transactions. Each transaction reflects a change in the Ethereum network's state, such as the transfer of ETH from one user to another, or the execution of a smart contract. Previously, miners used to validate these transactions and grouped them into blocks in a process known as mining. However, Ethereum recently transitioned from a proof-of-work mechanism to a proof-of-stake model, where validators now manage this process.
The Ethereum blockchain operates on consensus, implying that a majority of nodes (computers within the Ethereum network) must agree on the network's state at any given moment. This consensus maintains the system's integrity and prevents double-spending, a scenario where a user might spend the same cryptocurrency more than once.
Ethereum differs from Bitcoin in its concept of accounts. While Bitcoin has unspent transaction outputs that can be considered as chunks of Bitcoin sent but not yet spent, Ethereum employs a more conventional accounting system with accounts and balances. Ethereum accounts are of two types: externally owned accounts (controlled by private keys) and contract accounts (controlled by their contract code).
Ethereum is programmable, enabling developers to create and run decentralized applications or dApps. These dApps are driven by smart contracts, which facilitate automatic execution of agreements without requiring a trusted third party. This functionality paves the way for various applications, including decentralized finance (DeFi), supply chain management, and many others.
Ethereum initially functioned on a proof-of-work consensus mechanism, akin to Bitcoin. However, with the completion of the Ethereum Merge, it has transitioned to a proof-of-stake mechanism. In this model, validators are selected to create new blocks based on the quantity of ETH they possess and are willing to "stake" as collateral. This transition is aimed at enhancing the scalability and energy efficiency of the Ethereum network.
Under the proof-of-stake mechanism, validators must "stake" at least 32 ETH to participate in the block validation process and secure the Ethereum network. These funds are locked into a smart contract. The more ETH a validator stakes, the higher the probability of them being chosen to propose a new block of data transactions for confirmation on the blockchain. When a validator proposes a block and it gets approved by other validators, the proposing validator is rewarded.
The Ethereum network continues to evolve with upgrades and improvements proposed and implemented by its community. A recent upgrade, known as the Shanghai upgrade, introduced staked ETH withdrawals and several Ethereum Improvement Proposals (EIPs) aimed at optimizing gas fees for developers.
Staking on the Ethereum blockchain is a process that is part of its consensus mechanism, specifically the Proof-of-Stake (PoS) model, which Ethereum transitioned to with the Ethereum Merge.
In contrast to the Proof-of-Work (PoW) model, where miners solve complex mathematical problems to validate transactions and create new blocks, the PoS model instead chooses validators based on the number of tokens they are willing to "stake" or lock up as collateral.
Not everyone has the necessary amount of ETH to stake, and not everyone wants to run their own validating node due to technical requirements. For these reasons, staking pools and services have emerged, allowing users to pool their ETH together to reach the staking minimum and share in the returns.
Ether (ETH) is the main token of the Ethereum blockchain and acts as the primary “fuel” that powers all activity on it. “Gas” refers to an amount of ether that’s needed to perform a certain function on the network, such as:
Sending transactions (swapping, trading or moving Ethereum-based tokens around)
How much gas you pay for each action on the Ethereum blockchain is calculated based on two things:
Cost of an operation on Ethereum = gas cost x gas price
These contracts then have to be converted from high-level languages (that humans can understand) to low-level languages (that a machine can understand). That’s because a computer environment called the “Ethereum Virtual Machine,” or EVM, is where all smart contracts are deployed and executed. This EVM is built into every full Ethereum node and can carry out more than 140 different operation codes (opcodes). These are essentially machine instructions that can be strung together to perform virtually any task, which is what the term “Turing-complete” refers to.
Ethereum token standards are the blueprints for creating tokens that are compatible with the broader Ethereum network. These include tokens that can be traded for one another (fungible) as well as tokens that are inherently unique and cannot be mutually exchanged (NFTs). Ethereum token standards were invented by Ethereum developers to help users create new digital currencies more easily, faster and cheaper than starting from scratch.
While there are several different token standards known as “ERC” deployed on the ethereum network, three are commonly used:
Ethereum 2.0, also known as “Serenity,” is a major upgrade that aims to make the world’s second-largest crypto project faster, more efficient and more scalable by migrating the network from a proof-of-work to a proof-of-stake system.
Dubbed “Casper,” Ethereum’s new proof-of-stake (PoS) system involves users of the network locking up their coins to become network contributors, as opposed to using expensive, energy-intensive mining equipment. Each staker is required to lock up 32 ethers or to join a staking pool and combine their ether with others to participate in creating new blocks on the Ethereum PoS blockchain. The Ethereum 2.0 upgrade is rolling out in multiple phases. The initial ones include:
Phase 0 launched in December 2020, and the Beacon is a separate Ethereum blockchain that introduced a proof-of-stake system. It’s also responsible for new block creation, transaction verification, staking rewards and managing new Ethereum blockchains called “shard chains.”
In the next major phase of development, Ethereum’s Beacon chain will be bridged to the main Ethereum network and will replace the current, energy-intensive proof-of-work system with proof-of-stake. Network stakeholders known as “validators” will begin producing blocks, verifying transactions and managing the security of the blockchain in place of miners after Ethereum and Eth 2.0 are merged.
After the merge, there will be additional, smaller upgrades needed. The next task for Ethereum developers will be enabling sharding, which creates multiple mini-blockchains. Each shard will be responsible for verifying its own set of transactions rather than the entire network verifying every single transaction. The Beacon chain will act as the main coordinator between these shards, randomly assigning validators to each.
With PoS and sharding both enabled, Ethereum developers expect that they will make further tweaks to enhance the security of the network. That includes adding anonymity features to conceal validator identities behind block proposals. It also includes leveraging new technologies such as the Verifiable Delay Function (VDF) to further secure the randomness of validator assignments and make it harder for malicious actors to disrupt the network.
As mentioned above, Ethereum was originally conceived by Buterin, the Russian-Canadian computer programmer. At the time, Buterin was just 19 years old.
In November 2013, he released the Ethereum white paper – a technical document that outlined the vision and technology behind the proposed project. A month later, Buterin asked Israeli-American Amir Chetrit to join his project. The two had worked together on a separate project called “Colored Coins” – which subsequently laid the foundations for the NFT market.
Not long after publishing the white paper, Buterin attended a Bitcoin conference in Miami, where he met a number of interested developers and investors who joined the Ethereum project as co-founders. Those included Mihai Alisie, Anthony Di Iorio and Charles Hoskinson
Joseph Lubin, Jeffrey Wilcke and Wood were introduced later as the project’s last three co-founders. Together, the eight-member team formed an entity known as the Ethereum Foundation – a Switzerland-based nonprofit organization. A dispute between Hoskinson and Buterin over whether Ethereum should be a for-profit company, led to Hoskinson leaving the project.
Over the course of a few short years, all seven co-founders stepped down or became detached from Ethereum, leaving Buterin as the last remaining active co-founder.
The Ethereum protocol officially launched in 2015 and quickly rose to become the world’s second-largest cryptocurrency by market value behind bitcoin.
Daily transactions, daily active addresses and total value locked on Ethereum have all fallen since the upgrade, according to a report.
The Merge marked the completion of Ethereum's transition to the proof-of-stake consensus mechanism.
The fund's discount to NAV had ballooned to nearly 60% late in 2022.
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