Ethereum: more than a crypto currency

Ethereum (Ethereum is read) - the second most popular cryptocurrency. Cryptocurrency coins are called ether (ether), denoted by ETH. Now the total value of all coins is more than 22 billion dollars, which is half the price of bitcoins. How did this young crypto currency not only gain popularity, but also encroach on the holy of holies - bitcoin? Let's remember how it all began, and follow the history of Ethereum development.

History of creation

In 2013 19-year-old Vitalik Buterin, co-founder of Bitcoin Magazine, first introduced his vision of the next-gen cryptographic platform. Perhaps, it remains a mystery, as a young man, a native of Kolomna near Moscow, managed not only to develop a block system that is used in bitcoin, to something more, but also to convince other people to join him and create a platform called Ethereum.

The main feature of the etherium was not so much in ether (ether) coins, as in smart contracts. These are special programs that run when certain events occur. As an example, the simplest betting was given: two network members bet on the outcome of a football match. After it is completed, a smart contract is executed and the wins are automatically distributed according to the specified algorithm.

The development fundraising campaign started in 2014. Total managed to attract investment on virtually 31550 bitcoins. After that Acne and the team began to develop. The first active release of the public was presented 30 July 2015 year - the moment of the launch of the blockade, the distributed digital base of the etherium. The protocol was No. 1 and carried the name Frontier.

Vitalik all this time was engaged not only in the development, but also in the active promotion of his crypto currency. Thanks to this company Ethereum managed to establish partnership with large companies, including Microsoft.

14 March 2016 was changed protocol. The second version is called Homestead. It is noteworthy that the price of the broadcast for the first 2,5 of the month 2016 of the year increased more than 10 times. Developers position this version as stable. By this time, the total capitalization of the network has reached 1 billion. A new phenomenon was started talking openly. But Ethereum was waiting for hard times.

The split of the community and the fall

The decentralized autonomous organization (The DAO), created within the Ethereum network to raise funds for project financing, contained a mistake. Thanks to her, the cybercriminals managed 16 June 2016 year to transfer a third of the funds under their management, which corresponded to approximately 50 million dollars. By June 18, the air rate fell by a third.

The following month passed in heated debates. The Ethereum Foundation, led by Vitalik Buterin, offered to make a hard-core network and return the stolen funds to the fund. Part of the community categorically did not accept this point of view, motivating the refusal by saying that the main law of the crypto-currency is a permanent block.

In mid-July 2016 hardcore was still produced. The base was adjusted, the stolen funds were returned. But part of the community rejected these changes. So Ethereum Classic was created. This network develops independently, positioning itself free from censorship, fraud and interference.

Meanwhile, the raised hayp had sad consequences. The price of Ethereum began to decline. In early December, 2016 on exchanges could buy 1 ETH cheaper than $ 7. But it was the bottom. Then investors again believed in this crypto currency.

Revival

By the end of 2016, bitcoin entered a growth phase. This provoked some strengthening of the cost of the remaining cryptocurrencies. The first significant moment came February 23: the number of unconfirmed Bitcoin network transactions reached 100 000, after which some large investors began to look for alternative currencies for their assets. Not surprisingly, Ethereum was among them. 25 March 2017 year, the price over the air overcame the psychological threshold of $ 50 and for a month fixed at this level.

Since 25 April the next series of attacks on the bitcoin network has begun. In May, the number of unconfirmed transactions of the bitcoin network several times exceeded 200 000. Because of this, coin transfers took more and more time, up to several days, and the commission reached several dollars.

This was accompanied by an increase in the price of the etherium. 19 May, for the first time in history, the price for 1 ETH exceeded $ 100. The next significant milestone in $ 200 was overcome by 30 May. In the coming days, a new record is expected - $ 250.

Future Ethereum

It is a mistake to believe that the success of Ethereum became possible only due to problems with Bitcoin. Vitalik Buterin is actively involved in the fate of his brainchild. In January, the ZoE project (Zcash on Ethereum) was announced. The key feature of Zcash crypto currency is the privacy of transactions when using z-type purses (anonymous addresses start with z, unlike standard t-type purses). A similar technology is planned to be implemented in Ethereum.

At the April conference in Moscow, Vitalik told about the further development of the platform. So, the next protocol will be Casper - an intermediate step that will reduce the dominant role of the miners and introduce a new method of confirming transactions Proof-of-stake (PoS). These changes will reduce the commission for the transfer of funds and accelerate the confirmation of transactions.

Recently it became known that Vitalik moved to Singapore. Obviously, this was done with the aim of expanding Asia. If the etherium receives at least half of what bitcoin has been awarded in China and Japan, we have every chance to see a change in the leader in the crypto-currency market.

Now, remember that bitcoin is torn apart by controversy. Insufficient network bandwidth and planned forks are just two global problems that can significantly derail the currency. Ethereum was "lucky" to survive the post-launch hard fork. But a young cryptocurrency is one thing, a coin that initiated such a large-scale phenomenon is quite another.

Will we see a change in leadership this year? Who knows. One thing can be stated with certainty: the dominant dominance of one cryptocurrency has come to its logical conclusion. Ethereum appeared later, which means it took into account the mistakes of its predecessors. Ethereum is not only a currency, it is a solid platform for building blockchain-based systems. But the main thing that makes Ethereum stand out is the development plan. The owners know what should happen in the end. At the same time, they are not afraid to add innovations that contribute to additional popularization. Let Ethereum not be the most expensive cryptocurrency right now. But it is obvious that it is the most technologically advanced.