Ethereum: A Complete History and In-Depth Analysis of a Global Open-Source Blockchain Platform

Ethereum: A Complete History and In-Depth Analysis of a Global Open-Source Blockchain PlatformEthereum is a global, open-source blockchain platform designed for decentralized applications (dApps) powered by smart contracts, with its native cryptocurrency being Ether (ETH). Ethereum allows developers to write code that governs the transfer of digital assets according to pre-defined programming conditions

Ethereum: A Complete History and In-Depth Analysis of a Global Open-Source Blockchain Platform

Ethereum is a global, open-source blockchain platform designed for decentralized applications (dApps) powered by smart contracts, with its native cryptocurrency being Ether (ETH). Ethereum allows developers to write code that governs the transfer of digital assets according to pre-defined programming conditions. Its primary uses fall into three categories: firstly, as a store of value, where users can hold ETH; secondly, as a medium of exchange, where users can pay and receive funds using ETH; and thirdly, as an incentive mechanism for network operation, where users pay transaction fees (Gas), denominated in ETH, to support the running of dApps. The Gas fee is determined by the computational cost of executing the code.

Part 1: Ethereum's Origins and Early Development (Early 2013 - July 30, 2015)

In 2013, Vitalik Buterin, an early Bitcoin writer and co-founder of Bitcoin Magazine, first introduced the concept of Ethereum in a whitepaper, envisioning it as a "world computer." As an early adopter of Bitcoin, Buterin believed that digital currencies and blockchain technology could transcend simple peer-to-peer (P2P) electronic value transfer to encompass broader applications. To achieve this, he set out to create a full-fledged virtual ecosystem comprising a global blockchain and a smart contract programming platform, both underpinned by the native cryptocurrency ETH. By integrating programming functionality directly into the Ethereum protocol, global developers could utilize automated ETH payments and design novel decentralized applications deployed on a public blockchain. The use of smart contracts allowed Ethereum-based applications to automatically transfer information and value based on dynamic conditions, enabling bespoke business models for a new internet economy (Web3.0).

From late 2013 to early 2014, Buterin co-founded Ethereum with Mihai Alisie, Amir Chetrit, Charles Hoskinson, Anthony DiIorio, Dr. Gavin Wood, Joseph Lubin, and Jeffrey Wilke. Shortly thereafter, Gavin Wood codified the first functional implementation of Ethereum in a yellow paper, detailing the technical specifics of the protocol, including the Ethereum Virtual Machine (EVM) and the Solidity smart contract programming language.

Concurrently, two entities were established to oversee Ethereum's development: the for-profit organization EthSuisse, founded in February 2014, and the non-profit Ethereum Foundation, founded in July 2014. By the launch of the mainnet on July 30, 2015, approximately $18 million raised during an initial coin offering (ICO) from July to August 2014 resulted in the creation and distribution of 72 million ETH. Simultaneously with the mainnet launch, EthSuisse dissolved, designating the Ethereum Foundation as the sole organization responsible for driving Ethereum adoption and development.

Part 2: The DAO Hack (June 17, 2016)

On April 30, 2016, Slock.it, a blockchain and Internet of Things (IoT) solutions company, launched "The DAO" on Ethereum, a project intended to be a decentralized venture capital fund. During a 28-day crowdfunding period, The DAO raised over $150 million. The DAO allocated voting rights proportionally to members' investments, allowing members to vote on which projects to fund. If a project was profitable, members received returns based on the smart contract terms and their share in The DAO.

However, The DAO's operation did not proceed as planned. On June 17, 2016, an anonymous hacker exploited a vulnerability in The DAO's smart contract code, stealing approximately $60 million worth of ETH and transferring it to an isolated wallet address. This led to a massive sell-off in the ETH market as investors panicked. With no way to recover the stolen funds, the cryptocurrency community engaged in heated debate on how to resolve the issue.

Ultimately, the community decided to perform a hard fork on July 20, 2016, creating a new version of the Ethereum blockchain, known today as Ethereum, deleting the theft record and compensating the original holders who suffered losses. The original Ethereum protocol was renamed Ethereum Classic (ETC), with its native token being ETC. Ethereum Classic retained the complete transaction history, including the DAO hack, to uphold the fundamental principles of decentralized governance and immutable data.

