The Evolution of Public Blockchains
- Blockchain 1.0: Bitcoin introduced decentralized digital currency with basic transaction recording.
- Blockchain 2.0: Ethereum revolutionized the space with smart contract functionality.
- Blockchain 3.0: Next-gen platforms focus on scalability, developer experience, and user accessibility.
Understanding Ethereum
Ethereum is an open-source, blockchain-based distributed computing platform enabling developers to build decentralized applications (DApps) and smart contracts. Founded in 2015 by Vitalik Buterin and others, Ethereum extends beyond cryptocurrency to create a generalized platform for decentralized innovation.
Key Features
- Smart Contracts: Self-executing agreements with predefined rules.
- DApps: Applications running on a peer-to-peer network rather than centralized servers.
- Ether (ETH): Native cryptocurrency used for transaction fees and network incentives.
- Consensus Mechanism: Transitioned from Proof of Work (PoW) to energy-efficient Proof of Stake (PoS).
Development Phases
| Phase | Description |
|---|---|
| Frontier | Initial release (2015) with basic functionality. |
| Homestead | First stable version (2016) with security improvements. |
| Metropolis | Privacy upgrades (2017-2019) through Byzantium and Constantinople hardforks. |
| Serenity | Ethereum 2.0 transition to PoS, improving scalability (2020-present). |
Technical Architecture
| Component | Function |
|---|---|
| P2P Network | Nodes communicate via DEVp2p protocol on TCP port 30303. |
| EVM | Executes smart contract bytecode in a sandboxed environment. |
| Blockchain DB | Stores transaction history and system state using LevelDB. |
| Client Software | Implementations like Geth provide node functionality. |
Core Concepts
- Accounts: Addresses holding ETH balance and contract code (EOA vs. Contract Accounts)
- Transactions: Operations that modify blockchain state (value transfers or contract calls)
- Gas: Computational unit measuring operation costs (prevent infinite loops)
Ethereum's Economic Model
👉 Learn about ETH staking rewards
- Initial Distribution: 72M ETH created during 2014 crowdsale
Current Issuance:
- Previous PoW block rewards (3 ETH/block + uncle incentives)
- Current PoS validation rewards (~4-5% APR)
Technical Foundations
Turing Completeness
Ethereum's EVM can perform any computation given sufficient resources, making it:
- Capable of running complex algorithms
- Resource-constrained by gas fees to prevent abuse
DApp Components
- Smart Contract Backend: Business logic on blockchain
- Web Frontend: Traditional UI connecting to contracts
Token Standards
| Type | Use Case | Example |
|---|---|---|
| FT | Interchangeable assets | ERC-20 tokens |
| NFT | Unique digital items | CryptoKitties |
FAQ Section
Q: How does Ethereum differ from Bitcoin?
A: While both use blockchain, Ethereum enables programmable contracts beyond simple value transfer.
Q: What's the purpose of gas fees?
A: Gas prevents network spam and compensates validators for computational work.
Q: Can Ethereum handle enterprise applications?
A: Yes, with layer 2 solutions improving throughput for business use cases.
👉 Explore Ethereum developer tools
Glossary
| Term | Definition |
|---|---|
| ERC | Token standard proposals (e.g., ERC-20) |
| HD Wallet | Hierarchical deterministic key management |
| Keccak256 | Cryptographic hash function used in Ethereum |