What is Ethereum and Why Is It Important?
Before Ethereum and the rise of decentralized technologies, the internet was (and largely still is) dominated by massive tech companies. If you wanted to build an app, store data, or process payments, you pretty much had to go through gatekeepers like Apple, Amazon, Google, or PayPal.
These companies control the servers, the platforms, and often the rules. If they decide to change the terms, censor content, or shut down access, there’s not much you can do about it.
If you wanted to launch on mobile, you had two choices: Apple’s App Store or Google Play, and both took hefty cuts, sometimes up to 30% of your revenue. Want to update your app? Pay the fee, follow their guidelines, and hope you don’t get rejected.
Worst of all, they hold the power to pull your app from the store at any time, sometimes without warning or clear justification. Your business, your users, gone with a single click.
Ethereum flips that script. Apps (or dApps, decentralized applications) run on a global network instead of a single company’s servers. There’s no middleman demanding a cut, no app store approval process, and no CEO who can decide your app is too controversial or unprofitable.
Once deployed, it’s live, unstoppable, uncensorable, and entirely in your control.
That’s kind of the idea of Ethereum and why it’s important, not only as a cryptocurrency, but as a movement.
🔎 This guide dives deep into Ethereum’s role as the backbone of Web3, exploring how it’s reshaping everything from finance to digital ownership, some of the biggest players in the Ethereum ecosystem, Ethereum’s most notable upgrades and price impacts, and why it’s worth watching.
What actually is Ethereum?
Ethereum is a blockchain-based platform that lets developers build decentralized applications, create smart contracts, and program money itself.
Created by Vitalik Buterin and launched in 2015, Ethereum has become the infrastructure for everything from decentralized finance (DeFi) and NFTs to supply chain solutions and metaverse economies.
But what is Ethereum, really, without all the buzzwords and jargon?
Here’s the elevator pitch: Ethereum is like a decentralized supercomputer fueled by a cryptocurrency called Ether ($ETH).
While Bitcoin is great at being digital gold, Ethereum is designed to be flexible, programmable, and open-ended. It’s basically a sandbox for developers to build the future of the internet.
That’s the “what.” But once you peek under the hood and see how Ethereum is reshaping finance, ownership, social platforms, and identity, you realize this isn’t just a new app.
It’s a new system challenging the idea of who should be in control.
Why this matters for you:
✅ Ethereum is rewriting the digital rulebook. It flips the power structure, nuking middlemen and lets you build or use entire financial systems, marketplaces, and apps, without Big Tech gatekeepers whispering in your code.
✅ Your money, your logic, your rules. Ethereum programs don’t “ask” banks or platforms for permission. With smart contracts, code enforces deals automatically, and you don’t need to trust anyone. Just trust the math.
✅ You’re not betting on an app. You’re betting on a new internet. Ethereum is the protocol layer where DeFi, NFTs, digital identity, and DAOs merge into something too big to ignore– Web3.
🤔 Scalability is still a game of whack-a-mole. Yes, Layer-2s help, but fees spike and UX breaks when things get busy. Ethereum may be the future, but it’s still hard to use today.
🤔 Betting on Ethereum means betting on open systems and open risks. No bank equals no bailout. If a contract fails or a project rugs, it’s on you. Transparency gives power, but it doesn’t give you a refund.
Let’s dig into how Ethereum operates.
The Ethereum Engine: How It Works
Ethereum is a blockchain platform, this much you’ve heard until the cows come home.
However, where Bitcoin is limited to transferring digital value peer-to-peer, Ethereum was built as a general-purpose framework for building software that needs consensus: ledgers, contracts, credentials, marketplaces, and more.
What sets Ethereum apart is its introduction of smart contracts. These self-executing lines of code run exactly as written once the conditions are met.
No middlemen. No banks. No lawsuits.
Here’s a basic example: Alice sends 10 $DAI (a stablecoin) to Bob, but only if Bob delivers a digital artwork before midnight. The Ethereum smart contract enforces the terms, so no trust is required. If Bob flakes, Alice’s funds remain untouched.
Cleaner than Venmo. Smarter than PayPal.
This is the Ethereum blockchain. It’s not just a record of money moving around, but a global decentralized computer running trustless applications. And instead of renting server time from Big Tech clouds, you pay “gas fees” in $ETH to use the network.
And the Ethereum Virtual Machine (EVM)? That’s the execution engine behind it all. Every node on the network runs these smart contracts in lockstep, verifying transactions and code with no central authority.
