Ethereum is an open-source, public, blockchain-based distributed computing platform featuring smart contract (scripting) functionality.[2] It provides a decentralized Turing-complete virtual machine, the Ethereum Virtual Machine (EVM), which can execute scripts using an international network of public nodes. Ethereum also provides a cryptocurrency token called "ether", which can be transferred between accounts and used to compensate participant nodes for computations performed.[3] "Gas", an internal transaction pricing mechanism, is used to mitigate spam and allocate resources on the network.[2][4]
Ethereum was proposed in late 2013 by Vitalik Buterin, a cryptocurrency researcher and programmer. Development was funded by an online crowdsale during July–August 2014.[5] The system went live on 30 July 2015.[6]
In 2016 Ethereum was forked into two blockchains, as a result of the collapse of The DAO project, thereby creating Ethereum Classic.
Ethereum was initially described in a white paper by Vitalik Buterin,[10] a programmer involved with Bitcoin, in late 2013 with a goal of building decentralized applications.[11][12] Buterin had argued that Bitcoin needed a scripting language for application development. Failing to gain agreement, he proposed development of a new platform with a more general scripting language.[13]:88
At the time of public announcement in January 2014, the core Ethereum team was Vitalik Buterin, Mihai Alisie, Anthony Di Iorio, and Charles Hoskinson.[14] Formal development of the Ethereum software project began in early 2014 through a Swiss company, Ethereum Switzerland GmbH (EthSuisse).[15][16] Subsequently, a Swiss non-profit foundation, the Ethereum Foundation (Stiftung Ethereum) was set up as well. Development was funded by an online public crowdsale during July–August 2014, with the participants buying the Ethereum value token (ether) with another digital currency, bitcoin.[5] While there was early praise for the technical innovations of Ethereum, questions were also raised about its security and scalability.
Several prototypes of the Ethereum platform were developed by the Foundation, as part of their Proof-of-Concept series, prior to the official launch of the Frontier network. The last of these prototypes culminated in a public beta pre-release known as "Olympic".[17][18] The Olympic network provided users with a bug bounty of 25,000 ether for stress testing the limits of the Ethereum blockchain.
After Olympic, the Foundation announced the beginning of the Frontier network to mark the tentative experimental release of the Ethereum platform in July 2015.[19][20] Since the initial launch, Ethereum has undergone several planned protocol upgrades called milestones, which are important changes affecting the underlying functionality and/or incentive structures of the platform.[21][22]
The current milestone is named "Homestead" and is considered stable.[23][24] It includes improvements to transaction processing, gas pricing, and security.[25][23][26] There are at least two other protocol upgrades planned in the future, i.e. Metropolis and Serenity. Metropolis is intended to reduce the complexity of the EVM and provide more flexibility for smart contract developers.[22] The move to Serenity is still uncertain, but should include a fundamental change to Ethereum's consensus algorithm to enable a basic transition from hardware mining (proof-of-work) to virtual mining (proof-of-stake).[22][27] Improvements to scalability, specifically sharding, are also said to be a key objective on the development roadmap.
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