[ad_1]
It would appear that five years is a relatively short time for an information technology company, but Ethereum has made colossal progress during this time, moving from its initial coin offering project to the largest blockchain platform, running around 2,000 decentralized applications. . Today, the market capitalization of its native cryptocurrency, Ether (ETH), is worth $ 38 billion, larger than Ford Motor Company and the popular Snapchat app. Not only that, but the value of Ether has seen a 121-fold increase over the period of the network’s existence.
As the entire team is preparing for the transition to the proof-of-stake consensus algorithm ahead of the next Berlin update, Cointelegraph recalls the notable changes that have occurred to the platform in the five years since its launch and the mistakes that have only reinforced his determination.
2013/2014: an idea for an 18 million dollar crowdsale
Ethereum was invented by Vitalik Buterin, a Russian-born Canadian programmer. It was 2013 and Buterin was just an 18-year-old teenager, but his idea found a lively response in the global blockchain community. Subsequently, Gavin Wood, a British computer programmer, demonstrated the possibility of creating the system invented by Buterin and described the basic principles of its operation in the Ethereum “Yellow Book”. Together with the first members of the Ethereum team, they launched a crowdsale and raised $ 18 million for the development of the project.
2015: online launch and stock exchange listing
The first version of the Ethereum cryptocurrency protocol, called Frontier, was launched on July 30, 2015. But the level of security the system boasted back then was far from what Ethereum is today. The launch of Frontier marked an important milestone in the history of the network, after which the developers immediately started working with smart contracts and creating DApps on the real blockchain.
The earliest existing historical record of the price of Ether dates back to August 7, 2015, when ETH was added to the Kraken cryptocurrency exchange at $ 2.77 per coin. During the first three days of trading, its price dropped to a humiliating $ 0.68, most likely under the influence of early investors’ quick sell-off.
In the second half of the year, throngs of cryptocurrency enthusiasts were quick to find out what they could about Ethereum. A particularly significant contribution to its dissemination was made by the DEVCON-1 developer conference, which was held from 9 to 13 November. The event sparked intense discussions on 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 the 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 per coin on March 13, with the platform’s market cap surpassing the boastful $ 1 billion. On March 14, Homestead went live, which made its blockchain officially secure through new protocols and network changes (EIP-2, EIP-7, and EIP-8), making future updates possible.
In particular, network security was based on mining, planned only in the early development phase with subsequent transition to hybrid model PoS in an intermediate phase. At the same time, exuberant requirements for video memory served as protection against the use of ASIC miners.
The next event, which took Ether’s price to its highest value that year – $ 21 – was widespread media coverage of the dizzying success of the DAO project, which raised more than 12 million ETH ($ 150 million at the time) in May. The DAO – an acronym for Decentralized Autonomous Organization – was one of the pioneers of the next era of the ICO and chose Ethereum as a springboard to increase investment.
However, on June 16, using a vulnerability in The DAO’s code, unknown hackers stole about $ 60 million in ETH from the project. News of the attack cut ETH’s price in half to $ 11. Buterin offered to return the stolen funds by conducting a hard fork to restore the network to its pre-attack state. Following a controversial hard fork held on July 20, the network split into two: Ethereum and Ethereum Classic.
On September 22, Ethereum took another hit: The network came under a distributed denial-of-service attack, slowing its operations considerably. The news became a spur to the start of a local downtrend in the curbed price, which began to consolidate in the $ 7– $ 9 range by the end of the year. Two unplanned hard forks were then performed to improve network resilience and correct the consequences of the DDoS attack.
2017: boom in ICOs
Ether’s price shot up 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, causing an increasing number of crypto investors and miners to opt for Ether as an alternative investment. On May 6, the price of ETH set a new bar of $ 95 per coin.
Ethereum’s popularity has grown rapidly in the crypto community and among DApp developers. The initial hype of the coin supply also contributed to the increased demand for Ether, as thousands of projects chose to raise funds in ETH. By September 1, Ethereum’s price had nearly hit the whopping $ 400, but news from China banning ICOs and cryptocurrency trading quickly reduced it to nearly $ 220.
