- Ethereum has turned five today! Vitalik Buterin’s brainchild, Ethereum, came into the crypto world with a straightforward aim: to decentralise everything on the internet.
- Soon in just seven months since the launch, Ether, its native digital currency, went on to become the second-largest cryptocurrency in the world.
- With the launch of ETH 2.0, around the corner, Ethereum has been the spotlight of the cryptocurrency industry from the past few months.
The most famous Blockchain after Bitcoin, Ethereum, has turned five today! Vitalik Buterin’s brainchild, Ethereum, came into the crypto world with a straightforward aim: to decentralise everything on the internet and to replace them with programmable transaction protocols known as ‘Smart Contracts’. Soon in just seven months since the launch, Ether, its native digital currency, went on to become the second-largest cryptocurrency in the world.
Let’s take a quick look at Etherum’s journey that has made it into such a powerhouse in the crypto world!
The ICO Boom and the DeFi Craze: Ethereum Reaching New Heights
With ETH soaring above the $300 level (it is currently trading at $317.50) and market capital standing at $35.55 billion, Ethereum is at a great position on its 5th birthday. Previously, the ICO boom and now the Decentralised Finance (DeFi) has helped Ethereum unlock its true potential. The ICOs or the initial coin offerings had raised a hefty amount of $18 million back in 2014. And then, the revolutionary DeFi applications on the Ethereum platform changed the entire scenario of the decentralised world. As of now, approximately $4 billion assets are locked up in its various DeFi protocols.
Major Setback for the Ethereum Community: The DAO Hack
However, things weren’t always this smooth, and the platform was never an overnight success. Tracing its steps back to 2016, the Ethereum platform faced its first major setback dubbed as the ‘DAO hack’. The attacker exploited a vulnerability in the DAO (Decentralised Autonomous Organization) network and transferred all the Ether into a subsidiary child DAO. A total of $50 million worth ETH was stolen. Consequently, arguments surfaced into the Ethereum community — whether a hard fork should be initiated to recover the funds or not. As a result of the conflict of views, the network was divided into the present-day Ethereum and the Ethereum Classic.
Final Testnet Expected To Launch In A Few Days: ETH 2.0 Gearing Up
However, the current consensus mechanism of Proof of Work (PoW) drains lots of energy from the miners. The amount of money that is required to mine one ETH is very high as a result of which the price of the digital currency is pressured down. So to cope with the problem, Ethereum developers chose to use the Proof of Stake (PoS) mechanism in the ETH 2.0 upgrade. It is energy-efficient and makes mining safer.
Moreover, with the launch of ETH 2.0, phase 0 around the corner, Ethereum has been the spotlight of the cryptocurrency industry from the past few months. The new upgrade dubbed as ‘Serenity’ is aimed to improve the scalability of the platform and will implement the brand new proof of stake (PoS) consensus mechanism. But this is just a sneak-peak to the ETH 2.0 mainnet. With the final testnet expected to launch in a few days, Ethereum is fuelling the development and launch of the mainnet. From ETH 1.0, where people were only able to experiment blockchain and mine ether to ETH 2.0, reaching new heights in the blockchain world, Ethereum has come a long way.
In the next five years, Vitalik expects the platform to be a regular part of people’s lifestyles.