What is Ethereum?
Ethereum (trading symbol: ETH) is an open-source computer platform for smart contracts. Part of the Ethereum project is a decentralised virtual machine (Ethereum Virtual Machine - EVM) and, most notably, a crypto currency called ETHER. Ethereum was developed by a Swiss organisation called the ETH Foundation.
History of Ethereum
To better understand the origins of Ethereum, it is important to start by explaining the way ETH came to life, with the aim of outlining the key events that allowed ETH to take the undisputed second spot in market share and importance among all crypto currencies, just below Bitcoin.
Morever, due to its close integration with the BlockChain, experts believe the value of ETH will overtake Bitcoin in 2018.
In 2013, Vitalik Buterin, the renowned creator of ETH, writes a paper describing the mechanics of ETH. Later in the same year, Vitalik develops a new platform with an innovative/decentralised scripting language.
In January 2014, the Swiss company Ethereum Switzerland Gmbh develops the first ETH software project. Later in the year, on 22nd July, Vitalik Buterin launches the Ethereum ICO (Initial Coin Offering),
offering ETH crypto tokens to the public for the first time. The ICO proves to be extremely successful
and on 6th August 2014 the public sale raises over $14 million.
On 2nd September of the same year, investors participating in the ICO receive $60 million worth of Ether, however $12M
are allocated to the Swiss based development project. In October 2014, following great initial results, Ethereum allows the creation
of 5 Ether for each blocked obtained through its related mining process. Although 2014 was a huge success for Ethereum Project,
questions started to emerge about its scalability, security and especially anonymity.
In July 2015, Frontier is launched, representing the initial version of Ethereum.
In March 2016, Frontier is replaced by its newer version upgrade, called Homestead. A couple of month later, thanks to a notable press coverage,
the DAO (DAO - a digital decentralized autonomous organization) raises its value by $150,000,000 via crowd sale.
Unfortunately, on 18th June 2016 the DAO was hacked and the anonymous group behind the hack claimed $50M worth of ETH.
This caused a widespread and important debate about cyber-security in the crypto currency market.
As a result and in response to the ever increasing demand for higher security, on 2nd July, the ETH Network split into 2 crypto currencies,
Ethereum (ETH) and the newly created Ethereum Classic (ETC).
Later in July, ETH argued for extra-protocol intentionality, decentralised decision-making and conflict resolution,
whereas on 20th July, ETC argued for block chain immutability, code is law and essentially rebellion.
Due to the different philosophy direction taken by the 2 coins, on 28th July, the whole Ethereum Foundation including its miners,
developers, business partners and users take the painful decision to disassociate themselves from Ethereum Classic.
On 23rd February 2017, one of the biggest CFD brokers, namely eToro, adds ETH trading. Later in March, ETH reaches the
staggering volume of $450 Million per day. In June, thanks to an important endorsement by the Russian government,
ETH has its biggest surge in value. ETH now rallies at almost $800 and analyst say it will reach over $1,000 in the first quarter of 2018.
To understand how important the contribution of ETH is in the crypto currency market, it’s vital to better understand the concept of Blockchain.
This is a truly revolutionary way of transferring transactions-related data without the need of Central Banks.
Each time a crypto transaction is made, its data is saved in blocks, with each of those containing its individual data.
This is then encrypted by assigning random numbers, called nodes.
The real business around crypto currencies is to empower anyone with enough computer processing data to join the network
of transactions validators; these individuals are of fundamental importance for Blockchain and the entire crypto currency market - they are called Miners.
Every time miners complete a transaction, they are rewarded by tokens which can be spent and mortised in the system.
The concept of mining and decentralisation of its system makes the Blockchain technology extremely interesting
and have lately created what we like to call “crypto craze”.