The History of Ethereum: The World’s First Programmable Blockchain

How Ethereum Started header banner

What is Ethereum

Ethereum is described by the organization as “the world’s programmable blockchain,” positioning itself as an electronic, programmable network with many applications. In contrast, the Bitcoin blockchain was created only to support the bitcoin cryptocurrency. The Ethereum platform was founded with broad ambitions to leverage blockchain technology for many diverse applications both in the digital and real world.

  • Uniswap
    A decentralized exchange facilitating trades from coin to coin.
  • Axie Infinity
    A play-to-earn NFT game that runs on the Ethereum blockchain where players collect in-game NFT creatures called Axies and put them against each other in battles.
  • Chainlink
    A decentralized network that securely translates data from the real world to smart contracts on the blockchain and back via oracle software.
  • Aave
    An open-sourced lending protocol on the Ethereum blockchain where lenders contribute various Ethereum-based assets into liquidity pools to earn rewards, while borrowers can place approved assets up for collateral to borrow against.
  • OpenSea
    A marketplace for buying and selling NFTs, including Axies, unstoppable domains, digital art, and much more.

How is Ethereum different from Bitcoin?

While there are many similarities between Ethereum and Bitcoin, there are also significant differences. Here are a few:

  • They are based on different security protocols: Ethereum uses a “proof-of-stake” system as opposed to the “proof-of-work” system used by Bitcoin.
  • Bitcoin allows only public (permissionless or censor-proof) transactions to take place; Ethereum allows both permissioned and permissionless transactions.
  • The average block time for Ethereum is significantly less than Bitcoin’s: 12 seconds versus 10 minutes. This translates into more block confirmations, which allows Ethereum’s miners to complete more blocks and receive more Ether.
  • It is estimated that in 2021, only half of the Ether coins will be mined (a supply of more than 90 million tokens), but the majority of Bitcoins already have been mined (its supply is capped at 21 million).
  • For Bitcoin, the computers (called miners) running the platform and verifying the transactions receive rewards. Basically, the first computer that solves each new block gets Bitcoins (or a fraction of one) as a reward. Ethereum does not offer block rewards and instead allows miners to take a transaction fee.

Ethereum Timeline History

2013 — Whitepaper released

The introductory paper, published in 2013 by Vitalik Buterin, the founder of Ethereum, before the project’s launch in 2015.

2014 — Yellowpaper released & Ether sale

The Yellow Paper, authored by Dr. Gavin Wood, is a technical definition of the Ethereum protocol. Ether also officially went on sale for 42 days. During this time, you can own Ether using Bitcoin as payment method.

2015 — Frontier & Frontier thawing

Frontier was a live, but barebone implementation of the Ethereum project. It followed the successful Olympic testing phase. It was intended for technical users, specifically developers. Blocks had a gas limit of 5,000. This ‘thawing’ period enabled miners to start their operations and for early adopters to install their clients without having to ‘rush’.

2016 — Several protocol changes and network upgrades for security

The Homestead fork that looked to the future. It included several protocol changes and a networking change that gave Ethereum the ability to do further network upgrades.

2017 — The Byzantium fork

The Byzantium fork reduced block mining rewards from 5 to 3 ETH, delayed the difficulty bomb by a year, added ability to make non-state-changing calls to other contracts, and added certain cryptography methods to allow for layer 2 scaling.

2019 — The Constantinople & Istanbul fork

The Constantinople fork ensured the blockchain didn’t freeze before proof-of-stake was implemented, optimized the gas cost of certain actions in the EVM, and added the ability to interact with addresses that haven’t been created yet.

2020 — The Muir Glacier fork, Staking was deployed & Beacon Chain genesis

The Muir Glacier fork introduced a delay to the difficulty bomb. Increases in block difficulty of the proof-of-work consensus mechanism threatened to degrade the usability of Ethereum by increasing wait times for sending transactions and using dapps.

2021 — Berlin, London, Altair, and Arrow Glacier network upgrades

The Berlin upgrade optimized gas cost for certain EVM actions, and increased support for multiple transaction types.

2022 — The Gray Glacier network upgrade

The Gray Glacier network upgrade pushed back the difficulty bomb by three months. This is the only change introduced in this upgrade, and is similar in nature to the Arrow Glacier and Muir Glacier upgrades. Similar changes have been performed on the Byzantium, Constantinople and London network upgrades.

Ethereum’s future

Ethereum is a significant player in the crypto space, as evidenced by its market capitalization and the vast array of solutions that entities have built on the Ethereum blockchain. However, the network has faced difficulty in scaling. Its transition over to Eth2 aims to solve its challenges. Only time will tell regarding the results, though, and the transition is expected to take some time to play out.

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