In tech-speak, it’s kind of like a Blockchain-as-a-Service, but completely open source. Anyone is welcome to use it and even launch their own token, provided you meet its token standards.
Why Ethereum Matters
The importance of Ethereum isn’t in what it is, but in what it enables.
We live in a time where platform monopolies define the rules. Ethereum is the antithesis of that, flipping the script from gatekeepers to protocol engineers.
It’s a shift from “what can I build on Facebook’s API?” to “what can I build outside anyone’s walled garden?” Here’s why Ethereum matters:
For starters, Ethereum powers a robust DeFi ecosystem– basically a system where people borrow, lend, trade, and earn interest without involving banks. Projects like Aave, Uniswap, and MakerDAO all run on Ethereum.
It’s also the backbone of NFTs and digital collectibles, allowing artists to mint one-of-a-kind tokens and sell them globally with proof of ownership and real royalties.
It also underpins a suite of third-party decentralized identity and governance tools, meaning your logins, votes, and data don’t have to flow through Google anymore.
It supports the rise of decentralized autonomous organizations (DAOs), where communities vote on how to do things like allocate resources without CEOs or traditional hierarchies.
Ethereum isn’t just a blockchain, but rather a programmable operating system that reimagines trust, ownership, and public infrastructure.
Who Founded Ethereum?
Ethereum was created by Vitalik Buterin, a Canadian programmer born in Moscow, Russia. Buterin first made waves in the crypto space with his work on Bitcoin Magazine in 2011, but he saw limitations in Bitcoin’s design.
In 2013, at 19 years old, he proposed Ethereum as a platform that could do more than just move money; it could run decentralized applications through smart contracts.
Ethereum was also co-founded by a team that included Gavin Wood, Joseph Lubin, Anthony Di Iorio, Charles Hoskinson, and Mihai Alisie.
While Buterin drafted the original whitepaper in 2013, Gavin Wood wrote the Ethereum Yellow Paper, essentially defining the technical specs for the Ethereum Virtual Machine.
Joseph Lubin later founded ConsenSys, a major Ethereum-focused software company, while Charles Hoskinson went on to create Cardano.
To bring his vision to life, Buterin received a Thiel Fellowship, granting him $100,000 to work on Ethereum full-time. He then co-founded the Ethereum Foundation, a non-profit dedicated to building and promoting Ethereum’s open-source ecosystem.
In early 2014, the Foundation launched one of crypto’s first major crowdsales, raising $18 million and distributing 72 million $ETH, kickstarting the project’s development. Fast forward to today, that same 72 million ETH is worth around $144 billion,
The Foundation also helped launch the Enterprise Ethereum Alliance (EEA), a global community of businesses and developers dedicated to integrating Ethereum into real-world applications.
Ethereum vs Bitcoin
Most newcomers lump Ethereum in with Bitcoin, and we can’t blame you– digital coins, blockchains, techy founders (except Vitalik is very much alive and wearing unicorn shirts)– but the differences are fundamental.
Bitcoin is optimized to be immutable and scarce, like digital gold. It doesn’t aim to do much beyond that, and to be fair, it’s already a massive mission.
Ethereum was born from frustration with Bitcoin’s rigidity. Vitalik wrote the Ethereum whitepaper after realizing Bitcoin wouldn’t evolve into a broader programming platform.
Ethereum is designed to be flexible, upgradeable, and expressive; essentially a “world computer,” albeit one that’s still learning to scale.
Want to build an entire lending protocol, an in-game item marketplace, or a decentralized Instagram? Use Ethereum, not Bitcoin. When it comes to building products, Bitcoin is a calculator, whereas Ethereum is more like a laptop, if that makes sense.
And compared to newer layer 1s like Solana or Avalanche? Ethereum typically lags in transaction speed but dominates in adoption, security, and developer tooling. It’s not the fastest ship, but it’s the most battle-tested.
Ethereum Use Cases Are Already Everywhere
There are plenty of Ethereum use cases and functional business models in the wild.
DeFi platforms let you pool assets, earn yields, and access financial products 24/7, even with just a smartphone.
For example, Aave ($AAVE) is a leading DeFi platform on Ethereum that allows users to lend and borrow cryptocurrencies, earning interest through algorithmically adjusted rates based on supply and demand.
Its liquidity pools contribute to Ethereum’s multi-billion-dollar DeFi ecosystem, with over $12 billion in Total Value Locked (TVL) as of 2025.