Today, both Ethereum and Ethereum Classic networks coexist and are beginning to explore interoperability. Although similar in function and application, significant differences in underlying architecture, development philosophy, and governance principles have emerged since the hard fork.

Part 3: Ethereum's Four Development Phases (July 30, 2015 - Present)

Ethereum's development is divided into four major phases, some of which are further subdivided into sub-phases. Each phase is integrated into the main protocol via hard forks and undergoes thorough functional testing on testnets. Over time, Ethereum's roadmap has evolved to reflect community consensus. The goal of the Ethereum project is to eventually reach the Serenity phase (Ethereum 2.0), becoming a globally scalable payment network and smart contract platform resilient to centralized governance.

• Phase 1: Frontier (July 30, 2015): The Ethereum mainnet launched, allowing users to mine ETH and test basic functionality.

• Phase 2: Homestead (March 14, 2016): Updated the Solidity language and adjusted several parameters, including Gas prices and costs.

• Phase 3: Metropolis: Divided into two sub-phases: Byzantium (October 16, 2017) and Constantinople (February 28, 2019). Byzantium added zk-SNARK technology and the difficulty bomb (affecting ETH inflation), enhancing privacy and security. Constantinople improved smart contracts and explored scalability solutions based on state channels.

• Phase 4: Serenity (Ethereum 2.0): Expected to be completed post-2022, implemented in multiple phases, the primary goal is to transition Ethereum to a Proof-of-Stake (PoS) protocol and introduce Ethereum WebAssembly (eWASM) to enhance network performance and expand supported smart contract programming languages.

Part 4: Key Features and Technical Architecture of Ethereum

Ethereum aims to expand upon Bitcoin's use cases and exist as a decentralized "world computer." Unlike Bitcoin, which only supports a limited scripting language and P2P value transfer, Ethereum is designed to be Turing-complete, supporting more sophisticated programmable data interaction. Nevertheless, Ethereum and Bitcoin share some common features, albeit to varying degrees:

• Decentralization: Ethereum currently employs a Proof-of-Work (PoW) mechanism, eliminating the need for a central authority (such as governments and financial institutions) to validate transactions or smart contract-based network operations. However, it should be noted that while governance is designed to be decentralized, the concentration of mining pools presents a potential risk.

• Permissionless: Anyone can participate in the Ethereum network.

• Security: Under the PoW protocol, the network is secure as long as the computing power of honest nodes exceeds that of attackers. The cost of a 51% attack is high, and the return is uncertain, making it unlikely. While the 2016 DAO hack raised security concerns, it was primarily due to vulnerabilities in the Solidity language, not inherent flaws in the network itself. However, with the completion of Serenity, Ethereum will transition from PoW to PoS, significantly impacting network security.

• Open-Source: Ethereum's source code is publicly available, allowing anyone to access, contribute to, or fork it.

• Transparency: All transactions are recorded on the Ethereum blockchain and are publicly verifiable.

• Pseudonymous: Public wallet addresses are not directly linked to personal identities, but complete anonymity is difficult to achieve.

• Inflationary Supply: While initially 72 million ETH were issued, the ETH supply increases as the network grows, but there is no predetermined maximum supply cap.

Part 5: Core Components of Ethereum

Ethereum is the first digital asset to combine a platform with smart contract functionality. Its core components include:

• Ether (ETH): Ethereum's native cryptocurrency, used for storing value, settling transactions, and paying Gas fees. Gas is an internal unit of value used for smart contract code execution.

• Smart Contracts: A piece of code that automatically executes pre-defined transactions and is immutable.

• Solidity: The primary programming language for Ethereum, used to write smart contracts.

• Decentralized Applications (dApps): Applications built on top of Ethereum smart contracts, with a wide range of applications.

• Decentralized Autonomous Organizations (DAOs): A decentralized organizational form whose rules are determined by smart contracts.

• Ethash Algorithm: Ethereum's PoW algorithm, utilizing GPUs for mining.