Ethereum provides a decentralised virtual machine that enables the creation and deployment of decentralised applications (dApps) and smart contracts. Smart contracts are programs stored on the Ethereum blockchain that run automatically when predetermined conditions are met.
The Ethereum blockchain is secured through a consensus mechanism called proof-of-work, where miners compete to add new blocks to the chain. Ethereum is transitioning to a more energy-efficient proof-of-stake system called The Merge, which went live in September 2022.
Ethereum has undergone several planned network upgrades since its launch to improve functionality and prepare for the shift to proof-of-stake.
In 2022, the Arrow Glacier update delayed The Merge to June 2022. Ethereum also decided to rebrand its terminology, dropping “Ethereum 2.0” for more accurate terms like the “consensus layer” and “execution layer.”
The Merge went live on September 15, 2022, transitioning Ethereum from proof-of-work to proof-of-stake. This reduced Ethereum’s energy usage by ~99.9% while still retaining its functionality.
The Shanghai Upgrade, which happened in March 2023, enabled stakers to unstake and withdraw staked ETH and rewards. This unlocked over 17.5 million ETH currently staked on the network. Hence, the Ethereum price AUD changed accordingly.
Origins and Founders
The idea for Ethereum was first proposed in late 2013 by Vitalik Buterin, a Russian-Canadian programmer and co-founder of Bitcoin Magazine. Buterin envisioned Ethereum as a blockchain-based computing platform that would go beyond the financial applications allowed by Bitcoin to also support more advanced applications like smart contracts.
In 2014, Buterin formally announced Ethereum at the North American Bitcoin Conference in Miami and launched a crowd sale to help fund its development. The crowdsale attracted the interest of fellow programmers, including British developer Gavin Wood and Swiss developer Jeffrey Wilcke.
Together with six other co-founders, including Charles Hoskinson, Anthony Di Iorio, and Mihai Alisie, Buterin launched the Swiss non-profit Ethereum Foundation to continue research and development. Ethereum underwent a crowdsale in July and August 2014, raising over $18 million in Bitcoin.
Related: Bitcoin price (AUD)
How Ethereum Works
Ethereum utilises blockchain technology to allow a network of computers to agree on the execution of code without the need for a central authority. This enables users to create censorship-resistant decentralised applications (dApps) and smart contracts.
The native currency of the Ethereum blockchain is called Ether (ETH). ETH is required to execute smart contracts on the Ethereum network and serves as a means to transact value between users.
Like Bitcoin, Ethereum uses a proof-of-work consensus algorithm to secure the network and validate transactions. Miners compete to solve computational puzzles in order to create new blocks and are rewarded with ETH for each successful block created.
Ethereum (ETH) is the second largest cryptocurrency after Bitcoin in terms of market capitalisation. The Ethereum price AUD provides insight into how much 1 ETH is worth in Australian dollars.
As it stands, ETH reached its all-time high in November 2021 at a price of $6,100.