Vitalik Buterin came up with the idea for Ethereum in 2013 at the age of 19. Later that year, he published a whitepaper describing Ethereum as the “next-generation intelligent contract and decentralized application platform,” 1 which marked the beginning of Ethereum’s journey.
Ethereum is now the second largest cryptocurrency by market capitalization and accounts for about 18% of the cryptocurrency market. Its success cannot be separated from a creatively elegant idea, a well-implemented development process, and ongoing community support.
In this article we will look back at the history of Ethereum’s development and provide an outlook on what is to come.
The invention of Ethereum was inspired by Bitcoin.
Bitcoin laid the foundation for decentralized blockchain technology. However, its functionality is limited to electronic peer-to-peer transfers. Given this limitation, Buterin wanted to extend the functionality of the blockchain to programmable apps.
Initially, he wanted to achieve this by adding a more advanced scripting language to Bitcoin to enable smart contract processing, but this idea was rejected by the Bitcoin community. Then Buterin decided to create a completely new blockchain to enable this “world computer”.
In late 2013, Buterin published his white paper outlining the idea of Ethereum. In January 2014, Ethereum was first announced at the North American Bitcoin Conference in Miami. The idea attracted many developers, including Gavin Wood, who published the famous “Yellow Paper” on the technical implementation for Ethereum2.
At the end of 2014, Ethereum had its first crowdfunding and raised more than 18 million US dollars through the sale of the native token Ether. The early founders and developers of Ethereum2 also hosted the first Ethereum conference called DEVCON0, where the developers first met.
The development of Ethereum was planned in four main phases. Each level represents a necessary system-wide upgrade of the network, in which old versions are no longer supported. They are also called “hard forks”.
There were planned and unplanned sub-upgrades within the main phases.
07/30/2015– 03/14/2016: Implementation of the technical fundamentals (“Frontier” phase)
On July 30, 2015, the first version of Ethereum (Ethereum 1.0) called Frontier was released. It had the two most basic functions: enabling users to mine ethers and execute smart contracts. The purpose of the initial phase was to get the network going so that miners can set up their mining processes and developers can test their decentralized applications (DApps).
A little fork called Border defrosting followed, in which gas was capped at 5,000 per transaction to ensure transaction fees weren’t too high and hamper usage.
March 14, 2016–16. October 2017: Improvement of the infrastructure to resolve security problems (“Homestead” phase.))
If Frontier were the working version of Ethereum, homestead was the “safer” version of Frontier.
The Ethereum vulnerability was brought to the public with the DAO hack. Launched in 2016, DAO was an innovative idea that allowed users to raise funds. However, it failed because of a flaw in its smart contract code that hackers exploited to steal some of the organization’s funds. This event led to a controversial decision to implement a hard fork on the Ethereum network to return the stolen funds. Part of the community did not accept the change and started a branch called Ethereum Classic, which still exists today.
After several DoS attacks (Denial-of-Service), two sub-upgrades were called Mandarin pipe and Wrong dragon were released to address security issues by adjusting gas charges and introducing government clearings.
October 16, 2017 – January 2, 2020: Overcoming the challenges associated with expansion and growth (“Metropolis” phase)
metropolis was a major improvement in the security, privacy, and scalability of Ethereum. It solved many of the challenges Ethereum faced during its scaling process, and brought developers and users an easier, more efficient experience. Because the update was so complicated, it was released in two steps: Byzantium and Constantinople.
Byzantium was the first tier, with major upgrades introduced in nine patches, also known as the Ethereum Improvement Protocols (EIP). This included important features such as zk-SNARKs3, Account Abstraction4 and the difficulty bomb5.
Constantinople was scheduled to start in mid-2018, but was delayed for more than half a year due to a critical bug found hours before the intended start. Constantinople was supposed to fix any problems that might arise from the implementation of Byzantium. In addition, it laid the foundation for the transition from proof-of-work to proof-of-stake, which will significantly reduce the validation energy consumption of Ethereum.
January 2, 2020–2022: Ethereum 2.0 should become more scalable, secure and sustainable (“Serenity” phase)
The Serenity phase is currently still in development. This version, also known as Ethereum 2.0, aims to bring Ethereum to a level that can be widely used without encountering security or mass issues.
