Ethereum 5th Anniversary

written by OKCoin

Ethereum 5th Anniversary

A look at Ethereum and its growth over the last five years

Five years in on July 30th, Ethereum has seen incredible adoption and is an integral part of the crypto space. With the upcoming Serenity upgrade, it looks like Ethereum is only going to get stronger.

The Ethereum blockchain has enabled much of the development within the crypto space. A platform for creativity, Ethereum supports innovation and the creation of a wide array of decentralized applications (dApps). Designed as a “world computer,” Ethereum runs on a vast and distributed network of nodes and provides a foundation for a new era of the internet; web 3. 

Allowing anyone to build on top of it, the Ethereum blockchain features a programmatic language that supports the use of smart contracts called Solidity. Self-executing and code-based, smart contracts enable the development of dApps, which form much of the decentralized finance (DeFi) ecosystem. Smart contracts also allow for programmable tokens, meaning token creation (ERC-20) and tokenization of assets which has contributed to the growth and usability of cryptocurrencies.

Ethereum (ETH) at a glance

ETH/USD, 1month

ETH/USD, all time, via Coindesk

Login to view ETH charts and buy, sell, and trade ETH

On-chain data 

Ether supply growth, via Etherscan

Ethereum unique addresses, via Etherscan

Bitcoin and Ethereum addresses, via Cointelegraph

Ethereum nodes around the world, via Etherscan

“It’s been fascinating to watch Ethereum grow in developer mindshare, use cases, and functionality. The first five years of Ethereum adoption has far surpassed Bitcoin’s initial pace of adoption, but it had a running start on the back of Bitcoin’s success,” said OKCoin COO Jason Lau.

“Key to its ongoing success is the flexibility, creativity, and composability that Solidity allows. From DAOs, to ICOs (ERC-20), to NFTs (ERC-721), to Ponzi schemes & games, to DEXs, and now to DeFi – it’s amazing to see new ideas sprout and take hold.”

Technical fundamentals 

Smart contracts

The Ethereum blockchain supports the creation and execution of robust smart contracts, a core differentiator between the Ethereum and Bitcoin blockchains — the two largest and most popular cryptocurrency platforms. Ethereum uses the programming language Solidity for smart contract creation.

EVM protocol 

A core part of Ethereum’s infrastructure is the Ethereum Virtual Machine (EVM), which handles internal state and network computation using the decentralized and international system of nodes. This peer-to-peer network protocol connects users around the world, allowing them to transact trustlessly, without need for central authorities or third parties. 

Consensus algorithm: PoW

To date, the network has employed a proof-of-work (PoW) consensus algorithm for validating transactions and confirming them to the Ethereum blockchain. The upcoming Ethereum 2.0 upgrade, called Serenity, will introduce a new consensus algorithm called proof-of-stake (PoS) that involves staking ETH to participate as a validator instead of performing work to earn the validation of a block.

The latest in a series of network upgrades, Serenity addresses scalability issues by improving Ethereum’s ability to confirm, verify, and execute transactions. Learn more about the Serenity upgrade.

Open-source improvements

As an open-source network, Ethereum relies on dedicated developers reviewing the codebase for opportunities and attack vectors, and proposing changes to the protocol. Ethereum improvement proposals (EIPs) facilitate these changes, allowing the network to develop and grow, becoming more effective and efficient as a “world computer.” EIPs are approved by community consensus and bundled into each upgrade, or hard fork.

DeFi & dApps

DeFi is made up of dApps that operate as permissionless services, allowing financial transactions to take place on the distributed network without need for a traditional central authority. DeFi supports financial autonomy, with most dApps being built using Ethereum smart contracts. 

Several core attributes of the Ethereum blockchain support DeFi: programmability (easy smart contract creation), interoperability (exchange of value between protocols), and immutability (the transaction ledger can’t be altered or manipulated). These features make Ethereum attractive for DeFi development because they support financial security, transparency and liquidity. 

Ethereum’s native token is ETH, the network’s payment method and a form of collateral used in decentralized finance to borrow some ERC-20 tokens. Borrowing and lending play key roles within the DeFi ecosystem, along with insurance, savings, and stablecoins.

Today, Ethereum has over 200,000 developers building on the platform — the largest, most active blockchain developer community in the world. 

Ethereum timeline 

  • ‘Frontier’ launch: Ethereum mainnet launched on July 30 with 72 million coins minted (65% of the total circulating supply in April 2020). Frontier protocol included a block reward and use of Gas.
  • First initial coin offering (ICO) was held by Augur (REP)
  • ‘Olympic’ proof-of concept open testnet: developers explored what the blockchain would look like when released
  • Homestead upgrade: a public version of the original platform built for developers and referred to as “Frontier.” Homestead was a hard fork that removed ‘canary contracts,’ a point of centralization on the network and introduced EIPs and ‘Mist,” an ETH wallet used to write smart contracts. 
  • Ethereum hard forked to create ETC and ETH: A flaw in the ĐAO (decentralized autonomous organization) code on the Ethereum blockchain was exploited, prompting the community to hard fork the chain to remove the hack from the network’s history. This led to a contentious hard fork, with the new separate version becoming Ethereum (ETH) and the original chain continuing as Ethereum Classic (ETC).
  • Metropolis upgrade part 1: Byzantium included nine EIPS designed to improve Ethereum’s privacy, scalability, and security.
  • Ethereum Enterprise Alliance (EEA) was created
  • Programmable tokens took off, with non-fungible tokens (NFT) used within the CryptoKitties digital collectibles game clogging the Ethereum network
  • ERC-20 ICO boom
  • Metropolis upgrade part 2: Constantinople provided another scaling solution based on off-chain transactions. 
  • Istanbul upgrade included six distinct upgrades to improve transaction performance and use of smart contracts
  • DeFi on Ethereum grew
  • Phases of Serenity upgrade
  • Serenity upgrade: Casper release, removing PoW and implementing PoS consensus algorithm

“After five years and weathering numerous challenges, it’s clear that Ethereum will remain dominant in the smart contract space for years to come,” Jason explained. “The 200,000 developers building on Ethereum will attest to that. It’s not purely a technology race; ultimately in open source technology, the developer community dictates success.”

He added, “while there are major questions on how the future of Ethereum will progress (proof-of-stake, cross chain sharding, ETH 2.0+ timing, optimistic rollups), there’s plenty to look forward to. Ethereum started with a vision of a decentralized internet; Web3 and a “world computer.” Its ambitions are grand and I look forward to seeing more business models and use cases develop over the next five years.”

Celebrate by joining the next era of the internet

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