Ethereum (ETH) is currently the second-largest cryptocurrency among thousands in existence. It introduced groundbreaking innovations that paved the way for limitless opportunities in DeFi, dApps, smart contracts, NFTs, and more. Learn what Ethereum is, how it works, and how to buy it.
Written by Thomas - Last updated on 01/14/2025 at 20:45 by Thomas
The advantage of these platforms is that they are easy to handle. Just create an account and buy the amount of cryptos you want with your credit card as if you were making any online purchase.
Also, you can directly store your ETH on the site without the need for a digital wallet external to the platform. Sites like Binance even offer fixed savings formulas.
What is Ethereum ?
Ethereum was launched in 2015 by a young Canadian prodigy by the name of Vitalik Buterin. This passionate computer scientist saw the opportunity that Bitcoin had created and wanted to contribute to the building by creating a similar but improved Bitcoin ecosystem.
He thus created Ethereum which came to solve a major problem of Bitcoin: the verification time of a block. This is one of the main differences with its predecessor, whose block generation time is almost 10 min, whereas Vitalik’s new algorithm does it in 10 seconds.
Ethereum is a real ecosystem whose token is ether ($ETH). The goal of its designer was to bring improvements to Bitcoin while bringing new possibilities.
He also invented smart contracts. The principle of a smart contract is that it is a contract drawn up with conditions and which is carried out on its own when the conditions are met.
The Ethereum blockchain, thanks to smart contracts, has notably enabled the birth of DeFi (decentralized finance) and therefore, dApps (decentralized applications, often DeFi-oriented).
What Is Ethereum 2.0?
Ethereum 2.0, now fully operational, introduced the Proof of Stake (PoS) mechanism, tackling the longtime challenges of slow transaction speeds and high fees on the Ethereum network.
By removing the need for costly mining equipment, users can now secure the network through staking. This transition, which began in December 2020, resulted in a more efficient and energy-saving platform, cementing Ethereum’s status as a frontrunner in blockchain solutions.
How the Ethereum Blockchain Works and the Proof of Stake (PoS) Era
Originally, the Ethereum blockchain ran on Proof of Work (the same mechanism that powers Bitcoin). Today, Ethereum relies on Proof of Stake (PoS), creating a more sustainable and scalable framework for verifying and validating blocks.
Ethereum’s blockchain, now powered by Ethereum 2.0, underwent a fundamental overhaul by moving to the Proof of Stake (PoS) consensus mechanism following “The Merge” in September 2022. This drastic shift eliminated the need for energy-intensive mining, which had previously secured the network and validated transactions.
The New Security Architecture
With Ethereum 2.0, the blockchain is safeguarded by a network of validators who actively participate in the consensus process by staking their ETH rather than mining it. This approach not only fortifies the network but also paves the way for greater scalability and faster transactions, thanks to improved energy efficiency.
Solidity and Smart Contracts
Solidity remains the go-to programming language for building smart contracts on Ethereum. These decentralized, self-executing contracts continue to drive the rise of dApps, DeFi, NFTs, and the transfer of ERC-20 tokens, providing users around the world with trustless and intermediary-free solutions.
The Merge and Its Implications
“The Merge” signaled the end of traditional ETH mining. Validators are now rewarded for their staking activity instead of mining, resulting in a more eco-friendly and secure network. The reward for validating a block of transactions no longer depends on finding a winning hash, but on making an active and engaged contribution to the blockchain.
The Future of Transactions on Ethereum
In this new era, creating a smart contract to automate the sending of Ether remains a key feature, enabling a wide range of secure and automated financial or contractual operations. Ethereum 2.0 has not only preserved the strengths of the original version, but also amplified them, promising a future where Ethereum continues to lead blockchain innovation.
It is entirely possible to set up a smart contract on Ethereum’s blockchain to automatically transfer a defined amount of Ether from one wallet to another at a predetermined date. These smart contracts underpin decentralized applications, DeFi, NFTs, ERC-20 token transfers, and more.
The Arrival of Proof of Stake (PoS)
By adopting Proof of Stake, the blockchain has embraced a more environmentally friendly approach compared to Proof of Work (PoW). This transition demands token ownership to participate in validating transactions, whereas PoW allowed broader entry without requiring token holdings. PoS aims to bolster the network’s efficiency and security while significantly reducing its carbon footprint.
