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With Ethereum celebrating its 6th birthday, $ ETH is up 140% in 2021

Today Ethereum celebrates its sixth birthday (since the mainnet went live on July 30th, 2015).

The beginnings of Ethereum

The original Ethereum white paper (entitled: “Ethereum White Paper: A Next Generation Smart Contract and A Decentralized Application Platform”) was written by Russian-Canadian programmer Vitaly Dmitriyevich Buterin (better known as “Vitalik Buterin”) and posted on his blog published in December 2013.

Here’s how Vitalik described the main goal of Ethereum in the summary of this article:

“What Ethereum wants to offer is a blockchain with an integrated, full-fledged Turing-complete programming language that can be used to create ‘contracts’ that can be used to encode any state transition functions so that users can create any of the systems described above, as well as many others that we haven’t imagined by simply writing the logic in a few lines of code. “

Ethereum was announced by Vitalik on January 27, 2014 on the second day of the North American Bitcoin Conference in Miami, Florida.

During his presentation, Vitalik said that one of the uses for Ethereum is to create cryptoassets for special purposes:

“Let’s not have a currency. Let’s have thousands of currencies. “

About six months later (on June 7, 2014) the eight co-founders of Ethereum ― Vitalik Buterin, Anthony Di Iorio, Charles Hoskinson, Mihai Alisie, Amir Chetrit, Joseph Lubin, Gavin Wood and Jeffrey Wilke met in a rented house in Zug, Switzerland (a city nicknamed “Crypto Valley”). At this meeting, Vitalik suggested that the Ethereum project be continued on a non-profit basis.

The development of Ethereum was financed from July to August 2014 via an Initial Coin Offering (ICO), whereby the participants paid for the Ether (ETH) token with Bitcoin (BTC). This ICO raised 3,700 BTC in the first 12 hours and raised a total of $ 18 million.

The Ethereum Foundation’s last proof-of-concept prototype, code-named “Frontier”, went live on July 30, 2015.

Although Frontier became publicly available that day, it only offered a “command line” user interface and was intended to allow developers to use it in a live test environment (although the platform was dealing with real money).

Release coordinator Vinay Gupta told Coindesk at the time:

“Don’t put a lot of emphasis on the game unless you really know what you’re doing and you are sure of your risk assessment of the network.”

If you want to learn more about the history of Ethereum, you could do much worse than read journalist Camila Russo’s new book, The Infinite Machine: How an Army of Crypto-hackers Is Building the Next Internet with Ethereum, published by HarperCollins on July 14, 2020.

The current state of Ethereum

The start of the Beacon Chain, the first stage of the ETH 2.0 development roadmap, took place on Tuesday (December 1st) at 12:00 UTC. The Beacon Chain is a Proof-of-Stake (PoS) blockchain and signals the first step in the plan to change Ethereum’s consensus mechanism from Proof-of-Work (PoW) to Proof-of-Stake. It runs alongside the original Ethereum PoW chain and ensures that the continuity of the chains is not broken.

According to data from the open source tool Ethereum 2.0 Beacon Chain Explorer, which was developed by the Austrian blockchain company Bitfly, 201,266 validators from all over the world will take part in the PoS consensus mechanism of ETH2 on July 30, 2021 at 16:28 UTC, and so far 6,440,316 ETH have been staked out (i.e. sent to the ETH2 deposit agreement address).

The upcoming London hard fork, the most important part of which is EIP-1559, was originally supposed to go live on the ETH 1.0 Mainnet in July, as you can see from the following two Twitter posts (from February) by Ethereum advisor Ryan Berckmans.

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– EIP-1559 will most likely launch in July in the “London” hard fork

– Today there was an EIP-1559 community call with miners. It’s great to see a lot of different stakeholders on the call including miners advocating for EIP-1559 https://t.co/DewRgAMZje

– Ryan Berckmans (@RyanBerckmans) February 26, 2021

Here is a description of how Ethereum’s transaction pricing mechanism will work after EIP-1559 goes live:

“The proposal in this EIP is to start with a basic charge that the protocol adjusts up and down depending on the congestion on the network. If the network exceeds the target gas consumption per block, the basic charge increases slightly and if the target capacity is not reached, it decreases slightly.

“Since these changes to the basic fee are limited, the maximum difference in the basic fee from block to block can be foreseen. This allows wallets to automatically set gas charges for users in a very reliable way.

“It is expected that most users will not have to manually adjust gas charges even during times of high network activity. For most users, the basic fee is estimated from their wallet and a small priority fee that compensates miners who take an orphan risk (e.g. 1 nanoeth) is automatically set. Users can also manually set the maximum transaction fee to limit their overall costs.

“An important aspect of this fee system is that miners can only keep the priority fee. The basic fee is always burned (i.e. it is destroyed by the protocol). This ensures that only ETH can be used for transactions on Ethereum, which solidifies the economic value of ETH within the Ethereum platform and reduces the risks associated with the Miner Extractable Value (MEV).

“In addition, this burn offsets the Ethereum inflation and still gives the miners the block bonus and the priority fee. Finally, it is important to ensure that the miner of a block does not receive the base fee, as this removes the incentive for the miner to manipulate the fee into charging more fees from users. “

The London hard fork is expected to go live on August 5th on the Ethereum mainnnet at block height 12965000.

Finally, as for “The Merge” (i.e. merging the current Ethereum mainnet, which uses the PoW consensus, with the Beacon Chain, which uses the PoS consensus), which is expected in H1 2022, it now has an EIP ( EIP-3675).

According to data from CryptoCompare, $ ETH is currently (as of 17:35 UTC on July 30th) trading at around $ 2,345.80, an increase of around 0.79% in the last 24 hours and around 140% over the year to date.

DISCLAIMER

The views and opinions of the author or any other person mentioned in this article are for informational purposes only and do not constitute financial, investment or other advice. Investing in or trading in crypto assets carries the risk of financial loss.

IMAGE CREDIT

Image by “Pexels” via Pixabay

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