11 Critical Moments in Ethereum’s History That Made the Number 2 Blockchain

Ethereum's story began over a decade ago with a twinkle in the eye of its creator, Vitalik Buterin, a gangly mathematician frustrated by Bitcoin's limitations who believed he could do better with blockchain.

Rather than cryptocurrency being just a financial asset, Buterin envisions extending blockchain technology to a “global computer” — one that hosts decentralized applications, powered by smart contracts, with minimal human intervention or trust assumptions.

Fast forward to today, and Ethereum is the second largest crypto asset in the world, underpinning a trillion dollar ecosystem of peer networks. It is the preferred block for many of the world's largest asset managers, as well as hundreds of thousands of daily users on Layer 1 and millions of connected L2s.

Here are 11 of the most important moments in Ethereum's history and some of the biggest updates to look forward to.

Ethereum White Paper – 2013

Buterin was originally a Russian-born engineer who immigrated to Canada with his father, his family, in his late teens.

Buterin worked as a crypto blog writer and received payments in BTC in the early 2010s, although he was too young to mine Bitcoin or invest in the property.

Recognizing his talent as a leading thinker and author in the field, he was approached by Romanian Bitcoin enthusiast Mihai Alice, and the pair launched Bitcoin Magazine in 2012.

A year later, in 2013, while still only 19 years old, Buterin published an Ethereum white paper describing it as “the next-generation smart contract and decentralized application platform.” He told Business Insider that his goal was to fix Bitcoin's “very limited functionality.”

“Think about the difference between things like a pocket calculator and a smartphone, where a pocket calculator does one thing and does one thing well, but of course people want to do all these other things. And if you have a smartphone, you have a pocket calculator as an app on your smartphone. Playing music as an app You have a web browser as an app and everything else.

Later, he was awarded $100,000 by the Peter Thiel Fellowship to start working on the Ethereum platform.

Red Wedding – 2014

Before Ethereum became what it is today, it suffered some growing pains and conflicts, the first major one being the “Red Wedding” – the future of the network was placed in Buterin's hands.

As Camilla Rousseau records in her book The Infinite Machine, a group of co-founders gathered in Jugue, Switzerland on June 7, 2014, to sign the document making Ethereum a for-profit company.

But instead of signing the deal, tensions over Charles Hoskinson's management style, Amir Cherit's contributions to the project, and Ethereum's future direction have reached a boiling point.

The call on which way Ethereum should go was left to Buterin, who got rid of Hoskinson (who went on to create Cardano) and Chetrit and established Ethereum as a non-profit foundation rather than a company.

Ethereum co-founder Joe Lubin told the magazine in 2023, “We had differences of opinion, and sometimes those differences of opinion were famously…

ICO and Launch – 2014

The next major step for Ethereum was to raise capital during its initial coin offering in 2014 and to raise public awareness by selling millions of dollars worth of ETH for the development of the project.

Between July 22 and September 2, 2014, the ICO saw investors withdraw more than $18 million worth of ETH, which they paid for in BTC.

The Ethereum blockchain and its native token, ETH, were officially launched on July 30, 2015.

ETH hit the market at a price of $0.31 per ETH token, showing a return of 1,057,000% for any lucky ones to reach a price of $3,275 to date.

No one knows for sure, but Ethereum and Consensys co-founder Joe Lubin is said to have invested more in ICOs than anyone else.

The DAO hack and Ethereum Classic – 2016

Arguably the deadliest event in Ethereum history was the now infamous DAO hack, an exploitative, decentralized autonomous organization in which hackers stole over 3.6 million ETH.

The attack sent shockwaves through the market, with the price of ETH dropping from $20 to $9 in less than 36 hours.

Divided over how to proceed following the attack, the Ethereum community was divided into two main camps: one that wanted to continue, business as usual, and the other that wanted to roll back the network before the attack to fix the problem.

There was a philosophical divide: should blockchains be immutable records, code as rules, or can their leaders simply change history to delete inconvenient parts? There were passionate arguments on both sides, and the debate about whether Ethereum took the right path continues to this day.

