Origins and Concept
Vitalik Buterin's vision: In late 2013, Vitalik Buterin, a young programmer and co-founder of Bitcoin Magazine, conceived of Ethereum. He envisioned a platform that would go beyond the financial applications of bitcoin, allowing developers to build decentralised applications (dApps) using smart contracts.
White paper: In late 2013, Vitalik published a white paper outlining the idea of Ethereum. The proposal was for a new blockchain with a full-fledged Turing-complete programming language, allowing anyone to write smart contracts and decentralised applications.
Team formation: In early 2014, Vitalik Buterin co-founded Ethereum with Mihai Alisie, Anthony Di Iorio and Charles Hoskinson. They were later joined by other key figures such as Gavin Wood and Joseph Lubin.
Development and launch
Crowdsale: To fund the development of Ethereum, the team conducted an initial coin offering (ICO) in July-August 2014, raising over $18 million, one of the largest crowdfunding projects at the time.
Development Milestones: Frontier (July 2015): The first release of the Ethereum network, allowing developers to start building dApps. Homestead (March 2016): The first major production release, providing a more stable and secure network. Metropolis (Byzantium and Constantinople, 2017-2019): Introduces significant improvements to the Ethereum protocol, including enhanced privacy and security features.
The DAO incident and hard fork
The DAO: In 2016, a decentralised autonomous organisation (DAO) built on Ethereum raised $150 million. However, a vulnerability in the DAO's code was exploited, resulting in the theft of $50 million worth of Ether.
Hard Fork: To recover the stolen funds, the Ethereum community decided to implement a hard fork, creating two separate blockchains: Ethereum (ETH) and Ethereum Classic (ETC). Ethereum continued on the new chain, while Ethereum Classic maintained the original blockchain without undoing the hack.
Evolution and progress
Scaling challenges: Ethereum faced scalability issues as it grew in popularity. The network's limited transaction throughput led to high fees and slow processing times during periods of high demand.
Ethereum 2.0: To address these issues, Ethereum is undergoing a major upgrade known as Ethereum 2.0 (Eth2 or Serenity). Key features include
Proof of Stake (PoS): Transition from Proof of Work (PoW) to PoS to improve energy efficiency and security.
Shard Chains: Introduction of shard chains to increase transaction throughput by dividing the network into smaller, interconnected chains.
Beacon Chain: The PoS consensus layer, to be introduced in December 2020 as the first phase of Ethereum 2.0.
Impact and ecosystem.
DeFi and dApps: Ethereum's smart contract capabilities have led to an explosion of decentralised finance (DeFi) and decentralised applications. Platforms such as Uniswap, MakerDAO and Compound have revolutionised financial services.
NFTs: Ethereum has also catalysed the growth of non-fungible tokens (NFTs), enabling the creation, ownership and trading of unique digital assets on platforms like OpenSea and Rarible.
Enterprise adoption: Major companies and institutions have adopted Ethereum for various use cases. The Ethereum Enterprise Alliance (EEA) includes members such as Microsoft, JPMorgan and Intel, which are working on private and consortium blockchain solutions.
Conclusion
Ethereum has fundamentally changed the blockchain space, providing a versatile platform for innovation. Its journey from Vitalik Buterin's vision to a global decentralised platform demonstrates the potential of blockchain technology beyond cryptocurrencies. With ongoing developments such as Ethereum 2.0, the future looks bright for this pioneering project.
