The Merkle

The History of Ethereum in 500 Words

If there is one cryptocurrency that has attracted outsize attention this year, it has to be Ethereum. Although not all its news has been positive, the overall sentiment has remained bullish. Over the course of the past few years, there have been some interesting Ethereum developments that people should continue to keep in mind.

The Early Years of Ethereum

Everyone will acknowledge that an ecosystem such as Ethereum’s could not have launched without significant funding. The Ethereum ICO was organized between July and August of 2014 and attracted a lot of funding. With the money raised, the company known as Ethereum Switzerland GmbH could formally develop the software project itself. It took until July 2015 before the general public was introduced to Ethereum. At that time, around 11.9 million tokens were present on the network.

We have seen quite a few changes made to Ethereum over the past few years. Right now, we are in the Metropolis stage, or at least the first part of it. Prior to this, we saw the release of Frontier in July 2015 and Homestead in March of 2016. The second phase of the Metropolis hard fork has yet to receive an official launch date, although it will probably be in either Q2 or Q3 of 2018. There is at least one more version coming after this release, which goes by the name of Serenity. 

Not all of these milestone upgrades have gone off without a hitch, though. The most controversial development occurred in 2016 when The DAO raised US$150 million through an initial coin offering. Sadly, the project backfired due to sloppy smart contract coding, and an emergency hard fork had to be introduced. It was this fork which caused Ethereum to lose its immutability and also spawned Ethereum Classic. Ever since that time, both blockchains have coexisted peacefully, even though Ethereum gets a lot more attention these days.

There have been other attacks against the Ethereum network as well. Two major problems were averted through subsequent hard forks in Q4 of 2016. The upside of these forks was that they resulted in increased DDoS protection, far less blockchain bloat, and a reduction in the effectiveness of spam attackers to nearly zero. That doesn’t mean Ethereum is completely safe and secure, though. The recent Parity client issues show how “easy” it is to ensure others can’t spend their own funds. For now, this problem remains unresolved, although developers are working on an imminent fix.

Despite all of these challenges, the price of Ethereum has continued to increase over the years. At the time of writing, one Ether is valued at US$319.24, with Ethereum’s total market capitalization hovering around US$30.3 billion. That’s a staggering amount for a project that didn’t even exist three years ago. It will be very interesting to see how the Ethereum ecosystem evolves in the coming years. This currency is clearly not competing with Bitcoin, as their respective use cases and infrastructures are completely different. No one knows what the real value of Ether should be at this point, though, as the current price is still mainly driven by speculation.