Specifically, it intends to solve two main challenges that Ethereum is facing: a congested network that can only process a limited number of transactions per second (with increased gas fees for faster transactions) and the high energy consumption associated with evidence – Working mechanism.6th
Two of the most important upgrades are the move from proof-of-work to proof-of-stake and the implementation of shard chains that distribute the workload of the network Ethereum 2.0 is said to be more scalable, secure, and sustainable, although it remains unclear when (or if) it will ultimately be implemented and other issues with the aftermath.
Ether price and stages of development
After eight years of development, Ethereum has grown from an idea to a living ecosystem supported by one of the largest developer communities in the crypto space. As a software platform, it needs to evolve to address its problems. Its community is progressive and has made several significant changes over time. Some of the key changes are yet to come, which we’ll cover in more detail in future posts.
2 Early founders included Vitalik Buterin, Anthony Di Lorio, Charles Hoskinson, Mihai Alisie, Amir Chetrit, Joseph Lubin, Gavin Wood, and Jeffrey Wilcke.
3 “Zero-Knowledge Succinct Non-Interactive Argument of Knowledge” and refers to a construction of evidence in which one is in possession of certain information, e.g. B. a secret key, without revealing this information and without any interaction between the examiner and the verifier.
5 Refers to the increase in the level of difficulty in Ethereum’s consensus mechanism for proof-of-work.
6 Proof-of-Work is a consensus mechanism used to verify the validity of blockchain transactions by solving computationally intensive puzzles with the processing power of the miner’s computers.
7 The proof-of-stake is another consensus mechanism that is used to verify blockchain transactions. However, it does this by using the miners’ existing coins as part of the validation process, which requires less processing power from the computer.
Important Risks Associated With This Item
There are risks associated with investing, including the potential for loss of capital. Crypto assets like Bitcoin and Ether are complex, generally exhibit extreme price volatility and unpredictability, and should be viewed as highly speculative assets. Crypto assets are often referred to as crypto “currencies”, but they usually function without central authority or banks, are not endorsed by any government or issuing body (i.e. no recourse), have no government or insurance coverage, are not legally tender and have in Limited or no usability compared to fiat currencies. Federal, state, or foreign governments can restrict the use, transfer, exchange, and value of crypto assets, and regulation in the U.S. and worldwide is still developing. Due to security breaches, fraud, bankruptcy, market manipulation, market surveillance, KYC / AML (Know Your Customer / Anti-Money Laundering) procedures, non-compliance with applicable rules and regulations, technical malfunctions, hackers, Malware or other reasons that have a negative impact on the price of a cryptocurrency traded on such exchanges or that rely on a settlement facility or that can otherwise prevent access or use of the crypto-asset. Crypto assets can experience unique events such as forks or airdrops that can affect the value and functionality of the crypto asset. Crypto-asset transactions are generally irreversible, which means that a crypto-asset is sent in cases where: (i) it is sent to a wrong address, (ii) the wrong amount is sent, or (iii) transactions are fraudulent from an account. A crypto asset can lose popularity, acceptance, or use, thereby affecting its price, and the price of a crypto asset can also be affected by the transactions of a small number of holders of such crypto assets. Crypto assets can be difficult to value and ratings, even for the same crypto asset, can vary significantly depending on the price source or be otherwise suspicious due to market fragmentation, illiquidity, volatility and the potential for manipulation. Crypto assets are generally based on blockchain technology and blockchain technology is a relatively new and untested technology that works as a distributed ledger. Blockchain systems can be exposed to internet disruptions, consensus errors, or cybersecurity attacks, and the date or time you initiate a transaction can be different from what is recorded on the blockchain. Access to a certain blockchain requires an individualized key which, if compromised, can lead to loss through theft, destruction or inaccessibility. In addition, different crypto assets have different properties, use cases and risk profiles. Information on digital assets, crypto assets or blockchain networks provided by WisdomTree should not be viewed or viewed as investment or other advice, a recommendation by WisdomTree, including the use or suitability of any particular digital asset, crypto asset, blockchain -Network or network a specific strategy. WisdomTree does not act and has not consented to act in an investment advisory, fiduciary or quasi-trustee role for an advisor, end customer or investor and has no responsibility in relation to digital assets, crypto assets or blockchain networks in this regard.
This story originally appeared on Wisdomtree.com