Since Satoshi Nakamoto created Bitcoin in 2008 with such a whitepaper, cryptocurrencies have had a significant impact on society worldwide. Ethereum is one of many blockchains that were developed as a result of the popularity and restrictions of Bitcoin. Beyond decentralised financial services, Ethereum’s popularity and growth are expanding to include use cases for digital artifacts and eventually tokenized versions of current legal documents.
During the 2021 bull run, ETH’s price peaked at a little under $5,000 per token. Within months of the recent bearish trend in the cryptocurrency sector, around 74% of the total market value was destroyed. With Ethereum’s much-awaited Merge, there is a chance to get the market moving again. Let’s take a look back at some of the major developments in Ethereum history before the much-anticipated shift.
Development and Launch
In 2013, Vitalik Buterin following his team came up with the idea for Ethereum. As a 17-year-old programmer, Buterin co-founded Bitcoin Magazine in 2011, where he developed his love for cryptocurrencies. In those early years, the main use of Bitcoin was for money transfers. Buterin was interested in enhancing these restricted capabilities. As a result, early versions of the Ethereum whitepaper from 2013 sought to trade more than simply digital currency.
In a preliminary token sale that had no cap on the amount of ETH that each buyer could get, the Ethereum team collected $18 million in 2014. However, the price was previously fixed at one BTC for 2,000 Ethereum in a 2-week sale. On July 30, 2015, the Ethereum network became operational. Check out immediate edge to keep an eye out for the merger to happen and to witness the votality in the marketplace.
The 2016 DAO Hack
Early Ethereum has its share of problems. The DAO was hacked on June 17, 2016, which was one of the project’s first difficulties. One of the first decentralised autonomous organisations was the DAO. At the time, it was one of the largest initiatives on the Ethereum blockchain, and its goal was to involve the community in the investment process by allowing them the freedom to choose how to spend cash.
A bug in the coding finally led to a hack on the DAO that cost 3.6 million ETH. And over 30% of The DAO’s whole ETH treasury was also represented by the ETH that was stolen. The hacker was able to slowly transfer assets to recently founded DAOs thanks to the flaw.
The Ethereum team had to make a decision, so they chose to divide the blockchain and start a hard fork with it. As a result, Ethereum Classic and the current version of Ethereum were created. The main distinction between the two blockchains is that while the hack was totally undone on Ethereum, it is still visible on Ethereum Classic. On July 20, 2016, the lost money—about $40 million at the time—was returned to investors.
The cryptocurrency crash in early 2018
When the price of Bitcoin (BTC) hit an all-time high of $19,783 on Dec 17, 2017, the rest of the cryptocurrency as well as Bitcoin had a significant upsurge in 2017. Initial coin offering (ICOs) that aimed to profit from the financial gains made by initial investors in projects like Ethereum, which served as the current gold standard for success, characterised this time period.
In 2017, many people predicted that the ICO boom will soon bust. Before Christmas in 2017, Bitcoin’s price fell by around 45% to $11,000 in classic déjà vu style. The price of ETH fluctuated significantly throughout 2017, beginning the year at roughly $8, hitting $437 on Jun 12, experiencing a price correction of about 70% to around $136, and then increasing toward the end of the year. On January 13, 2018, the price of ETH reached $1,400 before falling over the course of the year. Even so, Ethereum managed to make it through this turbulent time and maintain its position as the second-most popular cryptocurrency by market capitalization, just behind Bitcoin.
Decentralized applications (dApps) built on various blockchains, including Ethereum, were widely introduced as cryptocurrencies gained greater notoriety and media attention. Finding the ideal incentives for consumers to provide liquidity was one of the issues that dApps addressed during this time. The solution to this was liquidity mining.
The total value of tokens locked in dApps exceeded $1 billion in February 2020. The total value locked, however, surpassed $200 billion in just 10 months thanks to DeFi Summer. Stablecoins, decentralised wallets, lending, and borrowing are just a few of the concepts made popular during the DeFi summer. The advent of liquidity mining via Compound protocol served as the primary impetus for DeFi Summer. COMP tokens were given out as compensation to users who loaned and borrowed money on Compound. As users began to take advantage of lending and borrowing on several protocols, yield farming gained popularity.
Aside from DeFi, non-fungible tokens (NFTs) allowed Vitalik Buterin to fulfill his vision of expanding the use of Ethereum. People like Vitalik Buterin were shocked by the 2021 NFT wave. Reuters said that NFT sales would total $25 billion in 2021. Numerous NFT collections gained popularity.
The time of the merger
Since December 1, 2020, discussions regarding The Merge, a switch to the Proof of Stake consensus algorithm, have been under way due to the mounting difficulties of high gas costs and the negative environmental effects of mining. The current Ethereum platform will join with the Beacon chain in this eagerly awaited event to switch to PoS. Future sharing will enhance block space while reducing energy use by more than 99.0% throughout the transition.
The Merge had no definite date, but after numerous delays, it has now been tentatively scheduled for September 19, 2022, giving joy to the cryptocurrency community during this crypto winter. After the merge, Vitalik Buterin reassures the community that much work remains in what he refers to as the “surge, verge, purge, and splurge” of Ethereum.
Learning more about cryptocurrencies and Ethereum in advance of the Merge is never too late. Keep an eye on this space to learn about the newest developments in DeFi and NFTs!