CHAPTER 2

Ethereum

“In order to have a decentralised database, you need to have

security. In order to have security, you need to have

incentives”

— Vitalik Buterin

Founded: 2015

Native token: ETH

Market Capitalization: $355.8B

In this chapter, we will cover Ethereum, the first programmable

Blockchain platform that inspired the whole concept of Altcoins and

many more Blockchains and DLTs of today.

Introduced in a whitepaper in 2009, Bitcoin started trading in 2010

and immediately attracted global attention. It’s worthy to note that,

back in 2009, when Bitcoin was introduced, the word Blockchain

itself was not coined. It took some time for the industry to

comprehend the power of the underlying technology in order to

transform it to a programmable platform. In 2015, a young

programmer, Vitalik Buterin launched Ethereum as the first

programmable permissionless Blockchain than runs on a virtual

machine called “Ethereum Virtual Machine” or EVM. The whole EVM

network is considered as a single, canonical computer whose state

is accepted by all the nodes on the Ethereum network.

2.1 Consensus Model

When launched in 2015, Ethereum too had an underlying proof-of-

work consensus model, just like Bitcoin; however, it was a bit faster

than its predecessor. Ethereum blocks were validated and committed

to the Blockchain network in nearly every 12 seconds, whereas a

Bitcoin approximately took 10 minutes. Also, unlike Bitcoin that has a