Chapter 1: Ethereum
Ethereum is a blockchain that is decentralized and has the capability of providing smart contracts. The native cryptocurrency of the site is given the abbreviation ETH, which stands for ether. Ether is the second most valuable cryptocurrency in terms of market capitalization, surpassed only by bitcoin. This is software that is open-source.
Vitalik Buterin, a computer programmer, came up with the idea for Ethereum in 2013. The names Gavin Wood, Charles Hoskinson, Anthony Di Iorio, and Joseph Lubin are also included among the company's founders. 2014 saw the beginning of development work, which was supported by the general public, and the network became live on July 30, 2015. Ethereum makes it possible for anyone to deploy decentralized applications upon it, such that users can interact with those applications. Financial instruments that do not directly rely on financial intermediaries such as brokerages, exchanges, or banks are made available by applications that fall under the category of decentralized finance (DeFi). This enables the borrowing of funds against bitcoin assets or the lending of cryptocurrency holdings for interest. Users of Ethereum are also able to generate and trade non-fungible tokens, also known as NFTs. NFTs are tokens that can be linked to specific digital assets, such as photographs, and can facilitate transactions between users. The ERC-20 token standard is used by a large number of different cryptocurrencies, which are built on top of the Ethereum blockchain. These cryptocurrencies have also used the Ethereum platform to conduct initial coin offerings.
By implementing an update known as "The Merge" on September 15, 2022, Ethereum made the shift from proof-of-work (PoW) to proof-of-stake (PoS) as its consensus method. This resulted in a reduction of the blockchain's energy consumption by 99%.
In a white paper that was published in late 2013, Vitalik Buterin, a programmer and co-founder of Bitcoin Magazine, provided an explanation of how to construct decentralized applications. This was the first time that Ethereum was detailed. Buterin argued to the developers of Bitcoin Core that blockchain technology could be useful for applications other than monetary transactions, and that it required a more robust language for application development. This would allow for the possibility of linking real-world assets to the blockchain, such as stocks and property. On the Colored Coins project, which was undertaken in 2013, Buterin collaborated with Yoni Assia, the CEO of eToro, for a short period of time. Together, they authored the white paper that outlined further applications for blockchain technology. Nevertheless, after he was unable to reach a consensus over the manner in which the project should proceed, he advocated the creation of a new platform that would later become Ethereum. This new platform would have a more robust scripting language, which would be a Turing-complete computer language.
The announcement of Ethereum took place in January 2014 at the North American Bitcoin Conference, which was held in Miami. During the course of the conference, Gavin Wood, Charles Hoskinson, and Anthony Di Iorio, who was the one who provided funding for the project, rented a house in Miami with Buterin so that they could have a more comprehensive understanding of what Ethereum may potentially become. For the purpose of bearing witness, Di Iorio invited his buddy Joseph Lubin, who in turn invited reporter Morgen Peck. After the event, Peck wrote an article about it for the publication Wired. Six months later, the founders got together once more in Zug, Switzerland, and Buterin informed them that the project would be carried out as a non-profit organization. Following his departure from the project at that time, Hoskinson went on to establish IOHK, a blockchain business that is responsible for Cardano implementation.
There are an extremely large number of people who founded Ethereum. Anthony Di Iorio wrote: "Ethereum was founded by Vitalik Buterin, Myself, Charles Hoskinson, Mihai Alisie & Amir Chetrit (the initial 5) in December 2013. Joseph Lubin, Gavin Wood, & Jeffrey Wilcke were added in early 2014 as founders." Buterin chose the name Ethereum after browsing a list of elements from science fiction on Wikipedia. He stated, "I immediately realized that I liked it better than all of the other alternatives that I had seen; I suppose it was that [it] sounded nice and it had the word 'ether', referring to the hypothetical invisible medium that permeates the universe and allows light to travel." Buterin wanted his platform to be the underlying and imperceptible medium for the applications running on top of it.
