Ethereum is a global, open-source platform for decentralized applications. Codes written in Ethereum control digital value, run exactly as programmed and are accessible anywhere in the world. In Part 1, we will take you through some interesting stories from Ethereum’s past. And show you where it is today.
Ethereum is one of the most well-known coins on the market. However, are you sure that you know everything about it? Check out our top facts.
The Birth of the altcoin
Vitalik Buterin learned about Bitcoin from his father in 2011. His dad used to run a small software startup. Buterin was 17 years old while Bitcoin was only 2. To sustain his passion, Buterin joined a bitcoin blog. He earned 5 BTC (about $3.50 at the time) per article. However, the website shut down soon due to a lack of mainstream readers.
Back then, Mihai Alisie, a Bitcoin enthusiast from Romania, contacted Buterin. In late 2011, they co-founded the Bitcoin Magazine and Buterin became the head writer. This magazine was one of the first serious crypto-centered outlets. Later on, BTC Media took over Bitcoin Magazine. Buterin continued to write until mid-2014.
In May of 2013, Buterin went to San Jose, California to attend a Bitcoin conference as a representative of the Bitcoin Magazine. Buterin was assured that BTC now has a big community and he was ready to join the movement.
Concurrently, Buterin soon realized that Bitcoin needed a scripting language for the development of an application. Failing to strike an agreement with the then Bitcoin community, he proposed the development of a new platform with a more general scripting language.
In 2013, Buterin released the Ethereum’s white paper. It documented a new open-source protocol for creating decentralized applications. Ethereum was officially announced on the Bitcointalk forum in 2014. In addition to Buterin, – Mihai Alisie, Anthony Di Iorio and Charles Hoskinson were the other co-founders. Dr. Gavin Wood and Joseph Lubin joined soon. Wood soon released the Ethereum yellow paper, which covered the Ethereum Virtual Machine (EVM), the runtime environment that executes all of the smart contracts on the network.
Ethereum was a crowdfunded project.
In 2014, Vitalik Buterin and the other co-founders of Ethereum launched a crowdsourcing campaign where they sold Ether tokens to the participants. Ether was purchasable directly through Ehereum’s website and also through a Python-based tool.
The initial discounted price of Ether was 2000 ETH per BTC. This continued for the first 14 days before linearly declining to a final rate of 1337 ETH per BTC. The sale had lasted for 42 days, concluding at 23:59 Zug time on September 2, 2014.
Ethereum reserved the right to use up to 5000 BTC from the pre-sale (while it was running) in order to speed up the development. The minimum purchase was 0.01 BTC.
Ethereum sold 60 M Ether Tokens (more than $18 M). The system known as Frontier went live on 30 July 2015, with 72 million coins “pre-mined”. This accounts for about 68 percent of the total circulating supply in 2019. The Ethereum Foundation manages the funds from Ethereum’s initial $18m crowd sale. It is a non-profit entity based in Switzerland.
The Dao Incident
The DAO was a digital decentralized autonomous organization and a form of investor-directed venture capital fund. Its goal was to create a decentralized Business Model by codifying the rules and automating the decision-making processes of an organization. People can make proposals to the DAO on how to spend money. The members can vote to approve these proposals. The DAO was built on the Ethereum blockchain.
In May 2016, the DAO raised over $150M from more than 11,000 enthusiastic members through a crowdfunding event. Several people expressed concerns (even during the crowdfunding) that the code was vulnerable to attack.
As the vulnerabilities had been getting fixed, in June 2016, an attacker managed to take out more than 3.6M ($50M) Ether into a “child DAO” that has the same structure as The DAO. The price of Ether dropped from over $20 to under $13.
The exploitation of this flaw in the DAO project’s smart contract software triggered the split of Ethereum into two separate blockchains. The new separate version became Ethereum (ETH) with the theft reversed, and the original continued as Ethereum Classic.
Following the DAO’s hard fork, Ethereum forked twice in the fourth quarter of 2016 to deal with other attacks. Ethereum continued to increase its security features including DDoS protection, de-bloating the blockchain, spam attack protection, etc.
The recently published Dapp.com Q3 2019 Dapp Market Report shows that at the end of Q3 2019, 62% (1721 out of 2791) of all Dapps are built on Ethereum. Though, out of these, only 604 Dapps are active. In this period, 71 New Dapps have entered the market. The number of Active Users is 392,078 ( 34% from Finance, 21% from Exchange, 45% Others).
Decentralized Finance (DeFi) has given the best growth for Ethereum dapp users – over 310,000 new dapp users in a quarter, the highest of all time so far. DeFi dapps have contributed over 58% of the volume of Ethereum dapps in Q3, with a total volume of over 2,275,000 ETH. The leader DeFi dapps on Ethereum include MakerDAO and Nest.
Compared to other blockchains, the Ethereum dapps’ performance has been very steady.
Other famous Ethereum dapps include Kyber Network, Bancor Network. Newly launched digital collectible trading platform Open Sea is doing pretty well. In the gaming realm, Gods Unchained has gained massive popularity.
Referring to a previous report on Jul 1, 2019, H1 Dapp Market Report by DappReview, the average Ethereum Dapp Lifespan greater than 2 months is only 32.48%
The journey of Ethereum Protocol
The Ethereum Foundation has made several releases during its journey. Protocol upgrades happen through a soft fork (and a hard fork in some cases) of the open-source codebase.
Olympic: Before the full launch in 2015, Ethereum had initiated its public beta pre-release known as “Olympic”. The Olympic network provided users with a bug bounty of 25,000 ether for stress testing the limits of the Ethereum blockchain.
Frontier: Frontier (July 30, 2015) was the first Live release of the Ethereum project. Following it, the Ethereum Genesis Block emerged.
Thawing Frontier: Thawing Frontier (August 3, 2015) was a planned protocol update, with client updates, changes in Gas Price set up, rewards mechanism, etc.
Homestead: Homestead (February 29, 2016) was stable. It included improvements in transaction processing, gas pricing, and security.
DAO Fork: As mentioned in the previous section, the DAO incident was a major setback. Ethereum hard forked into Ethereum and Ethereum Classic on July 20, 2016.
Tangerine Whistle: Tangerine Whistle (Oct 2016) addressed immediate network health issues due to the attacks.
Spurious Dragon: Spurious Dragon (November 18, 2016) is the second hard fork of the two-round hard fork response to the DoS attacks on the Ethereum network.
Byzantium: The Metropolis Part 1: Byzantium soft fork (16 October 2017) included changes to reduce the complexity of the EVM and provide more flexibility for smart contract developers. Byzantium also added support for zk-SNARKs (from Zcash).
Constantinople: The Metropolis Part 2: Constantinople (February 28, 2019) hard fork, and the simultaneous “St. Petersburg” network upgrade, occurred at block number 7,280,000.
In Part 2, we will provide even more interesting facts about Ethereum.
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