In the end, the majority of the Ethereum community voted to restore the block chain and make the network stronger to recover assets lost to the exploit.

One of the strongest forks is the proof-of-work blockchain, which bears the name Ethereum to this day, and the other is called Ethereum Classic – technically the original version of the Ethereum blockchain, which remains the proof-of-work blockchain.

CryptoKitties Breaks Ethereum – 2017

One of the strangest things that happened to Ethereum was the arrival of the invincible token collection CryptoKitties, which more or less broke the network.

Launched by Vancouver-based venture studio Axiom Zen in October 2017, Cryptokitties was designed as an earnest and fun experiment in blockchain tech that would allow users to collect and mine various types of NFTs.

In early December, CryptoKitties went giga-viral, sending prices for NFTs up to $170,000. Interest and activity around Kitties is so high that they are blocking the Ethereum network from sending payments.

In response to the sudden network outage, a team of Ethereum developers from projects including MetaMask and Infura teamed up to deploy rapid optimization and build long-term security solutions for the network.

While crypto enthusiasts are divided on the quality and value of the CryptoKitties project itself, there is no denying its impact on the development of the Ethereum network or the development of NFTs.

DeFi Winter – 2020

The summer of 2020 – commonly referred to as the “DeFi summer” by crypto enthusiasts – marked a turning point in crypto history, with Ethereum suddenly becoming the home of an entirely new financial movement.

New users flocked to the Ethereum network as a result, all eager to try out the hundreds of new protocols popping up on the network. This has led to massive growth in borrowing, lending and trading of digital assets across hundreds of protocols, many of which are now the backbone of today's multi-billion dollar DeFi sector. Much of the activity was done by “productive farmers” who were rewarded with tokens for their actions. Ponzinomics was a clever way to snap the flywheel or unsustainable.

Big-name Ethereum-based DeFi protocols, including Ave and Compound, which launched during the summer of DeFi, are now locked in tens of billions of dollars in capitalization and have hundreds of millions of daily transaction volumes.

There's also been an explosion in food-themed DeFi, most notably SushiSwap, which famously forks Uniswap and “vampires” it for liquidity and users. After Chef Nomi invested $14 million in SUSHI, he handed DX over to a young investor named Sam Bankman-Fried.

Package Roadmap Update – October 2020

According to Ethereum developer Marius van der Wijden, one of the best things about Ethereum is that the roadmap itself is not extremely rigid or fixed in place.

He told the magazine that the community holds constant “what to do and what to prioritize next” debates, which are crucial to keep Ethereum decentralized and untethered.

This dynamic appeared in October 2020 when Tyrion Buterin dropped his long-awaited Eth 2.0 roadmap, which planned to scale Ethereum monolithically using OG sharding — like 64 Ethereum blockchains all running together.

But Buterin started to emerge as an alternative solution in the form of this sharding (implemented later in recent projects) and in the form of ZK-rollups, which take layer 2 performance and computation from the main chain but still inherit it. Security.

As research and development suggests that this may be viable as a future direction, it has published a new “package-based roadmap.”

The new package roadmap ensures that the Ethereum network will be built with an optimal base layer of blockchains that will take the lion's share of layer-2 networks, such as Polygon, Optimum, and Arbitrum, to name a few. Optimistic rollups were seen as the quickest solution to implement, while ZK-rollups were seen as the endgame.

“They used a lot of technological breakthroughs that we didn't have 10 years ago today. So, like, a sample of data availability… it wasn't before 2017 – 2017 was when I published my first work. They were optimistic and there were no ZK-rollups, just before around 2019,” Buterin in 2022. He said while speaking at a press conference at ETH Seoul.

Stock Confirmation, Merger – September 2022

Van der Wijden considers the merger to be a “very important” moment in the history of the Ethereum network.

The merger was completed on September 15, 2022, and marked a shift from an energy-intensive proof-of-work scheme to a more environmentally friendly proof-of-stake scheme.

