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From a teenager’s dream to a $ 38 billion blockchain

August 3, 2020

It appears that five years is a relatively short time for an information technology company, but Ethereum has made tremendous progress over that time, evolving from its own ICO project into the largest blockchain platform running around 2,000 decentralized applications. Today is the market cap of its native cryptocurrency, Ether (ETH) is valued at $ 38 billion – more than the Ford Motor Company and the popular Snapchat app. In addition, the value of ether has increased 121 times over the life of the network.

Because the entire team is preparing for the transition to the proof-of-stake consensus algorithm before the next Berlin updateCointelegraph commemorates the surprising changes that have been made to the platform in the five years since its launch and the glitches that have only exacerbated its resolution.

2013/2014: An idea for a joint sale of $ 18 million

Ethereum was invented by Vitalik Buterin, a Canadian programmer of Russian descent. It was 2013 and Buterin was only an 18-year-old teenager, but his idea found a lively response in the global blockchain community.. Later, Gavin Wood, a British computer programmer, tested the possibility of developing the system invented by Buterin and described the basic principles of how it works in Ethereum’s “Yellow Paper”. Together with the early members of the Ethereum team They started a group sale and raised $ 18 million to develop the project.

2015: Start of the network and listing on stock exchanges

From a teenager’s dream to a $ 38 billion blockchainFrom a teenager’s dream to a $ 38 billion blockchain

The first version of Ethereum’s cryptocurrency protocol called Frontier was released on July 30, 2015. System security at that time was far from today’s Ethereum. The launch of Frontier was an important milestone in the history of the network. After that, the developers immediately started working with smart contracts and creating DApps for the real blockchain.

The first existing historical price record for ether is August 7, 2015, when ETH added Kraken to the crypto exchange for $ 2.77 per coin. During the first three days of trading, the price fell to $ 0.68, most likely under the influence of quick sales by early investors.

In the second half of the year, numerous cryptocurrency enthusiasts hurried to learn what they could know about Ethereum. A particularly important contribution to popularization was the DEVCON 1 developer conference, which took place from November 9th to 13th. The event triggered intense discussions about the development of Ethereum with the participation of representatives from IBM, Microsoft and UBS.

2016: DAO, hackers and Ethereum split

In early 2016, the price of ether rose rapidly, fueled by news of the upcoming launch of a network protocol with a more stable version: Homestead. As a result, ETH hit its first serious high of $ 15 a coin on March 13, with the platform’s market cap surpassing the boastful $ 1 billion mark. On March 14th, Homestead went online and made its blockchain officially secure through new protocols and network changes (EIP-2, EIP-7 and EIP-8), which made future updates possible.

In particular, the network protection was based on mining, which was only planned for the initial phase of development with the subsequent transition to PoS with a hybrid model in an intermediate phase. At the same time, the lavish demands on video memory protected the use of ASIC miners.

The next event, which brought Ether’s price to its highest level this year – $ 21 – was extensive media coverage of the dizzying success of the DAO project. which raised over 12 million ETH (then $ 150 million at the time) in May. The DAO, short for Decentralized Autonomous Organization, was one of the pioneers of the emerging ICO era and chose Ethereum as the launch pad for investments.

On June 16, however Using a security vulnerability in the DAO code, unknown hackers stole approximately $ 60 million from the project at ETH. The news of the attack halved ETH’s price to $ 11. Buterin offered to return the stolen money by doing a hard fork to restore the network to the state it was in before the attack. After a controversial hard fork on July 20th The network was divided into two parts: Ethereum and Ethereum Classic.

On September 22, Ethereum suffered another blow: The network was exposed to a distributed denial-of-service attack that slowed its operation significantly. The news became an upswing for the start of a local downtrend at the already discounted price, which began to consolidate in the $ 7-9 range over the course of the year. Then, Two unplanned hard forks were implemented to improve network resistance and correct the consequences of the DDoS attack.

2017: The ICO boom

The price of Ether saw a rapid rise in early 2017 when the cryptocurrency was added to the eToro platform on February 23. Around the same time, the number of unconfirmed transactions on the Bitcoin network had reached 200,000, prompting an increasing number of cryptocurrency investors and miners to choose Ether as an alternative investment. On May 6, the ETH Prize set a new limit of $ 95 per coin.

