History of ETH: The rise of the Ethereum blockchain. Ethereum is an open-source, public service that employs blockchain technology to enable smart contracts and cryptocurrency trading without the involvement of a middleman, but where did it come from? The cryptocurrency world is a young sector that essentially started with the inception of Bitcoin BTC $28,267 in 2009. Bitcoin came into play as an experiment offering two components — an internet-based asset and the underlying blockchain technology on which that asset runs. From there, people used online currency and blockchain concepts to develop other projects and investments.
Ethereum offers developers a lot of capabilities for creating solutions on it. History of ETH, Ether ETH $1,549, the Ethereum blockchain’s native coin, pays for activity. Coin values fluctuate on crypto exchanges. ERC-20 tokens and other Ethereum-based assets require ETH for transaction fees. Solidity is the language behind Ethereum. The Ethereum Foundation is a non-profit organization in charge of Ethereum. Unlike Bitcoin, whose creator remains a mystery, Ethereum’s background is more transparent. Although Vitalik Buterin and others co-created Ethereum, the backdrop of the vast blockchain requires further explanation.
Beginning stages of Ethereum
Many people helped create the Ethereum blockchain, but Vitalik Buterin was the first to write a white paper about the idea in November 2013. After Buterin’s beginning work, other intelligent people jumped on board in different ways to help finish the project. Amir Chetrit, Gavin Wood, Charles Hoskinson, Anthony Di Iorio, Jeffrey Wilcke, Joseph Lubin, and Mihai Alisie are all considered co-founders of Ethereum.
Early in 2014, Buterin brought the idea of the blockchain project to the public’s attention at a Bitcoin meeting in Miami, Florida. This is how Ethereum became known. Later that same year, the project raised money through an initial coin offering (ICO). History of ETH: Millions of dollars worth of ETH were sold for cash that could be used to build the project. More than $18 million worth of ETH was bought and paid for in Bitcoin between July 22 and September 2, 2014.
Even though ETH coins could be bought in 2014, the Ethereum blockchain didn’t go live until July 30, 2015. People who bought ETH had to wait for the blockchain to go live before moving or using their ETH. Why did someone make the Ethereum blockchain in the first place? That could be one reason the Ethereum blockchain makes building on top of it easier and connecting to other systems.
Ethereum’s stages of progress
The Ethereum blockchain was born in July 2015, but its development took years. Frontier was the initial Ethereum blockchain, launching intelligent contracts and PoW mining. History of ETH: The original launch allowed people to set up mining equipment and network-building. Ethereum has seen multiple modifications since its introduction, including Byzantium, Constantinople, and the Beacon Chain. Each blockchain upgrade changes certain things. For instance, Beacon Chain introduced Ethereum 2.0, a consensus layer that switched from proof-of-work to proof-of-stake (PoS) consensus. Byzantium and Constantinople both changed the Ethereum network, including reducing mining payouts to three ETH from five (after Byzantium and preparation for PoS).
Moving to Proof of Stake (PoS) to make the blockchain bigger is a significant change to the Ethereum blockchain. Over the years, many groups have used the Ethereum blockchain to build apps. Still, the network had trouble when there was a lot of traffic, like when CryptoKitties were popular in 2017—digital cats that could be collected based on the Ethereum blockchain. In 2020 and 2021, decentralized finance (DeFi) projects built on Ethereum got much attention. This brought Ethereum’s problems with scalability to the surface, as high network fees plagued participants. The move by Ethereum to the consensus layer and Proof of Stake (PoS) is meant to make the famous blockchain more scalable, but it will happen in steps.
The DAO hack
Some of Ethereum’s blockchain updates were planned, while events or conditions triggered others. The decentralized autonomous organization (DAO) fork attempted to avoid a hack. DAOs are a broad crypto industry idea, while The DAO was early. History of ETH, An Ethereum-based decentralized independent organization fund, the DAO democratized asset allocation in 2016. The only thing users need to trust in a DAO is its code, which is visible and verifiable to everybody.
In summary, interested parties donated ETH to a DAO fund and received DAO tokens. These coins could vote on DAO capital allocation at the time. Given its US dollar price, the DAO received $150 million in ETH in 2016.
In 2016, the DAO was hacked, losing approximately 3.6 million ETH. Ethereum users are divided on how to handle it. A community member wants to change the Ethereum blockchain to undo the attack. Community members opposed the play, saying it would violate blockchain technology’s immutability. Most Ethereum users supported a hard fork of the blockchain in response to the breach. The hard fork created two blockchains with two native assets. After the incident, Ethereum branched off to recover assets. This split asset and blockchain is now called Ethereum. What is now known as Ethereum Classic ETC $14.69 is the original Ethereum blockchain.
The Ethereum Merge upgrade: Transition from PoW to PoS consensus
Ethereum founders and developers suggested and implemented merging the Beacon Chain’s consensus layer with the Ethereum mainnet execution layer to address environmental concerns related to PoW mining. What happened to Eth2? The Ethereum Foundation renamed Eth2 to the consensus layer to prevent scams like trading ETH for ETH2 tokens. Just because Eth1 handles transactions and execution doesn’t mean there are two Ethereum networks. Eth2 will maintain proof-of-stake consensus, but Ethereum will be the only network. Do you think Ethereum mining is dead following the merger?
Even though the Merge worked perfectly, Chandler Guo, a Chinese miner, sided with miners and split the Ethereum blockchain to keep the Proof of Work (PoW) consensus method. This new version of Ethereum is called ETHW, which stands for “proof-of-work Ethereum.” Miners will still have to solve complex math problems to get ETH rewards, just like Ethereum Classic.
Ethereum price history
Ethereum has had a turbulent pricing history. ETH traded below $2.00 early on. In early 2017, ETH dropped below $15.00 per unit and rose above $1,400 per coin in January 2018. After that high, ETH fell below $100 in succeeding months and years. The asset recovered to pass $4,000 in 2021. The post-merge Ethereum price dropped by 55% against BTC.
Ethereum’s future after the Merge
Ethereum’s market capitalization and wide range of blockchain-based solutions show its importance in crypto. Scaling has been challenging for the network. The transition to the consensus layer tries to address its difficulties. Only time will tell about the results. However, Vitalik Buterin stated that the Merge would involve four further phases: The Surge, The Verge, The Purge, and The Splurge. However, future improvements may help Ethereum manage regulatory challenges over digital assets and public blockchains.
