Module Two: History of Ethereum 

Lesson 1: Early Days of Ethereum

Many believe that the Ethereum network took cryptocurrency to the next level. Ethereum has a proven track record that has earned it the trust of a lot of people.

This Ethereum History module covers some of the main events.

Ethereum was first categorized in 2013 by Vitalik Buterin, a computer technology expert. Buterin is a Canadian programmer and writer who is best known as one of the co-founders of Ethereum.

Mr. Buterin described the Ethereum protocol and smart contracts architecture in a white paper. Before releasing the white paper, he was associated with Bitcoin.

During this involvement, he discovered several flaws in the Bitcoin network; he then started work on a better system to address those flaws.

Buterin intended for Ethereum to be a distinguished platform, giving more power to users, and helping them to enhance their businesses and personal lives in a completely different way. It was January 2014 when Vitalik activated the Ethereum network.

Lesson 2: Dr. Gavin Wood

Buterin chose Dr. Gavin Wood, and two other computing professionals, to partner with; together, in the early years, they advanced the network.

The Ethereum Yellow Paper, which detailed the operation of Ethereum, especially the EVM (Ethereum Virtual Machine), was published by Dr. Wood. According to the EVM, Ethereum was to be implemented in seven distinct computer languages; including JavaScript, Python, C++, Rust, Go, Java and Haskell.

With multiple languages, more developers could readily join the network to help create and deploy apps using smart contracts.

This scenario increased optimism for Ethereum; Vitalik successfully managed to extend cryptocurrency from just a platform for sending cash to an enterprise into a mechanism for transactions from businesses to individuals. There was no doubt that Ethereum was poised for long-term growth.

Lesson 3: Ethereum Foundation

Along with the challenges of developing code for cryptocurrency networks, there is also a financial requirement.

Operating a cryptocurrency blockchain can be rather complex and resource intensive. Especially for those just starting out, since there is not much exposure or trust established.

It was not easy for Ethereum, when it announced the first pre-sale of its ether tokens (native currency), to get such a large network of investors, developers, miners, and other stakeholders, on board.

During the previous two years associated with Bitcoin, there were numerous internet attacks and Ponzi schemes. It was imperative and urgent to seek a solution.

The Ethereum Foundation (or EF) was established as a non-profit organization dedicated to supporting Ethereum and associated technologies. The EF is not a company, or even a traditional non-profit.

The establishment of the Ethereum Foundation helped Ethereum navigate the complex technical, legal, and other connotations of its pre-sale offering in June of 2014.

Lesson 4: Ethereum Distribution

It was July 1st 2014 when Ethereum distributed the first allocation of Ethers through a 42-day pre-sale offering; it yielded 31,591 Bitcoins; valued at about $18,439,086; this money was used to meet legal requirements and helped to motivate early developers of the Ethereum network.

The Ethereum network attained stability at its earliest stages of development. Most other cryptocurrencies mainly operated without established leadership. The Ethereum Foundation took responsibility as the driving force behind the cryptocurrency.

Ethereum demonstrated that it learned valuable lessons from Bitcoin’s anonymity and the impending uncertainty created by its followers.

Lesson 5: Ethereum Development

Ethereum’s pre-sale was so successful that the team quickly moved to more widely demonstrate the workings of the new model. The primary goal was to prove to naysayers that smart contracts were a good idea.

Ethereum Development was further formalized as ETH/DEV, a non-profit organization that administers all development in Ethereum and consisting of Gavin Wood, Vitalik Buterin, and Jeffrey Wilcke as the lead directors.

In 2014, interest in the Ethereum network grew at a fast pace. Several Proof-of-Concept (PoC) releases, for public testing, were established by leaders of the network.

During the early days, the Ethereum blog was also used by the lead team to keep the public informed and interested in projects on the network.

As interest in Ethereum grew, developers focused on testing their apps to further establish whether the system would bring consistent results.

It was yet to be firmly established how a new level of cryptocurrency could work on top of the core of Ethereum.

Subsequently, many developers who later instituted ideas for creating new cryptos expressed that they were close followers of the Ethereum leaders, even from the very beginning.

Lesson 6: DEVCON-0

DEVCON-0 (the developer conference), was the first event that was dedicated entirely to Ethereum, the conference was conducted in Berlin by ETH/DEV, in November 2014.

The Ethereum lead team organized DEVCON-0 with a goal of bringing together developers and demonstrating new occurrences in cryptocurrency.

Early crypto followers were enthusiastic that the dedication and focus of the Ethereum team would ultimately make it among the best of cryptocurrencies in future markets.

The conference was used by Ethereum’s leaders in attempts to fully understand what developers needed to spearhead next level projects.

Being developers, the Ethereum lead team understood that issues needed to be identified that directly impacted the developer community and would make many of them contribute to help expand the network.

DEVCON-0 contributed extensively to implementing a framework that increased anonymity, network security, and reliability. It also facilitated better relationships between developers and the network. Developers were considered crucial to future growth of the network.

Lesson 7: Ethereum Development Grants

The Development Grants Program was announced by Ethereum in April of 2015. This program provided needed funding to developers who contributed to the platform. This was one of the solutions crafted at the DEVCON-0 conference.

The lead Ethereum team had identified, with consideration, that many of the developers failed to make meaningful contributions due to a lack of adequate funding.

