Happy 5th Birthday to Ethereum – The Daily Gwei #40

Today is Ethereum’s 5th birthday aka the 5th anniversary of the Ethereum genesis block! Obviously a lot has happened in Ethereum since it launched in 2015 – from the DAO hack to ICO mania to DeFi. Unfortunately, I only got involved with Ethereum in early 2017 so I missed out on all the craziness of the earlier years. Though, I do know my Ethereum history so let’s dive into it.

The Ethereum Genesis block (source: https://etherscan.io/block/0)

Let’s start at the beginning. Vitalik first published the Ethereum whitepaper in late 2013 and then publicly introduced Ethereum at the Bitcoin Miami meetup in February of 2014. It’s not a secret that Vitalik came up with the idea of Ethereum because all of the innovative things he wanted to build were not possible to do on Bitcoin. He mentions some of these things in the whitepaper such as stablecoins(!) and DAOs.

The Ethereum ICO was then held between the 22nd of July 2014 and the 2nd of September 2014 and raised ~31,000 BTC (~$18.3 million) – it was the largest ICO raise ever at that time (little did we know how crazy it would get in 2017). Not to cause you deep regret, but ETH’s price at the ICO was a mere $0.30 or, put another way, if you had invested 1 BTC (~$600 at the time) at the start of the ICO, you would of been able to purchase 2000 ETH. Today, 1 BTC only buys you ~34.5 ETH and 2000 ETH is worth $638,000 – quite an amazing return for those early investors!

Throughout it’s 5 year history, Ethereum has had 9 hard forks (“network upgrades”) with most of them being non-contentious. Obviously, the DAO fork in mid-2016 was highly contentious and resulted in the birth of Ethereum Classic. The DAO fork also split the community and (from what I’ve been told) it was a very dark time for Ethereum – people thought it was actually going to die! What made it even worse was the fact that Ethereum suffered a sustained DDoS attack that brought the network to a crawl in late 2016. Though, the attack vector was patched in November 2016 as part of the Spurious Dragon hard fork. Even though 2016 was full of negative press for Ethereum, somehow ETHs price went on to have its biggest run ever – increasing from $10 at the start of 2017 to $1400 in January 2018. I believe this was mostly due to the ICO mania that actually started in 2016 with notable token sales from Augur, Golem and of course, TheDAO itself.

The last 2 years have actually been quite different for Ethereum compared to the early days. For starters, Ethereum experienced it’s first real long-term bear market where the price of ETH went from a top of $1400 to a low of $80 in just 1 year (Jan 2018-Dec 2018). This caused many people to leave the Ethereum ecosystem altogether and only the die-hard fans remained to keep building out this platform that we all believed in. It’s been quite the arduous journey through 2019 in particular as that was really the year that even the die-hards seemed to “lose hope” due to an extremely stagnant ETH price.

In saying that, 2020 has been much brighter as all of the efforts that people have put in building out the ecosystem over the last 2 years are starting to pay off in a big way. DeFi is growing at an exponential rate, yield farming is getting everyone excited, DAOs/community governance is really coming alive and of course, ETHs price is back over $300 (something not seen since July 2019). On top of this, layer 2 tech on Ethereum has come a long way and we’re on the cusp of seeing a proof of stake Ethereum go live with eth2 (something that has literally been talked about since Vitalik came up with Ethereum).

I’m very excited to see what the next 5 years brings for Ethereum.

If you want to dive deeper into Ethereum’s history I highly recommend buying Camila Russo’s new Ethereum book – The Infinite Machine. It covers the rise of Ethereum over the last few years in-depth and has plenty of stories from the people that made it happen.

Have a great day everyone,
Anthony Sassano

All information presented above is for educational purposes only and should not be taken as investment advice.

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