Cryptocurrencies have been parading down the red carpet for some time now, lapping up the limelight. The well-known volatility of the crypto market has added to the excitement and hype. But where did it all start? This Medium series from Contentworks takes a look at the history of some of crypto’s top players and how each digital asset shot to stardom. Let’s delve into the evolution of Ethereum.
What is Ethereum?
Before we get into the nitty-gritties of how it all began, it’s important to address the question — what is Ethereum? And how does it differ from crypto trend-setter Bitcoin? Well, in short, Ethereum is an open-source public service that used blockchain technology to facilitate smart contracts as well as crypto trading. This is all done without third-party involvement. Ethereum differs from Bitcoin in many ways offering different methods of exchange other than crypto and faster ETH confirmations than BTC.
The Very Beginning
In 2011, Ethereum founder Vitalik Buterin was a blockchain-intrigued, 17-year-old programmer. He co-founded Bitcoin Magazine in the same year and in 2013 released a whitepaper describing what would eventually turn into Ethereum. He used basic scripting language envisioning a platform with wider transaction capabilities than what was already in motion.
He said: “I thought [those in the Bitcoin community] weren’t approaching the problem in the right way. I thought they were going after individual applications; they were trying to kind of explicitly support each [use case] in a sort of Swiss Army knife protocol.”
The Next Step: Crowdsourcing
With a new decentralised vision in clear site, Vitalik and a team of co-founders launched a crowdsourcing campaign throughout July and August 2014 that raised $18 million. Pretty impressive, right? This led to the first live release of Ethereum in 2015 known as Frontier. But first came Olympic — the 9th and final test-net which allowed developers to explore everything Ethereum.
Vitalik encouraged developers to stress-test the network by overloading it and doing all kinds of “crazy” things that would help iron out any initial teething problems. Those who put in the time were rewarded with 25,000 ETH — basically being paid for causing all kinds of trouble. Now that’s a fun job!
Four main categories were put through their paces: Transaction Activity, Virtual Machine Usage, Mining Prowess and General Punishment.
Frontier sounds revolutionary. And that it was. The Ethereum development process was broken down into stages with Frontier being the very first. Despite providing bare-bones functionality, it was a massive step for the development team. Frontier was released as a main net on 30th July 2015 allowing users to buy/sell Ethereum, mine, build, test and upload Ethereum smart contracts and distributed applications. Canary contracts were used to notify users that a chain was bad or vulnerable and were given a value of either 0 or 1. Contracts with issues were given a 1 allowing the Ethereum development group to stop a transaction on the network should something go wrong. This might seem highly centralised — and it was — but it was somewhat necessary during the early stages.
Homestead was the first planned hard fork of the Ethereum network which was implemented on 14th May 2016 with block number 1,150,000. Three significant improvements and changes were made.
1. The canary contracts were removed making the network decentralised as planned
2. New codes were introduced in the network programming language, Solidity.
3. The Mist wallet allowed users to hold/exchange ETH and write/deploy smart contracts
The Homestead upgrade was significant as it was the first implementation of EIPs or Ethereum Improvement Proposals. Essentially, an improvement would be suggested to the community and if approved would get the go ahead. Everything from increased gas costs to transaction signatures as well as the contract ‘fail’ initiative went through the EIP process.
In 2016, an impressive $150 million was raised in a token sale for Ethereum funding. The work was led by the Decentralised Autonomous Organisation (DAO). But in June, the DAO was hacked and $50 million worth of ETH was stolen. In response, the Ethereum community decided to hard fork the chain in order to restore funds to their original wallets and patch over the apparent network vulnerabilities. As some users continued to use the original Ethereum chain, Ethereum Classic was born.
The rest of the community followed the hard fork decision and continued mining on the new chain which evolved into the Ethereum blockchain as we know it today.
This was the next stage of Ethereum’s development and was broken down into two main stages.
Byzantium was a Greek colony in early antiquity which later became Constantinople and eventually Istanbul, names which have influenced Ethereum updates.
Byzantium came into action in 2017 at block number 4,370,000 and included nine EIPs. Among the nine was the Difficulty Bomb, a mechanism that would be activated as required to increase the difficulty of mining a new block until the process becomes impossible and no new blocks could be mined. This was designed to support the shift from Proof of Work which rewards miners on the network to Proof of Stake — without the threat of a hard fork from those who still want to continue down the old route.
Constantinople was delayed among security fears but later implemented on 28th February 2019 as the second stage of Metropolis. The changes were implemented at block 7,280,000 with today’s network still being in the Constantinople phase. It includes smart contract verification.
Serenity is where Ethereum is heading and involves a complete switch to Proof of Stake. This will decrease the computational and electrical requirements of Ethereum and help to stabilise Ethereum’s block speed. Serenity is likely to occur after Ethereum’s next hard fork which will go by the name of Istanbul — building on the progression of Metropolis.
Watch this space!