The story of the second-best blockchain globally, Ethereum, dates back over a decade as a gleam in Vitalik Buterin’s eyes. The latter is the headliner on the blockchain’s creator list, assisted by a few other renowned developers, including Romanian co-founder Mihai Alisie, with whom Buterin launched the first Bitcoin Magazine worldwide in 2011.
Around those times, the gurus would sense and stress the limitations of the first and largest blockchain—Bitcoin—and work on something they’d see bigger. It was not about a cryptocurrency that would serve as a mere monetary venue, but a new ecosystem that could work as a “global computer”. In layman’s terms, Buterin envisioned a platform run by smart contracts that could host decentralized apps, and shortened dApps, with less to no need for human involvement or trust conventions.
Now, you see people studying how to buy crypto currency like Ethereum for more than the mere reason of conducting transactions and making purchases. Though Ethereum can be used for a wide array of transactions, from buying something as simple as a coffee to booking a premium hotel stay, the possibilities extend far beyond these ordinary transactions, emphasizing the asset’s vast range of use cases.
Jumping to today, Ethereum managed to become the second-biggest cryptocurrency worldwide, supporting a system of dependent networks worth over 1TN. How did Ethereum and, implicitly, its managers succeed in creating something with such an unmatched worth? What are Ethereum’s most notable achievements in history?
How it all began
The crypto world is full of mysteries and wonders, some of which obscure Ethereum’s origins. While most people may know when the blockchain appeared and how it rose to popularity, its humble beginnings may still be dumbfounding for neophytes, which is why we’re breaking it down for you.
It was December 2013 when Vitalik Buterin, inspired by his father, who first introduced him to Bitcoin, was conceiving and uploading the Ethereum white paper with two goals. One objective was to build a network of dependent decentralized computers able to run programs and apps, whereas the other was to remove the barriers incurred by Bitcoin. Alongside 7 other founders, Ethereum began taking shape.
Fast-forward to July 2014, and a six-week presale unfolded, unlocking a 60MN Ether sale for around 18MN dollars, the equivalent of 31,591 BTC at that time. Officially, the Ethereum blockchain and ETH, its native token, debuted on July 30, 2015.
The DAO attack may very well have been the necessary evil
It was November 2015 when a new standard, the widely-known ERC-20, began guiding the whole Ethereum community and harbingered a new project-specific economy where the network’s stability was the pilar. Moving forward, perhaps one of the most impactful moments in Ethereum’s past, the ill-famed hack of the Decentralized Autonomous Organization (DAO), occurred in June 2016. The disaster saw hackers steal over 3.6MN ETH and send market shockwaves that pushed the crypto’s price from a magnetizing $20 to a daunting $9 in a day and a half.
As a philosophical rupture was gaining contour and leading to the formation of two camps—those who vouched for rolling back the network to moments before the assault and those who wished to keep going—a new milestone was about to be achieved. The bulk of the Ethereum community chose to hard fork the network to rewind the chain and recoup the missing assets.
This is how Ethereum and Ethereum Classic came into being. The latter is theoretically the earliest version of Ethereum, sticking to a proof-of-work consensus mechanism. In contrast, the former’s hard fork is the revered proof-of-stake boasted by Ethereum today.
The CryptoPunks tryout
In the midst of 2017, a team tried out an initiative that breathed new life into the chain and led to the launch of 10K ERC-20 tokens, some of which reached astronomical fame. For your information, Wrapped Bitcoin is, in essence, an ERC-20 token. CryptoPunks represented the first collection of non-fungible tokens (NFTs) on Ethereum and eased access to this ground-breaking undertaking by allowing interested parties to invest in the tokens with only an Ethereum wallet to claim the assets.
The project spurred what would turn into a standard for NFTs the following year, namely the ERC-721, which inspired the creation of a new range of indivisible and one-of-a-kind assets that revolutionized the realm of video games and more. Slowly, new art platforms and games emerged, bringing new opportunities to purchase and sell assets on the blockchain.
Almost inevitably, the frenzy birthed drew in rising numbers of investors, leading to traffic congestion in the network in the midst of 2020. Around those times, Ethereum would have already gained international prominence, and it was a matter of time before new milestones would be achieved. Famous Ethereum-powered DeFi protocols caught on during that period, including Compound and Aave, and billions of dollars got locked in them, resulting in millions of dollars in daily trading volumes.
The switch to proof-of-stake
Inarguably one of the most memorable moments in Ethereum’s history, the shift from the energy-consuming proof-of-work consensus mechanism first introduced by Bitcoin to the less harmful proof-of-stake in September 2022 took the world aback. Both Bitcoin and Ethereum relied on complex math equations whose solutions would help miners launch new blocks into the system for crypto-based rewards. Cryptos employ this technique to determine the correctness of new transactions sent to the chain.
In light of the environmental worries linked with PoW, the highly-awaited inclusion of the consensus layer of the Beacon Chain with the blockchain’s mainnet execution layer stroke as a godsend. What did it mean for Ethereum2? Well, the blockchain’s Foundation team simply changed the name of the ETH2 to the consensus layer in order to protect owners from rip-offs such as exchanging ETH for ETH2.
Ethereum’s steps to mainstreamness after the Merge.
The second-best blockchain and crypto worldwide, as demonstrated by its market cap and the wide range of solutions built on-chain, is a pillar of the cryptosystem. While scaling wasn’t a breeze for the network, the shift to the new consensus began and continues to solve diverse challenges emerging without notice.
More developments are underway, with Buterin coining other updates for the chain, namely the Surge, Verge, Purge, and, lastly, the Splurge. The developer team behind Ethereum is consistently working on scaling the network, so stay close to see what else is being cooked in the oven!
Lynn Martelli is an editor at Readability. She received her MFA in Creative Writing from Antioch University and has worked as an editor for over 10 years. Lynn has edited a wide variety of books, including fiction, non-fiction, memoirs, and more. In her free time, Lynn enjoys reading, writing, and spending time with her family and friends.
