Ever wondered how the worlds second largest cryptocurrency came to be?
This is the story of Ethereum: from a teenage daydream to a blockchain ecosystem worth hundreds of billions of dollars.
In this (important) history lesson, you will learn how a 19 year old programmer conceived a “world computer” that could run unstoppable applications, how a team of co founders brought this vision to life, and how the platform survived early catastrophes to revolutionize blockchain technology.
Teen Genius Has Wild Idea (2013 to 2014)
Picture this: It is 2013, and while most 19 year olds are figuring out college majors, Vitalik Buterin is casually inventing a new blockchain platform.
After hanging around Bitcoin circles (he co-founded Bitcoin Magazine), Vitalik pitched Bitcoin developers on adding more functionality to their blockchain.
When they basically said “nah, we are good,” Vitalik pulled the classic teenager move: “Fine, I will build my own blockchain with smart contracts and decentralized apps!”
Vitalik named his creation “Ethereum” after browsing Wikipedia for science fiction elements. He liked that it contained the word “ether” which sounded appropriately mysterious and universe permeating for his grand vision of a “world computer.”
Nothing says “serious financial technology” like naming your trillion dollar platform after something you found while exploring science fiction wikis!
Ethereum would not be a one man show, though.
In true geek fashion, our boy recruited the rest of the “first five” co-founders:
- Mihai Alisie who also co-founded Bitcoin Magazine
- Anthony Di Iorio who founded the Toronto Bitcoin Meetup Group (TBMG), where he met Vitalik Buterin. Currently, he is the founder and CEO of Decentral Inc.
- Amir Chetrit who worked on the Colored Coins project where he met Buterin
- Charles Hoskinson who made content for The Bitcoin Education Project and TBMG and knew Di Iorio. And is the founder of Cardano.
And then the founding team quickly expanded to eight to include a few key players:
- Gavin Wood, a computer scientist who got in touch with Buterin after reading Ethereum’s whitepaper. Mr. Wood is a serial entrepreneur who has also founded the Web3 Foundation and Polkadot, among many other projects.
- Jeffrey Wilcke was a core developer of Mastercoin, one of the projects that inspired the Ethereum network. Currently the co-founder of Grid Games.
- Joseph Lubin also knew Di Iorio from TBMG which was then renamed the Bitcoin Alliance of Canada. Lubin is currently the CEO and co-founder at ConsenSys, an Ethereum software company most well known for the MetaMask wallet.
The gang lucked out with Dr. Gavin Wood, who not only helped Buterin with his C++ but was also responsible for shifting the project’s vision from “programmable money that’s moved around by contracts” to a more general-purpose computing platform.
He also conceptualized Solidity, the actual programming language that runs Ethereum.
It’s thanks to Solidity that developers can create dApps, design smart contracts, and launch Initial Coin Offerings (ICOs) on Ethereum.
I guess you could say that Gavin Wood did the team… a solid. ity.
No wonder Wood left out everyone else’s names when he wrote Ethereum’s “Yellow Paper” in April 2014.
In January 2014, they officially unveiled Ethereum at a Bitcoin conference in Miami, complete with the mandatory crypto startup living arrangement: all crammed into one house to hack on code and debate blockchain philosophy.
Raising Money: “Trust Us, This Will Totally Work” (2014)
With a vision and a team in place, Ethereum needed cash. They set up a Swiss company and a nonprofit foundation (because Switzerland plus blockchain equals legitimacy, obviously) and launched one of crypto s first big crowdsales in July and August 2014.
The pitch was essentially, “Give us your Bitcoin, and we will give you tokens for a network that does not exist yet!”Surprisingly, this worked spectacularly as they raised over 31,000 BTC (about $18 million at the time) and sold 60 million ETH.
This was before the network even launched!
Early crypto investors clearly operated on the FOMO principle: Fear Of Missing Out on the next Bitcoin.
Armed with this funding, the team did something shockingly responsible. They built multiple versions of Ethereum in different programming languages (C++, Go, Python) to minimize bugs. Triple the code, triple the fun!
“It Is Alive!” Ethereum Network Launches (2015)
After lots of coding, testing, and probably an unhealthy amount of caffeine, Ethereum s first public version, nicknamed “Frontier,” went live on July 30, 2015. Block 0 (the Genesis Block) was mined, and the great experiment began!