At the beginning of 2014, a Swiss firm known as Ethereum Switzerland GmbH (EthSuisse) initiated the formal development of the software that serves as the foundation for Ethereum.
Before the concept of putting executable smart contracts in the blockchain could be realized in software, it was necessary to specify the idea. It was Gavin Wood, who was serving as the chief technical officer at the time, who was responsible for carrying out this work in the Ethereum Yellow Paper, which detailed the Ethereum Virtual Machine. In the years that followed, a charitable organization in Switzerland known as the Ethereum Foundation (Stiftung Ethereum) was established. Participants in an online public crowd sale that took place between July and August 2014 were able to purchase the Ethereum value token (ether) with bitcoin, which is another form of digital currency. This allowed the development to be undertaken. There was initial appreciation for the technological advancements that Ethereum has made, but there were also concerns expressed about its scalability and security throughout its early days.
Geth (Go), Pyethereum (Python), and a C++ implementation were the three distinct implementations of the protocol that were funded by the Foundation. Other projects that were funded by the Foundation included Swarm (decentralized file storage), Mist Browser (a wallet, browser, and user interface for smart contracts, which has since been discontinued), and other projects. A comparison could be made between the three different implementations in the event that one of them included a bug. This was the intention behind the creation of the three different implementations.
The Ethereum Foundation, as part of their proof-of-concept series, produced several prototypes of Ethereum over the course of 18 months between 2014 and 2015. These prototypes were given codenames before being released. "Olympic" was the final prototype and before the public beta release was made available. A bug bounty to the tune of 25,000 ether was offered to users of the Olympic network in exchange for stress testing the Ethereum blockchain. Ethereum's "genesis block" was created on July 30, 2015, the same day as the "Frontier" event marked the formal debut of the Ethereum platform. There were 8,893 transactions that were included in the genesis block. These transactions distributed varying amounts of ether to different addresses. Additionally, the block reward was 5 ETH.
Since its original debut, Ethereum has been subjected to a number of planned protocol upgrades. These upgrades are significant modifications that have an impact on the platform's fundamental functioning and/or incentive structures. Upgrades to the protocol are carried out through the utilization of a hard fork.
For the purpose of funding the project, a crowd sale was held in 2016, and a decentralized autonomous organization known as The DAO, which is a collection of smart contracts established on the platform, was successful in raising a record-breaking US$150 million. A document titled "A Call for a Temporary Moratorium on The DAO" was authored by Emin Gun Sirer, Vlad Zamfir, and Dino Mark. In this article, the authors discussed the several ways in which the decentralized autonomous organization (DAO) could be susceptible to attacks. In June of 2016, an unknown hacker took more than fifty million dollars' worth of DAO tokens, which allowed the DAO to be exploited. Following the occurrence, the cryptocurrency community engaged in a discussion on whether or not Ethereum need to carry out a controversial "hard fork" in order to reclaim the funds that were affected. The fork caused the network to divide into two blockchains: Ethereum, which had the theft reversed, and Ethereum Classic, which continued on the chain that was initially created.
During the month of March in 2017, a number of blockchain startups, research groups, and Fortune 500 companies joined forces to announce the establishment of the Enterprise Ethereum Alliance (EEA), which had thirty initial members. ConsenSys, CME Group, the research group at Cornell University, Toyota Research Institute, Samsung SDS, Microsoft, Intel, J. P. Morgan, Cooley LLP, Merck KGaA, DTCC, Deloitte, Accenture, Banco Santander, BNY Mellon, ING, and National Bank of Canada were among the 116 enterprise members that the nonprofit organization had by the time May 2017 rolled around. MasterCard, Cisco Systems, Sberbank, and Scotiabank were among the more than 150 members of the alliance as of July 2017, when the partnership was officially established.
In the year 2024, it was reported that Paul Brody, who was a member of the EEA board for EY, would be taking over as chairperson, and Karen Scarbrough, who was a board member for Microsoft, would take over as executive director. As another new board member, Vanessa Grellet, who works for Arche Capital, joined the organization.
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