While its yields are competitive, profitability is influenced by factors like gas fees, impermanent loss for liquidity providers, and overall market volatility.
The protocol itself makes about $66.55m annually.
Other examples in the Ethereum ecosystem include NFT marketplaces like OpenSea, which let creators tokenize everything from digital art to virtual land.
Blockchain-based games like Axie Infinity or Decentraland give players economic agency and tradable in-game assets.
Global supply chains even use Ethereum-based systems to trace farm-to-store transactions.
Identity systems like ENS (Ethereum Name Service) help map wallet addresses to human-readable usernames—yourname.eth is your Web3 passport.
This isn’t vaporware. Billions of dollars flow through Ethereum-based apps every day.
The Future: Ethereum 2.0 and Beyond
Ethereum’s biggest challenge has been scalability. Its early design, every node executing every transaction, brought decentralization and bottlenecks.
Enter Ethereum 2.0.
In September 2022, Ethereum shifted from Proof of Work to Proof of Stake, an energy-efficient consensus mechanism that cut its energy use by over 99.9%. This “Merge” was a massive technical feat, akin to swapping jet engines during a transatlantic flight.
The upgrade didn’t immediately make Ethereum faster or cheaper. But it laid the foundation for “sharding” and Layer-2 scaling solutions, which are like separate lanes of traffic (like Arbitrum, Optimism) that make Ethereum apps faster without sacrificing security.
Prior to The Merge, Ethereum’s annual energy consumption was estimated to be around 78 TWh, comparable to mid-sized countries like Austria or major industries. Post-Merge, that figure fell to roughly 0.01 TWh per year, which is indeed less than the energy required to power a single Tesla Supercharger station.
A Timeline of Notable Ethereum Upgrades
Ethereum has gone through a series of transformative upgrades, each designed to enhance its scalability, security, and sustainability. Below is a streamlined look at the most significant milestones in Ethereum’s evolution:
🏗️ Frontier (July 2015): Initial launch of the Ethereum mainnet.
🔓 Homestead (March 2016): First major update, focused on network stability and protocol enhancements.
🔄 Metropolis (Byzantium and Constantinople) (2017–2019): Privacy improvements, smart contract efficiency, and reduced gas costs.
🌉 Istanbul (December 2019): Improved interoperability with privacy coins and optimized gas costs.
🌐 Beacon Chain (December 2020): Introduction of Ethereum’s Proof-of-Stake (PoS) chain, running parallel to the mainnet.
🔥 London Hard Fork (EIP-1559) (August 2021): Implemented a burn mechanism for transaction fees, reducing ETH supply.
🛡️ Altair (October 2021): Upgraded Beacon Chain, introducing validator incentives and slashing mechanisms.
⚡ The Merge (September 2022): Transition from Proof-of-Work (PoW) to Proof-of-Stake (PoS), drastically cutting energy consumption.
💰 Shanghai/Capella (Shapella) (April 2023): Enabled ETH withdrawals from staking for the first time.
🚀 Cancun-Deneb (May 2025): This upgrade introduces Proto-Danksharding (EIP-4844) to improve scalability and reduce layer-2 transaction costs.
Ethereum’s Biggest Price Impacts from Past Upgrades
Of these major upgrades, The Merge (September 2022), London Hard Fork (August 2021), and the Beacon Chain Launch (December 2020) were notably followed by sharp increases in $ETH’s price.
The Merge saw Ethereum’s energy consumption plummet by 99.9%, contributing to a nearly 70% price surge in the months leading up to it.
The London Hard Fork introduced the EIP-1559 burn mechanism, which sparked a 40% rally within two weeks, as the market responded to Ethereum’s newfound deflationary characteristics.
Similarly, the Beacon Chain Launch, the foundation of Ethereum’s Proof-of-Stake model, preceded a tripling of $ETH’s value over the next six months.
However, it’s worth noting that each of these upgrades also coincided with broader bullish market conditions.
The Beacon Chain Launch rode the tailwinds of DeFi Summer, London Hard Fork happened amidst the NFT boom, and The Merge came as optimism returned post-crypto winter.
While the timing of these upgrades certainly aligned with price rallies, it’s a classic case of correlation, not causation; however, the bull market may have amplified their impact.
Proto-Danksharding (EIP-4844): What You Need to Know about Ethereum’s Newest Upgrade
Proto-Danksharding, rolling out in the much-hyped Cancun-Deneb upgrade, is Ethereum’s latest attempt to put traffic jams in the rearview mirror.