“This was a great effort from many people, all working together for a common goal – I'm glad we did it. After knowing some of the numbers around electricity, carbon consumption and e-waste, I am proud to be a part of that effort.

The integration reduced Ethereum's energy consumption by 99% and brought about a significant change in the network's tokenomics.

Denkun Update: Blobs and Sharding – March 2024

The next milestone for Ethereum is March 13, 2024, when the Denkun update is implemented on the network.

The Denkun update notably introduced nine different Ethereum Improvement Proposals (EIPs), including EIP-4844.

EIP-4844 introduces proto-danksharding, a method that allows “blobs” of transaction data to be stored individually and temporarily, significantly reducing the fees for block data on Ethereum layer-2 networks.

Denkun has shown a significant reduction in the cost of executing transactions on Ethereum layer-2 networks such as Arbitrum and Optimism; However, the side effect is that the ETH payments burned on the main network have fallen significantly upon activation.

eOracle Contributor Matan C tells the magazine about the most important development for Ethereum, as it is the integration package and the expansion of Layer-2 solutions.

“What excites me most about the future of Ethereum is the potential to bridge the gap between these performance layers and the real world. Connecting onchain activities with offchain data and computation opens up a myriad of new use cases.

Blackrock will choose Ethereum – March 2024

One of the biggest institutional milestones for Ethereum took place on March 20, when asset management giant BlackRock launched a tokenized fund on the Ethereum network.

The BlackRock USD Institutional Digital Liquid Fund, or BUIDL for short, is a money market fund that is backed by cash and US Treasury bills and offers investors daily returns.

The move was seen as a major confirmation of the reliability and integrity of the Ethereum network by the world's largest asset manager.

The BUIDL fund now boasts a market capitalization of $517 million, which saw a volume of over $116 million last month, according to data from rwa.xyz.

BlackRock CEO Larry Fink, who initially said he was “bullshit” on crypto assets, has since changed his tune and sees crypto, specifically Ether and Bitcoin, as an early asset class.

“I have been a big believer in the past two years [in ETH]” Fink told CNBC on January 12.

Launch of spot ETFs – July 2024

First approved by the SEC on May 23, the list of nine position Ether ETFs officially launched on July 23.

The introduction of spot funds marked the first major step towards legalizing ETH as an institutional-grade asset.

Like Bitcoin ETFs, the startup has been muted by investors selling their holdings in Grayscale, which has a fee 10x higher than other ETFs for the converted Grayscale Ethereum Trust (ETHE).

As of press time, the funds have generated a net outflow of $390 million. ETHA inflows are slowing, however, and ETF Shop President Nate Geracchi told BlackRock ETHA's three-week run of inflows already makes it the sixth most successful ETF launched this year.

Next steps: Pectra, Verge and Splurge

The next major step on the roadmap is an update to Pectra, something van der Wijden says will include “enhanced improvements” to the Ethereum virtual machine, which will enable new use cases like trust pools and make developers' lives easier.

Following Pektra comes the Verkle, or Verge as Vitalik likes to call him.

“With Verkle, we're changing the way we store the state — all the bills, invoices, contracts — to simplify it. [prove] Van der Wijden says your balance was x in block y.

Van der Wijden describes cleanup precisely as: new improvements related to removing old functionality that is no longer useful for the network.

“When Ethereum started, they made a lot of assumptions about how things would work, and many of them turned out to be correct, but some of them didn't go the way they expected,” van der Weijden explained.

“Therefore, we're slowly cleaning up some of the untapped paths, such as disabling Selfdestruct (which was done in the last update) or, in the future, removing bloom filters in invoices (which makes cross-syncing faster). ” he adds.

Splurge defines itself on a top-line level, at the very least, with new features that the Ethereum community is willing to “splurge”.

“Ethereum will contain some of the previously mentioned changes that make it easier and more beautiful to use. These changes will probably be shipped with other improvements if we feel there is enough space – complexity – in the upcoming hard fork,” van der Wijden says.

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