Ethereum is a decentralized, open-source blockchain system that features smart contract functionality. It was conceived in 2013 by programmer Vitalik Buterin @vitalik.eth and development began in early 2014 through a Swiss company, Ethereum Switzerland GmbH (EthSuisse).

Ethereum used a Proof of Work (PoW) consensus mechanism, similar to Bitcoin. However, it is transitioning to a Proof of Stake (PoS) mechanism through the Ethereum 2.0 upgrade. PoS aims to improve scalability, security, and energy efficiency.