Frontier was deliberately bare bones and developer focused; think of it as the “please excuse our dust during construction” phase of Ethereum.
But it worked!
People could mine ether and deploy actual smart contracts on a live blockchain. The floodgates of creativity (and occasional insanity) were open.
The DAO Disaster: “Oops, We Lost $50 Million” (2016)
In 2016, Ethereum faced its first existential crisis.
The community created “The DAO,” a decentralized venture fund that raised a mind boggling $150 million worth of ETH. This was basically a giant money pool controlled by smart contracts instead of humans.
What could possibly go wrong?
Spoiler alert: A lot.
In June 2016, a hacker exploited a code vulnerability and siphoned off about $50 million worth of ETH. Awkward!
After heated debates about whether code really is law (spoiler: it is not when $50 million vanishes), the community voted to perform a hard fork of the blockchain to reverse the theft.
This created drama of soap opera proportions. The majority moved to the new version where hacked funds are returned (now Ethereum ETH), while a minority of purists stuck with the original chain that included the theft (Ethereum Classic).
When Kitties Attack: The Network Gets Famous and Congested (2017 to 2018)
2017 was Ethereum s breakout year thanks to the ICO craze. Suddenly everyone with a LinkedIn title containing “blockchain visionary” was launching their own token on Ethereum.
The platform became ICO central, with hundreds of projects raising millions in ETH.
The peak of this madness? CryptoKitties, digital cats that you could collect and breed on the blockchain.
When these virtual felines launched in December 2017, they became so popular they nearly crashed the entire Ethereum network.
Yes, cartoon cats almost brought down a multi billion dollar financial platform.
This congestion revealed Ethereum s growing pains: if digital pets could clog the system, imagine what would happen with serious financial applications. Gas fees skyrocketed, and everyone realized scaling this thing was not going to be easy.
“We Are Working On It”: The Long Road to Ethereum 2.0 (2018 to 2021)
Ethereum s developers recognized the scaling issues and began working on a grand plan known as “Ethereum 2.0.”
The two main goals were to switch from energy hungry proof-of-work (PoW) mining to more efficient proof of stake validation and to implement sharding to process more transactions in parallel.
Progress was, let us say, deliberate. In December 2020, after years of development, Ethereum launched the Beacon Chain, a separate blockchain running alongside the main network to test proof of stake without risking actual funds.
This allowed users to start staking ETH (locking up 32 ETH to become a validator), although the Beacon Chain did not handle any real transactions yet. It was like having a new engine sitting next to your car while still driving the old one.
“The Merge”: Ethereum Finally Kicks Its Mining Habit (2022)
After countless delays and “soon” promises, Ethereum finally underwent “The Merge” on September 15, 2022.
This was blockchain surgery at its finest, swapping out the consensus mechanism from proof of work to proof of stake while keeping the patient alive!
Remarkably, it went off without a hitch. One moment miners were securing the network, the next moment validators took over, and regular users barely noticed except for the explosion of celebratory memes.
The environmental impact was huge! Ethereum s energy consumption dropped by over 99 percent since it no longer needed massive GPU farms mining around the clock.
Ethereum went from “consuming as much electricity as a small country” to “using about as much power as a small office building.”
Life After The Merge: Ethereum Keeps Evolving (2023 to Present)
In April 2023, Ethereum released the Shanghai upgrade (also called Shapella), which finally allowed stakers to withdraw their ETH.
Before this, staking was like checking into Hotel California; you could stake anytime you liked, but you could never leave!
More recently, Ethereum has focused on making the network more scalable and efficient. The Dencun upgrade in March 2024 introduced something called proto danksharding (yes, that is the actual term, and blockchain developers have a unique sense of humor).
This makes Layer 2 solutions like rollups cheaper and more effective, helping Ethereum handle more transactions without excessive fees.
Looking ahead, Ethereum continues to evolve with plans for full sharding and other improvements.
From a whitepaper written by a teenager to a global, programmable blockchain with an ecosystem valued in the hundreds of billions, Ethereum s journey has been anything but boring.
And in true crypto fashion, it remains perpetually “almost done” with its next big upgrade!