On 15 September 2022, Ethereum transitioned its consensus mechanism from proof-of-work (PoW) to proof-of-stake (PoS) in an upgrade process known as "the Merge", which cut the blockchain's energy usage by 99%.

[10] Ethereum was initially described in late 2013 in a white paper by Vitalik Buterin,[4][11] a programmer and co-founder of Bitcoin Magazine, that described a way to build decentralized applications.

[15] In 2013, Buterin briefly worked with eToro CEO Yoni Assia on the Colored Coins project and drafted its white paper outlining additional use cases for blockchain technology.

[16] However, after failing to gain agreement on how the project should proceed, he proposed the development of a new platform with a more robust scripting language—a Turing-complete programming language[17]—that would eventually become Ethereum.

[18] During the conference, Gavin Wood, Charles Hoskinson, and Anthony Di Iorio (who financed the project) rented a house in Miami with Buterin at which they could develop a fuller sense of what Ethereum might become.

[20] Anthony Di Iorio wrote: "Ethereum was founded by Vitalik Buterin, Myself, Charles Hoskinson, Mihai Alisie & Amir Chetrit (the initial 5) in December 2013.

He stated, "I immediately realized that I liked it better than all of the other alternatives that I had seen; I suppose it was that [it] sounded nice and it had the word 'ether', referring to the hypothetical invisible medium that permeates the universe and allows light to travel.

Development was funded by an online public crowd sale from July to August 2014, in which participants bought the Ethereum value token (ether) with another digital currency, bitcoin.

[12] The Foundation funded multiple teams in different cities building three separate implementations of the protocol: Geth (Go), Pyethereum (Python), a C++ implementation, and also Swarm (decentralized file storage), Mist Browser (A wallet, browser and a user interface for smart contracts, now defunct) among other projects.

[citation needed] Since the initial launch, Ethereum has undergone a number of planned protocol upgrades, which are important changes affecting the underlying functionality and/or incentive structures of the platform.

[citation needed] In 2016, a decentralized autonomous organization called The DAO—a set of smart contracts developed on the platform—raised a record US$150 million in a crowd sale to fund the project.

[30][31] The event sparked a debate in the crypto-community about whether Ethereum should perform a contentious "hard fork" to reappropriate the affected funds.

[33] In March 2017, various blockchain startups, research groups, and Fortune 500 companies announced the creation of the Enterprise Ethereum Alliance (EEA) with 30 founding members.

[34] By May 2017, the nonprofit organization had 116 enterprise members, including ConsenSys, CME Group, Cornell University's research group, Toyota Research Institute, Samsung SDS, Microsoft, Intel, J. P. Morgan, Cooley LLP, Merck KGaA, DTCC, Deloitte, Accenture, Banco Santander, BNY Mellon, ING, and National Bank of Canada.

[38] In 2017, CryptoKitties, the blockchain game and decentralized application (dApp) featuring digital cat artwork as NFTs, was launched on the Ethereum network.

[39] In cultivating popularity with users and collectors, it gained notable mainstream media attention providing significant exposure to Ethereum in the process.

[42] In January 2018, a community-driven paper (an EIP, "Ethereum Improvement Proposal") under the leadership of civic hacker and lead author William Entriken was published, called ERC-721: Non-Fungible Token Standard.

[2][3] In 2019, Ethereum Foundation employee Virgil Griffith was arrested by the US government for presenting at a blockchain conference in North Korea.

[49] In April 2021, JP Morgan Chase, UBS, and MasterCard announced that they were investing US$65 million into ConsenSys, a software development firm that builds Ethereum-related infrastructure.

[52] The London upgrade included Ethereum Improvement Proposal ("EIP") 1559, a mechanism for reducing transaction fee volatility.

[55][non-primary source needed] The switch from proof-of-work to proof-of-stake on 15 September 2022 has cut Ethereum's energy usage by 99%.

According to the Ethereum protocol, the blockchain with the highest accumulated weight of attestations at any given time is to be regarded as the canonical chain.

[61] Ether (ETH) is the cryptocurrency generated in accordance with the Ethereum protocol as a reward to validators in a proof-of-stake system for adding blocks to the blockchain.

Ethereum addresses are composed of the prefix "0x" (a common identifier for hexadecimal) concatenated with the rightmost 20 bytes of the Keccak-256 hash of the ECDSA public key (the curve used is the so-called secp256k1).

[citation needed] One issue related to using smart contracts on a public blockchain is that bugs, including security holes, are visible to all but cannot be fixed quickly.

[70] Since tokens of this type are unique, they have been used to represent such things as collectibles, digital art, sports memorabilia, virtual real estate, and items within games.

[71] ERC-721 is the first official NFT standard for Ethereum and was followed up by ERC-1155 which introduced semi-fungibility, both are widely used,[72] though some fully fungible tokens using ERC-20 have been used for NFTs such as CryptoPunks.

[73] The first NFT project, Etheria, a 3D map of tradable and customizable hexagonal tiles, was deployed to the network in October 2015 and demonstrated live at DEVCON1 in November of that year.

[83] Interested parties have included Microsoft, IBM, JPMorgan Chase,[62] Deloitte, R3, and Innovate UK (cross-border payments prototype).

[85][86] Ethereum-based permissioned blockchain variants are used and being investigated for various projects: As of January 2016[update], the Ethereum protocol could process about 25 transactions per second; this did not change after the move to proof-of-stake.