If Ethereum’s blockchain was a highway, Proto-Danksharding is like adding a fleet of autonomous data trucks that zip down their own private lanes, cutting congestion without needing to widen the road.
Unlike traditional sharding, which slices the blockchain into smaller, independently processed pieces, Proto-Danksharding is hyper-focused on supercharging data availability for rollups. These layer-2 solutions are Ethereum’s version of carpool lanes, bundling transactions for faster, cheaper rides.
The real magic? Blobs. Yeah, you read that right. Ethereum’s newest weapon against network clutter is literally called “blobs,” and they do exactly what it sounds like: glom chunks of transaction data onto Ethereum blocks without cramming up mainnet storage.
Think of blobs as the blockchain’s external hard drive, data is there when you need it, but it’s not eating up precious space.
Early estimates suggest this could slash layer-2 transaction fees by up to 90%, which is basically like upgrading from dial-up to fiber optics for your DeFi transactions.
Final Thoughts + Why Ethereum Is Important For You
Ethereum is more than just a coin, investment, or some nerd poetry encoded on-chain. It’s a programmable layer of trust for the digital world. It’s infrastructure. It’s a sandbox. It’s where innovation and finance merged and forgot they were supposed to raise venture capital first.
If you’re an investor, entrepreneur, gamer, developer, or just someone who reads the fine print, understanding Ethereum is understanding a key part of blockchain history.
Because even if you’re not writing smart contracts or minting NFTs, the trends Ethereum rides (decentralization, digital identity, self-custody) are shaping how your data, money, and digital rights will be handled.
As a CEX that’s DeFi-aware, we see Ethereum as not a competitor, but rather the asset that deepens the meaning of what exchange, ownership, and interaction are online.
But Ethereum isn’t alone; innovation is sprawling across the blockchain landscape with projects like Solana ($SOL), Cardano ($ADA), and Avalanche ($AVAX) pushing the envelope on speed, scalability, and decentralized infrastructure.
Curious what comes next? Explore our deep dives on Smart Contracts, Ethereum vs. Solana, and What is DeFi? to get ahead of the curve and understand where blockchain is going.
Before Ethereum and the rise of decentralized technologies, the internet was (and largely still is) dominated by massive tech companies. If you wanted to build an app, store data, or process payments, you pretty much had to go through gatekeepers like Apple, Amazon, Google, or PayPal.
These companies control the servers, the platforms, and often the rules. If they decide to change the terms, censor content, or shut down access, there’s not much you can do about it.
If you wanted to launch on mobile, you had two choices: Apple’s App Store or Google Play, and both took hefty cuts, sometimes up to 30% of your revenue. Want to update your app? Pay the fee, follow their guidelines, and hope you don’t get rejected.
Worst of all, they hold the power to pull your app from the store at any time, sometimes without warning or clear justification. Your business, your users, gone with a single click.
Ethereum flips that script. Apps (or dApps, decentralized applications) run on a global network instead of a single company’s servers. There’s no middleman demanding a cut, no app store approval process, and no CEO who can decide your app is too controversial or unprofitable.
Once deployed, it’s live, unstoppable, uncensorable, and entirely in your control.
That’s kind of the idea of Ethereum and why it’s important, not only as a cryptocurrency, but as a movement.
🔎 This guide dives deep into Ethereum’s role as the backbone of Web3, exploring how it’s reshaping everything from finance to digital ownership, some of the biggest players in the Ethereum ecosystem, Ethereum’s most notable upgrades and price impacts, and why it’s worth watching.
What actually is Ethereum?
Ethereum is a blockchain-based platform that lets developers build decentralized applications, create smart contracts, and program money itself.
Created by Vitalik Buterin and launched in 2015, Ethereum has become the infrastructure for everything from decentralized finance (DeFi) and NFTs to supply chain solutions and metaverse economies.
But what is Ethereum, really, without all the buzzwords and jargon?
Here’s the elevator pitch: Ethereum is like a decentralized supercomputer fueled by a cryptocurrency called Ether ($ETH).
While Bitcoin is great at being digital gold, Ethereum is designed to be flexible, programmable, and open-ended. It’s basically a sandbox for developers to build the future of the internet.
That’s the “what.” But once you peek under the hood and see how Ethereum is reshaping finance, ownership, social platforms, and identity, you realize this isn’t just a new app.
