History of Ethereum
Ethereum (ETH) is the second largest Cryptocurrency by volume and market cap after Bitcoin. Ethereum is powered by the next generation, Turing complete and fully programmable Blockchain platform which provides more flexibility and diversity. The technology behind Ethereum enables people to launch smart contracts and individual tokens, which provides a solid foundation for many ICOs, STOs and Blockchain based companies that are emerging every single day.
Ethereum was proposed back in late 2013 by its founder Vitalik Buterin. The online crowd sale took place around August 2014. Since then, Ethereum has surpassed a total market cap of more than $28 Billion with an average daily volume of a little over $6 Billion as of June 2019, according to Marketcap.
The birth of Ethereum
Vitalik Buterin saw the potential of Blockchain technology and wanted to extend it beyond payments. Bitcoin disrupted the payments landscape, but it is technically very restrictive in nature and people couldn’t do much on the network except for sending and receiving Bitcoins. Initially, Vitalik wanted to build Ethereum as an extension to Bitcoin but he later decided to launch it as a new cryptocurrency which works independently and let people around the world build Decentralized Applications (DApps) on Ethereum and launch tokens for Initial Coin Offerings (ICO) or even conduct their own Security Token Offerings (STO) that follow all the federal security regulations.
The Ethereum blockchain is powered by Ethereum Virtual machine (EVM) which runs on many different nodes that power the Ethereum Network. EVM is responsible for executing smart contracts and maintain the overall state of the blockchain. Ethereum is primarily an open and public blockchain platform, however, it allows institutions and individuals to build private blockchain networks that run independently, which ensures greater security and privacy. Just like Bitcoin, Ethereum has a Proof of Work (PoW) consensus mechanism and it plans to transition towards a Proof of Stake (PoS) model that will enable Ethereum to have greater scalability and consume less power to maintain the network.
The famous DAO Hack and chain split
In 2016, Ethereum launched ‘Decentralize Autonomous Organization (DAO)’ which was an investor focused and fully automated venture capital fund on Ethereum Blockchain. It raised $150 million in the token sale but in June 2016, it got hacked and almost $50 million worth of ETH were stolen from the DAO contract. It was believed that there was a bug in the smart contract that led hackers steal the funds. This resulted in a hard fork chain split, where the Ethereum network was split into two independent networks and the old chain was called Ethereum Classic.
Development history and future plans
Since the initial public launch of the Ethereum platform, it has undergone many upgrades from time to time. The first version of Ethereum was called Olympic, which was released in May 2015 as a private network. After a couple of months, the Frontier version of Ethereum was launched in July 2015. Frontier was the first public launch of the Ethereum network. After Frontier, the Ethereum network launched Homestead in 2016, Metropolis (Byzantium) in 2017, and Metropolis (Constantinople) in early 2019. The Ethereum community is currently working to launch Serenity, which would ensure a complete transition from Proof of Work (PoW) to Proof of Stake (PoS) consensus algorithm.