The History of Ethereum

In the early stages of crypto market formation, an aspiring programmer with Canadian and Russian roots, Vitalik Buterin, conceived an idea that would inevitably change the entire world of cryptocurrencies This idea was the basis for creating Ethereum, a platform that revolutionized the concepts of decentralization, smart contracts, and decentralized application development. In this article we described the history of Ethereum's emergence, its features, and its working principle.

The rise of the Ethereum

The story of Ethereum began in 2013 when Russian-Canadian programmer Vitalik Buterin, also known as the co-founder of Bitcoin Magazine, together with Dr. Gavid Wood, presented the concept of the Ethereum blockchain platform.

The idea was based on creating a platform that would be capable of creating and running blockchain-based smart contracts.

A smart contract is a program code on the blockchain that automatically executes the terms written in it without the need for third-party mediation.

The founders of Ethereum have indicated that cryptocurrencies should not be limited to the role of means of payment. They should also enable the exchange of resources between multiple independent web applications operating within a single peer-to-peer network.

In April 2014, Gavin Wood formally described Ethereum in his yellow book. The project was informally referred to as "Bitcoin 2.0" or "the next generation of Bitcoin".

In the second half of 2014, an initial public crowdfunding campaign was announced to raise funds for the development. It managed to raise 31,591 Bitcoins, which was equivalent to $18,439,086 at the time.

The first Ethereum blockchain was formed on July 20, 2015. This created 72,009,995 ether distributed among 8903 addresses. Subscribers received 60,102,216 ethers.

The project was launched in test mode on July 30, 2015, and just nine months after that, the Homestead protocol was published, allowing the platform to operate at full capacity.

Features of Ethereum:

• Smart Contracts

One of the main features of Ethereum is smart contracts. They allow you to programmatically set the terms and rules of transactions, automatically execute them and ensure the security of interaction between participants.

Let's take as an example the creation of a crowdfunding application based on a smart contract. In this app, a goal would be set to collect at least 10 ethers from each of 500 or more participants within a month. In return, 1 share will be given to each participant in the business project.

If the goal is reached, the collected funds will be automatically sent to the wallet of the project owner, and each contributor will be given a share according to the size of their contribution. If the goal is not reached within the set time, the collected ethers will be automatically returned to each depositor.

Thus, based on the smart contract, a transparent and automated process of fundraising for the project is created, guaranteeing participants a proportional distribution of shares in case the goal is reached. In case the goal is not reached - the funds are returned to the contributors, ensuring the safety and security of the crowdfunding operation.

• Decentralization Ethereum is built on a decentralized blockchain network where there is no single centralized control. All participants in the network have equal rights and can contribute to the processing and validation of transactions.

• Ethereum Virtual Machine (EVM) EVM is a virtual machine that allows you to run and execute smart contracts on Ethereum. It is an independent platform that provides a uniform interface for developers. EVM ensures that all transactions and smart contracts on the Ethereum blockchain are executed according to the established rules as per the smart contract code.

What is gas on the Ethereum network?

Gas is the unit of computational work of transactions or smart contracts performed by miners at their own expense to keep the Ethereum network running.

One unit of gas separates the computational value of the Ethereum network from the ether. These units are unchanging, they depend on the end values that the miner used to execute the transaction. The gas used is directly proportional to the complexity of the transaction.

Now let's talk about how the Ethereum network works

Ethereum is powered by the Proof-of-Work (PoW) protocol, which requires miners to solve complex problems to add new blocks to the blockchain. PoW is a consensus algorithm. This algorithm helped to solve the problem of double-spending (when the same coins are used twice in the same period) and other abuse.

In simple words, Proof-of-work (pow) is when we build mining farms to mine crypto.

However, in September 2022, Ethereum moved to the long-awaited PoS (Proof of Stake) protocol. This was done to make the ETH cryptocurrency more environmentally friendly. Since currently about 97% of all miners are mining ether, it is very harmful to the environment.

In simple words, Proof-of-stake (pos) is when we stake a cryptocurrency to mine it. Proof of Stake (PoS) allows mining or validating transactions in blocks depending on the number of coins in the miner's possession.

What is the meaning of the Ethereum logo and symbol?

The original Ethereum logo was designed by Vitalik Buterin. It included two turned sums of Σ (sigma from the Greek alphabet).

The final logo design based on this emblem is shaped like a rhombus with eight faces surrounded by four triangles. Similar to other currencies, Ethereum also requires a standard symbol in Unicode so that applications and websites can display the currency correctly. The most common character for ether is Ξ.

To summarize:

Ethereum has become an integral part of the cryptocurrency world and blockchain technology. It provides a powerful tool for creating and deploying smart contracts, decentralized applications, and issuing tokens. The stability, security, and constant development of Ethereum attract many developers, investors, and entrepreneurs, creating new solutions and innovations in financial technology.