It’s a new system challenging the idea of who should be in control.
Why this matters for you:
✅ Ethereum is rewriting the digital rulebook. It flips the power structure, nuking middlemen and lets you build or use entire financial systems, marketplaces, and apps, without Big Tech gatekeepers whispering in your code.
✅ Your money, your logic, your rules. Ethereum programs don’t “ask” banks or platforms for permission. With smart contracts, code enforces deals automatically, and you don’t need to trust anyone. Just trust the math.
✅ You’re not betting on an app. You’re betting on a new internet. Ethereum is the protocol layer where DeFi, NFTs, digital identity, and DAOs merge into something too big to ignore– Web3.
🤔 Scalability is still a game of whack-a-mole. Yes, Layer-2s help, but fees spike and UX breaks when things get busy. Ethereum may be the future, but it’s still hard to use today.
🤔 Betting on Ethereum means betting on open systems and open risks. No bank equals no bailout. If a contract fails or a project rugs, it’s on you. Transparency gives power, but it doesn’t give you a refund.
Let’s dig into how Ethereum operates.
The Ethereum Engine: How It Works
Ethereum is a blockchain platform, this much you’ve heard until the cows come home.
However, where Bitcoin is limited to transferring digital value peer-to-peer, Ethereum was built as a general-purpose framework for building software that needs consensus: ledgers, contracts, credentials, marketplaces, and more.
What sets Ethereum apart is its introduction of smart contracts. These self-executing lines of code run exactly as written once the conditions are met.
No middlemen. No banks. No lawsuits.
Here’s a basic example: Alice sends 10 $DAI (a stablecoin) to Bob, but only if Bob delivers a digital artwork before midnight. The Ethereum smart contract enforces the terms, so no trust is required. If Bob flakes, Alice’s funds remain untouched.
Cleaner than Venmo. Smarter than PayPal.
This is the Ethereum blockchain. It’s not just a record of money moving around, but a global decentralized computer running trustless applications. And instead of renting server time from Big Tech clouds, you pay “gas fees” in $ETH to use the network.
And the Ethereum Virtual Machine (EVM)? That’s the execution engine behind it all. Every node on the network runs these smart contracts in lockstep, verifying transactions and code with no central authority.
In tech-speak, it’s kind of like a Blockchain-as-a-Service, but completely open source. Anyone is welcome to use it and even launch their own token, provided you meet its token standards.
Why Ethereum Matters
The importance of Ethereum isn’t in what it is, but in what it enables.
We live in a time where platform monopolies define the rules. Ethereum is the antithesis of that, flipping the script from gatekeepers to protocol engineers.
It’s a shift from “what can I build on Facebook’s API?” to “what can I build outside anyone’s walled garden?” Here’s why Ethereum matters:
For starters, Ethereum powers a robust DeFi ecosystem– basically a system where people borrow, lend, trade, and earn interest without involving banks. Projects like Aave, Uniswap, and MakerDAO all run on Ethereum.
It’s also the backbone of NFTs and digital collectibles, allowing artists to mint one-of-a-kind tokens and sell them globally with proof of ownership and real royalties.
It also underpins a suite of third-party decentralized identity and governance tools, meaning your logins, votes, and data don’t have to flow through Google anymore.
It supports the rise of decentralized autonomous organizations (DAOs), where communities vote on how to do things like allocate resources without CEOs or traditional hierarchies.
Ethereum isn’t just a blockchain, but rather a programmable operating system that reimagines trust, ownership, and public infrastructure.
Who Founded Ethereum?
Ethereum was created by Vitalik Buterin, a Canadian programmer born in Moscow, Russia. Buterin first made waves in the crypto space with his work on Bitcoin Magazine in 2011, but he saw limitations in Bitcoin’s design.
In 2013, at 19 years old, he proposed Ethereum as a platform that could do more than just move money; it could run decentralized applications through smart contracts.
Ethereum was also co-founded by a team that included Gavin Wood, Joseph Lubin, Anthony Di Iorio, Charles Hoskinson, and Mihai Alisie.
While Buterin drafted the original whitepaper in 2013, Gavin Wood wrote the Ethereum Yellow Paper, essentially defining the technical specs for the Ethereum Virtual Machine.
Joseph Lubin later founded ConsenSys, a major Ethereum-focused software company, while Charles Hoskinson went on to create Cardano.
