What is Ethereum?

How Does Ethereum Work?  

Ethereum runs on a global network of computers that validate and execute code on its blockchain. This allows for programmable, tamper-proof contracts known as smart contracts, enabling an entire ecosystem of applications from decentralized finance (DeFi) to NFTs.

Ethereum originally used a Proof-of-Work system similar to Bitcoin for mining, but transitioned in 2022 to Proof-of-Stake with an upgrade called The Merge. This change dramatically reduced energy consumption and altered how new ETH is issued.

As of 2025, approximately 120 million ETH are in circulation. Unlike Bitcoin’s fixed supply, Ethereum’s total supply is not capped, but it has introduced mechanisms that burn some ETH transaction fees, offsetting issuance and potentially leading to deflationary periods depending on network activity.

Ethereum Performance and Price  

Ethereum’s price started very low in 2015 but experienced significant growth as the platform gained adoption. It hit major highs above $4,000 in 2021 during a broad crypto market rally. After volatility and market adjustments, ETH has remained one of the top cryptocurrencies by market cap and usage.

Major Holders of Ethereum  

Ether is held by a mix of individual investors, institutional funds, cryptocurrency exchanges, and staking contracts. Some notable holders include Ethereum co-founder Vitalik Buterin, who owns around 240,000 ETH, and large exchange wallets like Bitfinex holding millions. Additionally, substantial amounts of ETH are staked to secure the network, with staking contracts holding over 66 million ETH.

Future Price Forecasts  

- Analysts predict Ethereum’s price in 2025 could range between $2,000 and $7,000 depending on market dynamics and adoption.

- Long-term forecasts through 2030 expect ETH could reach between $20,000 and $70,000, driven by growing use of dApps, DeFi, and NFT platforms, alongside network upgrades.

- These forecasts remain subject to volatility, regulatory changes, and technological development.

How Ethereum is Used  

Ethereum supports decentralized applications for finance, gaming, art, and more through smart contracts. People use ETH to pay for computational work on the network, investments, and as collateral in DeFi systems.

Why Consider Buying Ethereum?  

Ethereum offers exposure to a dynamic and programmable blockchain ecosystem that extends beyond currency. Its ongoing upgrades aim to improve scalability and reduce energy use, positioning it for future growth in blockchain applications and mainstream adoption.