For example, a smart contract could be set up to automatically initiate a purchase once a cryptocurrency hits a certain price. For some, the fact that smart contracts can’t be altered once put on the blockchain and that they operate based on code instead of being manually performed by an individual or institution are benefits of the system.

Ethereum launched on July 30, 2015, as “Frontier” after raising $18 million in an initial coin offering (ICO) the year prior. The release followed a period when ethereum encouraged users to stress-test the blockchain by offering a prize of 25,000 ether.

In 2016, ethereum network participants attacked a decentralized autonomous organization, or DAO, which had raised ether through crowdfunding. The users targeted a vulnerability in DAO’s smart contracts and stole over $50 million worth of ether.

To reverse the attack, ethereum created a controversial “hard fork,” in which they rolled back the blockchain’s history to before the theft. While most adopted this new blockchain, some refused and stuck with what is now known as Ethereum Classic.

Since then, ethereum has continued rolling out updates, including a series known as “The Merge” conducted in 2022. With it, ethereum switched from using proof-of-work for blockchain consensus to proof-of-stake, separating it from peers like bitcoin.

Proof-of-work blockchains function through the work of “miners,” or specialized computers that contribute computational power to validate transactions using cryptography. Miners are rewarded with newly issued cryptocurrency for the amount of computing power they contribute to verifying transactions.

Under the proof-of-stake system, however, security comes from users locking a certain amount of the cryptocurrency they own into a smart contract as collateral before they can be selected to add new blocks of validated transactions to the blockchain.

According to the Ethereum Foundation, this switch alone cut the platform’s energy consumption by 99.5%, and co-founder Vitalik Buterin claimed that it would reduce the world’s energy consumption by 0.2%.

“With climate concerns and ESG-investing remaining a major topic for institutional investors, ethereum’s drastic energy reduction could open doors for additional capital flows and longer-term sustainability,” Tom Dunleavy, a senior research analyst with Messari, told Yahoo Finance.

Since its launch, ethereum has drawn attention from investors and organizations alike.

Visa (V) began settling transactions using the USD Coin (USDC-USD) stablecoin on the ethereum blockchain in 2021.

“The announcement today marks a major milestone in our ability to address the needs of fintechs managing their business in a stablecoin or cryptocurrency,” Visa chief product officer Jack Forestell said. “It’s really an extension of what we do every day, securely facilitating payments in all different currencies all across the world.”

More recently, with stablecoin legislation passing this June, Wall Street executives, including JPMorgan Chase (JPM) CEO Jamie Dimon and Citigroup (C) CEO Jane Fraser, have indicated interest in working with crypto assets.

Public figures have also joined the movement to adopt crypto. In February, Eric Trump posted to X, saying, “In my opinion, it’s a great time to add $ETH.”

His words reflect a presidential administration that has been supportive of cryptocurrency. President Trump’s Media & Technology Group filed to list an ETF that included ether, and the president celebrated the passage of the GENIUS Act on Truth Social.

“HAPPY CRYPTO WEEK!” Trump posted last week. “This is our moment — Digital Assets, GENIUS, Clarity!”

David Hollerith contributed to this post.

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Nina is a data reporting intern for Yahoo Finance.

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