To bring his vision to life, Buterin received a Thiel Fellowship, granting him $100,000 to work on Ethereum full-time. He then co-founded the Ethereum Foundation, a non-profit dedicated to building and promoting Ethereum’s open-source ecosystem.
In early 2014, the Foundation launched one of crypto’s first major crowdsales, raising $18 million and distributing 72 million $ETH, kickstarting the project’s development. Fast forward to today, that same 72 million ETH is worth around $144 billion,
The Foundation also helped launch the Enterprise Ethereum Alliance (EEA), a global community of businesses and developers dedicated to integrating Ethereum into real-world applications.
Ethereum vs Bitcoin
Most newcomers lump Ethereum in with Bitcoin, and we can’t blame you– digital coins, blockchains, techy founders (except Vitalik is very much alive and wearing unicorn shirts)– but the differences are fundamental.
Bitcoin is optimized to be immutable and scarce, like digital gold. It doesn’t aim to do much beyond that, and to be fair, it’s already a massive mission.
Ethereum was born from frustration with Bitcoin’s rigidity. Vitalik wrote the Ethereum whitepaper after realizing Bitcoin wouldn’t evolve into a broader programming platform.
Ethereum is designed to be flexible, upgradeable, and expressive; essentially a “world computer,” albeit one that’s still learning to scale.
Want to build an entire lending protocol, an in-game item marketplace, or a decentralized Instagram? Use Ethereum, not Bitcoin. When it comes to building products, Bitcoin is a calculator, whereas Ethereum is more like a laptop, if that makes sense.
And compared to newer layer 1s like Solana or Avalanche? Ethereum typically lags in transaction speed but dominates in adoption, security, and developer tooling. It’s not the fastest ship, but it’s the most battle-tested.
Ethereum Use Cases Are Already Everywhere
There are plenty of Ethereum use cases and functional business models in the wild.
DeFi platforms let you pool assets, earn yields, and access financial products 24/7, even with just a smartphone.
For example, Aave ($AAVE) is a leading DeFi platform on Ethereum that allows users to lend and borrow cryptocurrencies, earning interest through algorithmically adjusted rates based on supply and demand.
Its liquidity pools contribute to Ethereum’s multi-billion-dollar DeFi ecosystem, with over $12 billion in Total Value Locked (TVL) as of 2025.
While its yields are competitive, profitability is influenced by factors like gas fees, impermanent loss for liquidity providers, and overall market volatility.
The protocol itself makes about $66.55m annually.
Other examples in the Ethereum ecosystem include NFT marketplaces like OpenSea, which let creators tokenize everything from digital art to virtual land.
Blockchain-based games like Axie Infinity or Decentraland give players economic agency and tradable in-game assets.
Global supply chains even use Ethereum-based systems to trace farm-to-store transactions.
Identity systems like ENS (Ethereum Name Service) help map wallet addresses to human-readable usernames—yourname.eth is your Web3 passport.
This isn’t vaporware. Billions of dollars flow through Ethereum-based apps every day.
The Future: Ethereum 2.0 and Beyond
Ethereum’s biggest challenge has been scalability. Its early design, every node executing every transaction, brought decentralization and bottlenecks.
Enter Ethereum 2.0.
In September 2022, Ethereum shifted from Proof of Work to Proof of Stake, an energy-efficient consensus mechanism that cut its energy use by over 99.9%. This “Merge” was a massive technical feat, akin to swapping jet engines during a transatlantic flight.
The upgrade didn’t immediately make Ethereum faster or cheaper. But it laid the foundation for “sharding” and Layer-2 scaling solutions, which are like separate lanes of traffic (like Arbitrum, Optimism) that make Ethereum apps faster without sacrificing security.
Prior to The Merge, Ethereum’s annual energy consumption was estimated to be around 78 TWh, comparable to mid-sized countries like Austria or major industries. Post-Merge, that figure fell to roughly 0.01 TWh per year, which is indeed less than the energy required to power a single Tesla Supercharger station.
A Timeline of Notable Ethereum Upgrades
Ethereum has gone through a series of transformative upgrades, each designed to enhance its scalability, security, and sustainability. Below is a streamlined look at the most significant milestones in Ethereum’s evolution:
🏗️ Frontier (July 2015): Initial launch of the Ethereum mainnet.
🔓 Homestead (March 2016): First major update, focused on network stability and protocol enhancements.
🔄 Metropolis (Byzantium and Constantinople) (2017–2019): Privacy improvements, smart contract efficiency, and reduced gas costs.
