By Natalie Lord
Ethereum is one of the better-known and more popular of the cryptocurrencies. It’s a blockchain-based distributed computing platform and operating system that is open sourced and public, with smart contract functionality.
The name of the token generated by the Ethereum platform is Ether. Ether can be transferred between accounts and used to compensate participating mining nodes for computations undertaken.
Vitalik Buterin, a cryptocurrency researcher and programmer, proposed the idea of Ethereum in 2013. Its development was funded by an online crowdsale that took place in the summer of 2014. A year later, in July 2015, the system went live with 72 million “premined” coins.
Buterin pioneered the Ethereum Virtual Machine (EVM), which is a decentralized virtual machine that is able to execute scripts using a global system of public nodes. The EVM is a Turing complete software that runs on the Ethereum network. It allows anyone to run any programme, given sufficient time and memory, regardless of the programming language. The EVM makes the process of creating blockchain applications much easier and more efficient than previously. Instead of an entirely new blockchain needing to be built for each application, Ethereum enables the development of thousands of different applications on one platform.
It allows you to write code that controls money and also to build applications that are accessible globally. Until recently building blockchain applications was a complex process that required a background in coding, mathematics and cryptography. But Ethereum is changing that by providing developers with the tools to help them build and deploy decentralized applications. Applications are being developed now that were previously unimaginable, from digitally-recorded property assets to regulatory compliance to electronic voting and trading.
Don Tapscott, CEO of the Tapscott Group and the co-founder and Executive Chairman of the Blockchain Research Institute, said of Ethereum: “(Ethereum) has some extraordinary capabilities. One of them is that you can build smart contracts. It’s kind of what it sounds like. It’s a contract that self-executes, and the contract handles the enforcement, the management, performance and payment.”
In the Ethereum blockchain, miners work to earn “Ether” instead of Bitcoin. The Ether is the crypto token that fuels the network. Beyond being a tradable cryptocurrency, Ether is also used by application developers to pay for transaction fees and services on the Ethereum network.
It hasn’t all been plain sailing for Ethereum though. In 2016, a theft of $50 million worth of Ether due to an exploitation of a flaw in The DAO project’s smart contract software took place. As a consequence, Ethereum was split into two separate blockchains. The original version continued, but was known as Ethereum Classic (ETC), and the new version became Ethereum (ETH) with the amount taken in the theft reversed.
Some key Ethereum events:
- November 2013: Buterin published the Ethereum whitepaper.
- January 2014: The development of the Ethereum platform is publicly announced.
- August 2014: Ethereum raises $18.4 million and ends their ICO.
- May 2015: The Ethereum testnet “Olympic” is released.
- July 2015: The first stage of Ethereum’s development “Frontier” is released.
- March 2016: “Homestead” the first Ethereum “stable” goes out on block 1,150,000.
- June 2016: The DAO hack sees 15% of the total Ether in circulation at the time (amounting to $50 million) disappear.
- October 2016: Ethereum Classic forks from the original Ethereum protocol.
- October 2017: The Metropolis Byzantium hardfork update happens.
- February 2019: Metropolis Constantinople hardfork update happens.