Origins of Ethereum and Ethereum Classic: A Journey of Decentralized Innovation
By Noah Washington October 9, 2023
- Ethereum's origins can be traced back to Vitalik Buterin's vision for a programmable blockchain to enable decentralized apps (dapps)
- The controversial DAO hack led to a split into Ethereum Classic sticking to the original chain and Ethereum hard-forking
- Buterin expressed regrets on privacy, highlighted scaling issues and proposed upgrades like private addresses and sharding
When Vitalik Buterin unveiled Ethereum in 2015, it ignited a spark in the blockchain world. His new platform enabled far more than just digital money. Ethereum allowed developers to build decentralized apps (dapps) on the blockchain, sparking a wave of innovation.
Ethereum promised to take the blockchain revolution sparked by Bitcoin to new heights.
Today Ethereum stands as a home for all things DeFi, including NFTs. It has grown to become a dominant force and the second-largest cryptocurrency by market capitalization. But what led to Ethereum's rapid rise over the years?
Genesis of Ethereum
Central to Ethereum's core is Vitalik Buterin. Buterin's journey began with his fascination for Bitcoin and cryptography. He realized that while Bitcoin had revolutionized finance, its scripting language was limited in its capabilities. Buterin sought to overcome these limitations by introducing a Turing-complete scripting language that would allow developers to craft diverse and intricate smart contracts.
Turing-complete scripting languages enable complex smart contracts and decentralized applications. These languages allow developers to write conditional logic, loops, and other complex functions to be executed on the blockchain.
Ethereum's white paper, published by Vitalik Buterin in late 2013, outlined the concept of a decentralized platform that could facilitate the creation of smart contracts and dapps. This marked the formal introduction of Ethereum's groundbreaking vision to the world. When he wrote the original whitepaper, Vitalik Buterin was just 19 years old. Two years later, at age 21, Buterin launched the Ethereum network.
Birth of Ethereum and Ethereum Classic
To fund Ethereum's development, an Initial Coin Offering (ICO) was conducted in mid-2014. The Ethereum ICO successfully raised funds by offering ethe (ETH), the platform's native cryptocurrency, in exchange for contributions for the network development.
On July 2015 the launch of the Ethereum network sparked excitement and optimism across the blockchain community. Despite some concerns around scalability and security, developers and enthusiasts alike felt excited to build on a new platform.
In 2016, a decentralized venture capital fund called The DAO was built on the Ethereum platform. Unfortunately, a vulnerability in its code was exploited, leading to a massive hack. To rectify the situation, the Ethereum community executed a controversial hard fork, which resulted in the creation of Ethereum Classic, a blockchain that remained faithful to the original Ethereum code.
Ethereum Classic's price since the token's launch in July 2016. Source: CoinGecko
A hard fork refers to a change to the protocol of a blockchain network. It requires all nodes to upgrade to the latest version of the protocol software. Hard forks result in a permanent divergence from the legacy blockchain, thus creating two separate networks - one following the old rules, and the other following the new rules.
Implementing Privacy and Scaling Issues
Throughout the years Buterin has expressed regrets about not emphasizing privacy features in Ethereum's initial design. The transparent nature of Ethereum hindered user privacy and limited its application in sensitive areas.As Ethereum gained traction, the need for privacy features has become more apparent, prompting the exploration of solutions like ZK Snarks and private Ethereum Addresses.
Ethereum also faces centralization risks with over six thousand nodes hosted by big providers like Amazon. According to Buterin, he says regular people need to be able to run nodes more easily. His proposed solutions like "statelessness" to reduce node requirements, plus gradual rollout stages called The Verge and The Purge, aim to encourage wider participation and resilience. But scaling remains a pressing issue, with Buterin citing zero-knowledge rollups as key for throughput.
Ether's price since the token's launch in August 2015. Source: CoinGecko
In late 2022, Ethereum co-founder Vitalik Buterin also proposed implementing a "stealth address system" to boost privacy protections for Ethereum blockchain users. Stealth addresses, which are generated by wallets to obscure public key addresses, would enable more private transactions that require a special "spending key" to access. Buterin notes this system could overcome the current lack of privacy on the public Ethereum blockchain and expand protections beyond just fungible assets like ether. According to Ethereum researcher Toni Wahrstätter, stealth addresses have the potential for widespread everyday uses like payroll, donations, and purchases where users want to keep transaction details private.
When tracing the origins and divergence of Ethereum and Ethereum Classic, we a saga of innovation, regrets and aspirations is unearthed. Vitalik Buterin's visionary insights propelled Ethereum into the global spotlight, redefining the potential of blockchain technology. Meanwhile, Ethereum Classic has remained true to its origins, maintaining its core blockchain.
Meanwhile, Ethereum's legacy of upgrades, including proof-of-stake and various privacy features is indelible, forever etched in the memory of blockchain innovation. Since its launch, Ethereum's development journey has been marked by continuous improvement and adaptation. While not always a smooth road, innovation has truly reigned.