The Evolution of Ethereum (ETH) Price
Since entering the market, Ethereum (ETH) has seen a remarkable price journey, reflecting both the volatility and promise of cryptocurrencies. Starting at an average price of $1, ETH rocketed up by more than 106,563%, now hovering around $3,026.
ETH Price Evolution Over Time
The year 2021 proved especially memorable, with ETH hitting its all-time high (ATH) of $4,862. However, 2022 brought challenges as Ethereum—like many other cryptos—faced a “crypto winter,” dropping to roughly $889.
A significant turning point arrived in 2023 when the U.S. SEC approved Bitcoin Spot ETFs, clearing the way for rapid approval of Ethereum Spot ETFs. This development reignited investor confidence, driving ETH’s price above the $3,000 threshold.
This renewed enthusiasm underscores Ethereum’s resilience and its appeal as a strategic investment for 2024, especially in a bullish market environment.
Performance, Challenges, and Growing Competition in 2024
In 2024, Ethereum (ETH) showcased notable performance, peaking at $4,092 in March and $3,320 in November—representing a 45% increase since the start of the year. Yet, ETH remains 38.15% below its previous high of $4,800 from November 2021.
Ethereum (ETH), November 2024
The election of Donald Trump sent ripples through the crypto market, with optimism around favorable regulation resulting in record inflows into Ethereum ETFs—over $215 million in just three days. This trend further solidified Ethereum’s market standing.
Despite these gains, Ethereum faces mounting competition. Solana (SOL) stands out for its speed and efficiency, attracting investor attention. Meanwhile, Sui (SUI) has emerged as a formidable contender, recently outperforming both Solana and Ethereum in net flows—evidence of its growing influence.
These developments highlight the need for Ethereum to keep innovating in order to preserve its leadership in the blockchain space.
Ethereum Price Predictions for the Coming Years
According to various analyses, Ethereum is set for a bullish trajectory over the next few years. By 2024, forecasts suggest the price could hover around $4,000, with notable upside potential driven by ongoing technical upgrades and the growing adoption of DeFi.
Looking ahead to 2025, projections indicate that ETH might reach $10,000, reflecting the positive impact of continuous innovation and widespread market acceptance. Over the longer term, by 2030, Ethereum’s price could climb as high as $170,000, signaling robust growth fueled by the evolution of Ethereum 2.0 and an expanding range of real-world applications.
Ethereum (ETH) : Should You Buy in 2025 ?
With its transition to Ethereum 2.0 and the move to Proof of Stake (PoS), the network’s future appears promising. This upgrade targets issues around scalability and high fees, potentially making Ethereum more efficient and eco-friendly.
Meanwhile, decentralized applications (dApps), decentralized finance (DeFi), and NFTs continue to thrive on the Ethereum platform, underscoring its growing significance in the blockchain ecosystem.
From a price standpoint, ETH surpassed $3,000 and hit a peak of $4,092 in March 2024. It’s now well-positioned to break past its next major resistance at $4,100. The recent approval of Ethereum spot ETFs has further bolstered investor confidence, pushing prices upward.
Many see Ethereum as a compelling long-term investment, thanks in part to attractive staking opportunities. However, it’s essential to remember that the cryptocurrency market is volatile and can be unpredictable. Before investing in ETH or any other crypto, conduct thorough research and never invest more than you can afford to lose.
⚠️ This article is published for informational purposes and should not be considered as investment advice. Crypto-currency trading involves risk and it is important not to invest more than you can afford to lose.
InvestX is not responsible for the quality of the products or services presented on this page and shall not be held liable, directly or indirectly, for any damage or loss caused as a result of using any goods or services highlighted in this article. Investments related to crypto-assets are risky by nature, readers should do their own research before taking any action and only invest within the limits of their financial capabilities. This article does not constitute investment advice.
Web editor for many years and SEO specialist, Thomas became an editor for InvestX when the site was launched. Passionate about the field of crypto and Web3, Thomas has made it his mission to deliver maximum value and introduce readers to the world of blockchains, considered for him as the world of tomorrow.
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