Ether’s popularity grew rapidly in the crypto community and among DApp developers. The hype surrounding ICOs also contributed to the increased demand for ether, as thousands of projects decided to collect donations at ETH. Until September 1st Ethereum’s price had hit almost a whopping $ 400, but news that China banned ICOs and cryptocurrency trading quickly brought it to nearly $ 220.

The price gradually recovered in mid-October after the release of the Byzantium network update, which took place on September 18. Along with the growth of the ICO bubble, in which ether was still the main form of payment, ETH reached almost $ 800 at the end of the year.

2018: ETH at $ 1,400 and downtrend

The beginning of 2018 proved to be even more successful for Ethereum than the previous one. On January 13th The ether price peaked at around $ 1,400. However, the ICO fever that triggered Ethereum’s rapid price growth in 2017 ended. Throughout 2018, their echoes played a gruesome joke on Ether as thousands of ICO projects sold their savings, which meant Ether fell even faster than the rest of the market.

beginning of SeptemberThe news of Constantinople’s hard fork – expected in November – slowed the price decline and created a positive mood in the community. However, The network update was delayed. Influenced by bearish moods in the crypto market and pending updates, The price dropped to $ 85 and rose from the second largest cryptocurrency by market cap to the third largest by XRP.

2019: Technical work, delays in updates and popularity of DAO

Many aspects were beyond the control of the developers throughout the year because they were actively involved in the technical work in the network. Meanwhile, The community lost the number of improvements made. The technical roadmap gained clarity in January as difficult technical problems were solved and the Ethereum developer community continued to grow.

DeFi became the largest sector within Ethereum, and the market saw the first signs of growth in gaming and decentralized autonomous organizations. Early 2019, eThe only DeFi protocol with significant financial resources was MakerDAO with a total of 1.86 million ETH (at that time $ 260.4 million). The playing field became much more diverse at the end of the year when new market players stormed into the industry.

On February 28, Constantinople’s hard fork in the Ethereum network took place, preparing it for the transition to the Casper PoS protocol and the abolition of the previous mining model. However, The eighth update, called Istambul, which was originally scheduled for December 4, was delayed on December 8 and activated on Ethereum’s main network.

The main goals of Istambul were to ensure the compatibility of the Ethereum blockchain with the anonymous Zcash cryptocurrency (ZEC) and to improve the scalability of the network using the Null-SNARK and STARK proof-of-knowledge protocols. In addition, the update made it difficult to carry out denial-of-service attacks on the network as the gas costs required to start the operational codes were changed.

The progress of Ethereum 2.0 laid the foundation for the world’s largest companies to use the Ethereum blockchain. In July, Samsung released a software kit for Ethereum developers, six months after it became known that the development of its new phone included an integrated Ethereum wallet. Another great partnership was that of Internet browser Opera, which launched an Android wallet supported by Ethereum in late 2018 and announced an integrated Ethereum wallet for iOS users in early 2019.

In the meantime, Microsoft continued to participate in the Ethereum ecosystem. In May, the company released the Azure Blockchain Development Kit to support the development of Ethereum. In October, an Enterprise Ethereum Alliance token incentive system for use in corporate consortia was approved. Azure Blockchain tokens were introduced in November, a service that allows companies to issue their own tokens through Ethereum.

2020: The rise of DeFi and PoS

In the first half of 2020, Ethereum – famous for its numerous conferences and meetings – had to postpone all activities due to the coronavirus pandemic. However, The team has made significant progress in solving the scalability problem with the release of the latest Ethereum 2.0 test network, scheduled for August 4th.

Developers hope that the Ethereum network will become faster, cheaper, and more scalable after the update is complete without affecting the decentralization and flexibility of the network. In the meantime, the blockchain network continues to grow as activities in the DeFi market have increased significantly.

According to Dapp.com The daily value volume transmitted through DeFi applications reached a record high of $ 1.8 billion on July 2. DeFi applications posted a record $ 4.9 billion in the second quarter – an increase of 67% compared to the previous quarter – while the number of active users of Ethereum applications reached 1,258,527, an increase of 97% .

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