These development grants created an innovative way to increase participating developers and allow them to focus on the work without the need to worry about funding.

Several experts were invited to study the apps that developers contributed to the network. These experts extracted helpful ideas that would advance the Ethereum network.

The top developers were tapped by the Ethereum team to enhance value for the community. Even today, the Development Grants Program remains a crucial component of Ethereum’s success.

Lesson 8: Olympic Frontier

It was during 2014 and 2015 when Ethereum released several proof-of-concepts to developers; this resulted in an open testing system called the Olympic.

The purpose of Olympic is to reward those people who try to test the limits, including hacking attempts, of the Ethereum blockchain during the pre-release period.

The implementation of Olympic was among the early efforts of Ethereum to ensure that the network was tamper-proof; another goal was to guarantee users extra safety, and security, of their ethers. The Olympic Frontier Pre-Release was posted by Vitalik Buterin on May 9, 2015.

Lesson 9: Bounty Program

Ethereum went even further the following year and created the Ethereum Bounty Program that provided rewards in Bitcoin to developers if they could identify vulnerabilities.

According to Ethereum.org, "The max reward of the Bounty Program is now $250,000 (paid out in Ethereum or D-A-I) for vulnerabilities in scope."

Of course, with a $250,000 bounty, the search for vulnerabilities in Ethereum became a core part of the network and helped to guarantee enhanced security to all its users at a time when more users were starting to join and get associated with Ethereum.

Expert security firms were tapped to work with this security audit created by the bounty program. They were to check all structures to identify and close any and all loopholes on the network; including the Virtual Machine, proof of work, and other areas.

The security audit was further extended to address potential legal implications that targeted identifying areas and considerations that could impede growth.

Lesson 10: Frontier Launch - DEVCON-1

Following the success of Olympic testing, Frontier, a live simplified implementation of the Ethereum network, was launched. Frontier was mostly intended for technical users, especially developers.

The Ethereum Frontier Network was implemented in June of 2015; the network targeted start-up developers with the intention of creating decentralized apps and smart contracts. 

Developer coin miners began joining and helped to secure the Ethereum network; they also earned revenue by confirming transactions. The developers were instrumental in providing testing prior to launching the main version.

Ethereum had another developer conference in London around the end of 2015. It was a five-day event and included over 100 presentations, speakers, and important discussions concerning the security of blockchain technologies.

Thought leaders, developers, business executives, and investors interested in blockchain technology attended this conference. Global corporations like Microsoft, IBM, and UBS, were also present. Microsoft began offering the Ethereum blockchain as a service on its Azure cloud computing service.

Partly due to this conference, Ethereum was getting a lot of worldwide interest and was considered an industry game changer; as such, Ethereum continued to gain value and trust from developers and users.

Lesson 11: DAO Attack - Ethereum Soft Fork

In 2016, Ethereum was gaining momentum and working smoothly towards the realization of the smart contracts. This was a great consideration because it was part of the core that formed the network establishment. The decentralized autonomous organization (DAO) project went on through the planning and funding phases when the attack happened.

As the Ethereum team was working on the DAO, an attacker was also using the same structure to create an alternative DAO (later given the term DAO CHILD).

Because DAO CHILD had the same structure as the main DAO, the attacker managed to break into Ethereum and steal $150 million. This directly affected Ethereum’s value, and it went down 15-fold. But the Ethereum troubles were far from over. The community entered into a serious debate as it tried to come up with the best solution to the issues.

Ultimately, they agreed to implement a soft fork. This involved breaking Ethereum into two (Ethereum and Ethereum Classic).

While the impact of the fork remains a hot-button issue, Ethereum learned its lessons and appears set to prevent a repeat of such attacks.

Lesson 12: Ethereum Price Changes

Though the price of Ethereum was sluggish in the first two years, it has recently shot up and become the second most valuable cryptocurrency by market capitalization. Even with huge disruptions such as the DAO attack and recent burning of ICOs in China, the price of Ethereum has weathered the setbacks to grow to more than $400/ETH by the last quarter of 2017.

With the Ethereum Foundation well set to implement the new proof-of-stake algorithm, there is no doubt that the price and value of ether will go to higher levels. The history of Ethereum demonstrates the highly resilient network that works hard to win the trust of, and guarantee the best, to everyone who utilizes it.

The Ethereum lead team appears ready to deliver even more proof that the original vision can be achieved. They are progressively working on new features, partnerships, and targets that could easily make Ethereum the best cryptocurrency in the world in future years.

Lesson 13: Who Created Ethereum?

Ethereum was created by Vitalik Buterin, a young Russian-Canadian developer from Toronto.

Vitalik developed an interest in Bitcoin around 2011 and started thinking of how he could use the technology to offer better services and products.

He was convinced that with proper support and progressive development, blockchain technology would provide services well beyond financial realms.

His work made him get recognized as a Thiel Fellow in 2014. He was also awarded $100,000 for his work.

One of the most notable things about Vitalik is his team work capabilities. Though his idea was noble, he appreciated that it was impossible to implement it on his own.

Therefore, he sought the help of, and brought onboard, experts in cryptography, applications development, and finance to become part of the core team. This capability is what has made Ethereum grow stronger and better, even in times of scandal.