Ethereum is about to celebrate its 10th anniversary next year (2025). It is one of the most popular blockchains after Bitcoin (BTC) and its native cryptocurrency, Ether (ETH), has a market capitalization of $410 billion, second only to Bitcoin.
In 2008, Satoshi Nakamoto released the Bitcoin whitepaper, marking the beginning of the blockchain era. Bitcoin was initially created as a new form of digital currency with the main functions of payment and accounting, so its design was relatively simple without many fancy features.
This led many developers to ponder how to expand the scope of blockchain applications, and Ethereum was born against this backdrop. Ethereum’s smart contract functionality has played a key role in establishing its current position in the blockchain world.
Smart contracts on Ethereum are like iOS/Android on smartphones, providing developers with tools and platforms to develop various types of applications. However, applications developed using Ethereum smart contracts are called decentralized applications (DApps). Financial applications such as DeFi and GameFi are all related to Ethereum, opening up more innovation and opportunities for the future of blockchain.
One of the most representative creators of Ethereum is Vitalik Buterin, a Russian-Canadian genius. He entered a gifted children’s class in primary school, where he studied mathematics, economics, and programming. At the age of 19, he published the Ethereum whitepaper and co-founded the Ethereum project with Gavin Wood, Charles Hoskinson, Anthony Di Iorio, and Joseph Lubin.
The goal of Ethereum is to establish an open and decentralized blockchain platform that allows developers to easily build and deploy smart contracts and decentralized applications (DApps).
Ethereum holds a unique position in the blockchain world, with the concept of smart contracts enabling developers to create a variety of decentralized applications (DApps). After a year of preparation, the Ethereum mainnet was officially launched on July 30, 2015. Since then, the Ethereum blockchain has been in operation, allowing users to trade Ether on the chain and develop various applications on Ethereum. This day is also considered Ethereum’s official “birthday.”
Over time, the Ethereum ecosystem has continued to grow. Developers have created various applications, and the largest decentralized exchange (DEX) Uniswap, NFTs, and games (GameFi) have emerged around Ethereum, bringing endless possibilities to the world.
According to data from Dune Analytics, the number of smart contracts on the Ethereum blockchain has exceeded 50 million, and there are 260 million wallet addresses on the chain. All these data show that Ethereum has an unshakable position in the blockchain and crypto community.
Looking ahead to the next decade, Vitalik Buterin believes that the next five years will be crucial for Ethereum, and there are three key points worth paying attention to.
First, Ethereum needs to be faster and cheaper. If the Web3 industry wants to connect with traditional industries or even replace existing services, it must provide excellent user experience and very low transaction fees to attract users. Currently, the Ethereum blockchain processes about 20-30 transactions per second, while Visa can handle approximately 1,700 transactions. The transaction fees on the Ethereum blockchain can even be higher than the price of purchasing NFTs during peak transaction periods. The slowness and high fees are the most criticized issues with Ethereum.
Vitalik Buterin stated that speed and user experience have always been lacking in Ethereum’s past, so the Ethereum team is constantly working on updates and upgrades to effectively solve the problems of high fees and slowness. He hopes that Ethereum can become a leading participant and occupy a place in the crypto market in the future. For example, the upcoming “Merge” upgrade in 2022 will officially transition Ethereum’s consensus mechanism from Proof of Work (PoW) to the more energy-efficient and efficient Proof of Stake (PoS), which will not only end the era of Ethereum mining but also slightly improve the transaction speed on the blockchain.
The Cancun upgrade this year also introduced a new type of transaction called “blob,” which significantly increases the amount of stored data and increases the data capacity per block in Layer2, thereby reducing transaction fees.
The second key point is the increased influence of non-financial applications. Vitalik Buterin believes that non-financial applications will begin to have a greater impact. Successful projects like Farcaster, his favorite decentralized social protocol, and Lens Protocol, a decentralized community platform, have effectively replaced social media platforms among crypto users. Decentralized community protocols allow users to connect directly with others without relying on centralized organizations like Meta or Google. Additionally, the decentralized and transparent nature of blockchain allows developers to access public data without authorization, making it easier to develop flexible and diverse clients, providing users with a richer social experience and choices.
The third key point is identity verification on the blockchain. Currently, identity verification is a major challenge in the blockchain world. Many projects distribute tokens and NFT airdrops as rewards to early participants, and users can take advantage of these free benefits by creating multiple accounts. If these projects succeed in the future, users can even make a significant profit. However, this approach lacks fairness, and traditional centralized verification methods are not the best solution, considering the abundance of blocked robot accounts on major platforms.
Decentralized identity-related technologies and applications are rapidly growing to address this issue. For example, the WorldCoin system scans users’ irises using the “Orb” iris scanner and generates a “World ID” as proof of identity. Gitcoin Passport uses 25 verification units, including Google, Facebook, LinkedIn, and online activity records, to provide an overall score to verify the authenticity of an individual’s blockchain identity.
Vitalik Buterin pointed out that these are important technological developments in the Ethereum ecosystem, and the future applications will continue to increase.
As Ethereum continues to thrive, many games and traditional financial industries are also entering the blockchain field and collaborating with Layer2 chains. As the current second-largest blockchain, many users hope that Ethereum will continue to achieve a more fair, transparent, and open world in various fields.
Proofread by: Gao Jingyuan