🌉 Istanbul (December 2019): Improved interoperability with privacy coins and optimized gas costs.
🌐 Beacon Chain (December 2020): Introduction of Ethereum’s Proof-of-Stake (PoS) chain, running parallel to the mainnet.
🔥 London Hard Fork (EIP-1559) (August 2021): Implemented a burn mechanism for transaction fees, reducing ETH supply.
🛡️ Altair (October 2021): Upgraded Beacon Chain, introducing validator incentives and slashing mechanisms.
⚡ The Merge (September 2022): Transition from Proof-of-Work (PoW) to Proof-of-Stake (PoS), drastically cutting energy consumption.
💰 Shanghai/Capella (Shapella) (April 2023): Enabled ETH withdrawals from staking for the first time.
🚀 Cancun-Deneb (May 2025): This upgrade introduces Proto-Danksharding (EIP-4844) to improve scalability and reduce layer-2 transaction costs.
Ethereum’s Biggest Price Impacts from Past Upgrades
Of these major upgrades, The Merge (September 2022), London Hard Fork (August 2021), and the Beacon Chain Launch (December 2020) were notably followed by sharp increases in $ETH’s price.
The Merge saw Ethereum’s energy consumption plummet by 99.9%, contributing to a nearly 70% price surge in the months leading up to it.
The London Hard Fork introduced the EIP-1559 burn mechanism, which sparked a 40% rally within two weeks, as the market responded to Ethereum’s newfound deflationary characteristics.
Similarly, the Beacon Chain Launch, the foundation of Ethereum’s Proof-of-Stake model, preceded a tripling of $ETH’s value over the next six months.
However, it’s worth noting that each of these upgrades also coincided with broader bullish market conditions.
The Beacon Chain Launch rode the tailwinds of DeFi Summer, London Hard Fork happened amidst the NFT boom, and The Merge came as optimism returned post-crypto winter.
While the timing of these upgrades certainly aligned with price rallies, it’s a classic case of correlation, not causation; however, the bull market may have amplified their impact.
Proto-Danksharding (EIP-4844): What You Need to Know about Ethereum’s Newest Upgrade
Proto-Danksharding, rolling out in the much-hyped Cancun-Deneb upgrade, is Ethereum’s latest attempt to put traffic jams in the rearview mirror.
If Ethereum’s blockchain was a highway, Proto-Danksharding is like adding a fleet of autonomous data trucks that zip down their own private lanes, cutting congestion without needing to widen the road.
Unlike traditional sharding, which slices the blockchain into smaller, independently processed pieces, Proto-Danksharding is hyper-focused on supercharging data availability for rollups. These layer-2 solutions are Ethereum’s version of carpool lanes, bundling transactions for faster, cheaper rides.
The real magic? Blobs. Yeah, you read that right. Ethereum’s newest weapon against network clutter is literally called “blobs,” and they do exactly what it sounds like: glom chunks of transaction data onto Ethereum blocks without cramming up mainnet storage.
Think of blobs as the blockchain’s external hard drive, data is there when you need it, but it’s not eating up precious space.
Early estimates suggest this could slash layer-2 transaction fees by up to 90%, which is basically like upgrading from dial-up to fiber optics for your DeFi transactions.
Final Thoughts + Why Ethereum Is Important For You
Ethereum is more than just a coin, investment, or some nerd poetry encoded on-chain. It’s a programmable layer of trust for the digital world. It’s infrastructure. It’s a sandbox. It’s where innovation and finance merged and forgot they were supposed to raise venture capital first.
If you’re an investor, entrepreneur, gamer, developer, or just someone who reads the fine print, understanding Ethereum is understanding a key part of blockchain history.
Because even if you’re not writing smart contracts or minting NFTs, the trends Ethereum rides (decentralization, digital identity, self-custody) are shaping how your data, money, and digital rights will be handled.
As a CEX that’s DeFi-aware, we see Ethereum as not a competitor, but rather the asset that deepens the meaning of what exchange, ownership, and interaction are online.
But Ethereum isn’t alone; innovation is sprawling across the blockchain landscape with projects like Solana ($SOL), Cardano ($ADA), and Avalanche ($AVAX) pushing the envelope on speed, scalability, and decentralized infrastructure.
Curious what comes next? Explore our deep dives on Smart Contracts, Ethereum vs. Solana, and What is DeFi? to get ahead of the curve and understand where blockchain is going.