The price gradually recovered in mid-October after the release of the Byzantium network update on 18 September. Coupled with the growth of the ICO bubble, where Ether was still the primary means of payment, ETH hit nearly $ 800 by the end of the year.
2018: Ethereum at $ 1,400 and bearish trend
The beginning of 2018 turned out to be even more successful for Ethereum than the previous one. On January 13, the price of Ether reached its all-time high of around $ 1,400. But the ICO rush, which triggered Ethereum’s rapid price growth in 2017, has ended. Throughout 2018, its echoes played a cruel joke on Ether as thousands of ICO projects sold their savings, meaning ETH fell even faster than the rest of the market.
In early September, news of the Constantinople hard fork – expected in November – slowed the price drop and injected positive sentiment into the community. However, the network update was delayed. Influenced by cross-bearish sentiments on the cryptocurrency market and awaiting updates, the price dropped to $ 85, moving from the second to the third largest cryptocurrency by market cap behind XRP.
2019: technical work, delays in updating and popularity of DAOs
Many aspects escaped the developers’ control over the course of the year as they were actively involved in conducting technical work on the network. Meanwhile, the community has lost count of the number of updates made. In January, the technical roadmap gained clarity as difficult engineering problems were solved and the Ethereum development community continued to grow.
DeFi has become the largest industry within Ethereum, and the market has seen the first signs of growth in games and decentralized autonomous organizations. As of early 2019, the only DeFi protocol with significant funds was MakerDAO, which had a total of 1.86 million ETH ($ 260.4 million at the time). The playing field became much more diverse by the end of the year as new entrants rushed into the industry.
On February 28, the hard fork of Constantinople took place on the Ethereum network, which prepared it for the transition to the Casper PoS protocol and the abolition of the previous mining model. However, the eighth update, called Istanbul – which was initially scheduled for December 4 – was delayed and activated on the Ethereum mainnet on December 8.
Among the main objectives of Istanbul were to ensure the compatibility of the Ethereum blockchain with the anonymous cryptocurrency Zcash (ZEC) and to increase the scalability of the network through the zero-knowledge protocols SNARK and STARK. In addition, the update made it difficult to carry out denial-of-service attacks on the network due to the change in the cost of gas required to launch the opcodes.
The advancement of Ethereum 2.0 has laid the foundation for the largest companies in the world to begin using the Ethereum blockchain. In July, Samsung released an Ethereum Developer Software Kit, six months after it was revealed that the development of its new phone included an integrated Ethereum wallet. Another large partnership involved the Internet browser Opera, which had launched an Ethereum-backed Android wallet in late 2018 and announced an integrated Ethereum wallet for iOS users in early 2019.
Meanwhile, Microsoft has continued its involvement with the Ethereum ecosystem. In May, the company released the Azure Blockchain Development Kit to support Ethereum development. In October, it supported an Enterprise Ethereum Alliance tokenized incentive scheme for use within corporate consortia. And in November it launched Azure Blockchain Tokens, a service that allows companies to issue their tokens on Ethereum.
2020: boom in DeFi and PoS
In the first half of 2020, Ethereum – famous for its numerous conferences and meetups – was forced to postpone all activities due to the coronavirus pandemic. However, the team managed to make significant progress in solving the scalability problem, with the launch of the final Ethereum 2.0 testnet scheduled for August 4.
The developers hope that once the upgrade is complete, the Ethereum network will become faster, cheaper and more scalable without compromising the decentralization and flexibility of the network. Meanwhile, the blockchain network continues to grow, as activity in the decentralized finance market has increased significantly.
According to Dapp.com, the daily volume of value transferred via DeFi applications reached an all-time high of $ 1.8 billion on July 2. During the second quarter, a record $ 4.9 billion was moved across DeFi applications – a 67% growth from the previous quarter – while the number of active users of Ethereum applications reached 1,258,527, an increase 97%.
