- Ethereum PoS blockchain is an eco-friendly blockchain
- Ethereum is the second-largest cryptocurrency by market cap after Bitcoin.
The trace of Ethereum goes back to Bitcoin’s birth in 2008. It is important to first acknowledge the revolutionary work by the pseudonymous Satoshi Nakamoto in 2008, who introduced the concept of Bitcoin and blockchain technology to the world. It was the high-spirited environment of Bitcoin’s success in which Ethereum came and flourished.
Vitalik’s Vision And Birth Of Ethereum
The young and exuberant programmer, Vitalik Buterin, was already part of the Bitcoin community; he believed that there were a few limitations to the Bitcoin scripting language that limited its capabilities. His vision was to create a blockchain platform that could sustain digital currency in a better-enhanced way than Bitcoin and also have the functionalities of smart contracts. Smart contracts are self-executing entities with a code encapsulating the terms of the agreement.
In 2013, five years after the advent of Bitcoin, Ethereum’s founder released the Ethereum White Paper, which was like a blueprint for the plan he had in mind. Documents had a mention of his proposal for a blockchain platform that can help developers create dApps (decentralized applications) and smart contracts. Buterin’s idea garnered a lot of attention and many crypto enthusiasts found it enticing.
It was in 2015 that Ethereum finally went live. Under the codename ‘Frontier’. The first-ever framework of Ethereum utilized the same proof-of-work (PoW) consensus mechanism that was used by Bitcoin. The PoW system involves solving mathematical equations and allowing the first miner who can solve them to post a new transaction block on the blockchain. Even though Bitcoin and Ethereum used the same consensus mechanism, there was no limit to the maximum cap supply of the ETH coins.
DAO Hack And Transformation Into PoS
Just one year after its inception, the Ethereum community faced an unprecedented turnaround with a major controversy known as the DAO hack. DAO (Decentralized Autonomous Organization) is an open-source protocol consisting of a community. DAO specifically uses autonomous smart contracts for facilitating voting or execution of orders.
In 2016, hackers spotted a few bugs in the DAO’s code and managed to steal roughly $50 Million worth of ETH. The Ethereum community is split into two groups. One became today’s mainstream Ethereum chain and the other group that supported the reimbursement of hacked currency to developers was known as Ethereum Classic.
Ethereum launched some new solutions for layer-2 blockchains in 2019. This also paved the way for Ethereum to finally adopt the PoS (proof-of-stake) consensus mechanism. This was also an environmentally friendly move, as it eradicated the high energy consumption of the Ethereum blockchain.
A smooth transition to PoS helped enhance Ethereum’s scalability. It also mitigated Ethereum’s carbon footprint but still couldn’t vanquish it completely. In 2022, the Ethereum team announced a ‘merge’ that transformed the PoW blockchain into a Beacon chain and stimulated Ethereum to successfully transition into a PoS blockchain.
Conclusion
Ethereum continues to be one of the most formidable cryptocurrencies. Its robust paradigm has given possibilities to various innovations like DeFi (decentralized finance), NFTs and smart contracts. Ethereum 2.0 envisions further transcending the crypto landscape in the future.