## **Founding (2013–2014)** Ethereum was initially described in late 2013 in a white paper by Vitalik Buterin, a programmer and co-founder of Bitcoin Magazine, that described a way to build decentralized applications. Buterin argued to the Bitcoin Core developers that blockchain technology could benefit from other applications besides money and that it needed a more robust language for application development: 88  that could lead to attaching real-world assets, such as stocks and property, to the blockchain. In 2013, Buterin briefly worked with eToro CEO Yoni Assia on the Colored Coins project and drafted its white paper outlining additional use cases for blockchain technology.\[16\] However, after failing to gain agreement on how the project should proceed, he proposed the development of a new platform with a more robust scripting language - a Turing-complete programming language - that would eventually become Ethereum. Ethereum was announced at the North American Bitcoin Conference in Miami, in January 2014. During the conference, Gavin Wood, Charles Hoskinson, and Anthony Di Iorio (who financed the project) rented a house in Miami with Buterin at which they could develop a fuller sense of what Ethereum might become. Di Iorio invited friend Joseph Lubin, who invited reporter Morgen Peck, to bear witness. Peck subsequently wrote about the experience in Wired. Six months later the founders met again in Zug, Switzerland, where Buterin told the founders that the project would proceed as a non-profit. Hoskinson left the project at that time and soon after founded IOHK, a blockchain company responsible for Cardano. Ethereum has an unusually long list of founders. Anthony Di Iorio wrote: "Ethereum was founded by Vitalik Buterin, Myself, Charles Hoskinson, Mihai Alisie & Amir Chetrit (the initial 5) in December 2013. Joseph Lubin, Gavin Wood, & Jeffrey Wilcke were added in early 2014 as founders." Buterin chose the name Ethereum after browsing a list of elements from science fiction on Wikipedia. He stated, "I immediately realized that I liked it better than all of the other alternatives that I had seen; I suppose it was that \[it\] sounded nice and it had the word 'ether', referring to the hypothetical invisible medium that permeates the universe and allows light to travel." Buterin wanted his platform to be the underlying and imperceptible medium for the applications running on top of it. ## **Development (2014)** Formal development of the software underlying Ethereum began in early 2014 through a Swiss company, Ethereum Switzerland GmbH (EthSuisse). The idea of putting executable smart contracts in the blockchain needed to be specified before it could be implemented in software. This work was done by Gavin Wood, then the chief technology officer, in the Ethereum Yellow Paper that specified the Ethereum Virtual Machine. Subsequently, a Swiss non-profit foundation, the Ethereum Foundation (Stiftung Ethereum), was founded. Development was funded by an online public crowd sale from July to August 2014, in which participants bought the Ethereum value token (ether) with another digital currency, bitcoin. While there was early praise for the technical innovations of Ethereum, questions were also raised about its security and scalability. ## **Launch and the DAO event (2014–2016)** Several codenamed prototypes of Ethereum were developed over 18 months in 2014 and 2015 by the Ethereum Foundation as part of their proof-of-concept series.\[4\] "Olympic" was the last prototype and public beta pre-release. The Olympic network gave users a bug bounty of 25,000 ether for stress-testing the Ethereum blockchain. On 30 July 2015, "Frontier" marked the official launch of the Ethereum platform, and Ethereum created its "genesis block".\[4\]\[25\] The genesis block contained 8,893 transactions allocating various amounts of ether to different addresses, and a block reward of 5 ETH.\[citation needed\] Since the initial launch, Ethereum has undergone a number of planned protocol upgrades, which are important changes affecting the underlying functionality and/or incentive structures of the platform. Protocol upgrades are accomplished by means of a hard fork. In 2016, a decentralized autonomous organization called The DAO - a set of smart contracts developed on the platform - raised a record US$150 million in a crowd sale to fund the project. The DAO was exploited in June 2016 when US$50 million of DAO tokens were stolen by an unknown hacker. The event sparked a debate in the crypto-community about whether Ethereum should perform a contentious "hard fork" to reappropriate the affected funds. The fork resulted in the network splitting into two blockchains: Ethereum with the theft reversed, and Ethereum Classic which continued on the original chain. ## **Continued development and milestones (2017–present)** In March 2017, various blockchain startups, research groups, and Fortune 500 companies announced the creation of the Enterprise Ethereum Alliance (EEA) with 30 founding members. By May 2017, the nonprofit organization had 116 enterprise members, including ConsenSys, CME Group, Cornell University's research group, Toyota Research Institute, Samsung SDS, Microsoft, Intel, J. P. Morgan, Cooley LLP, Merck KGaA, DTCC, Deloitte, Accenture, Banco Santander, BNY Mellon, ING, and National Bank of Canada. By July 2017, there were over 150 members in the alliance, including MasterCard, Cisco Systems, Sberbank, and Scotiabank. ## **CryptoKitties and the ERC-721 NFT standard** In 2017, CryptoKitties, the blockchain game and decentralized application (dApp) featuring digital cat artwork as NFTs, was launched on the Ethereum network. In cultivating popularity with users and collectors, it gained notable mainstream media attention providing significant exposure to Ethereum in the process. It was considered the most popular smart contract in use on the network but it also highlighted concerns over Ethereum's scalability due to the game's substantial consumption of network capacity at the time. In January 2018, a community-driven paper (an EIP, "Ethereum Improvement Proposal") under the leadership of civic hacker and lead author William Entriken was published, called ERC-721: Non-Fungible Token Standard.\[41\] It introduced ERC-721, the first official NFT standard on Ethereum. This standardization allowed Ethereum to become central to a multi-billion dollar digital collectibles market. ## **Continued developments** By January 2018, ether was the second-largest cryptocurrency in terms of market capitalization, behind bitcoin. As of 2021, it maintained that relative position. In 2019, Ethereum Foundation employee Virgil Griffith was arrested by the US government for presenting at a blockchain conference in North Korea.\[45\] He would later plead guilty to one count of conspiring to violate the International Emergency Economic Powers Act in 2021. In March 2021, Visa Inc. announced that it began settling stablecoin transactions using Ethereum. In April 2021, JP Morgan Chase, UBS, and MasterCard announced that they were investing US$65 million into ConsenSys, a software development firm that builds Ethereum-related infrastructure. There were two network upgrades in 2021. The first was "Berlin", implemented on 14 April 2021. The second was "London", which took effect on 5 August.\[50\] The London upgrade included Ethereum Improvement Proposal ("EIP") 1559, a mechanism for reducing transaction fee volatility. The mechanism causes a portion of the ether paid in transaction fees for each block to be destroyed rather than given to the block proposer, reducing the inflation rate of ether and potentially resulting in periods of deflation. On 27 August 2021, the blockchain experienced a brief fork that was the result of clients running different incompatible software versions. ## **Ethereum 2.0** Ethereum 2.0 (Eth2) was a set of three or more upgrades, also known as "phases", meant to transition the network's consensus mechanism to proof-of-stake, and to scale the network's transaction throughput with execution sharding and an improved EVM architecture. The switch from proof-of-work to proof-of-stake on 15 September 2022 has cut Ethereum's energy usage by 99%. This upgrade, known as "The Merge", was the first phase in the series of upgrades. However, the impact this has on global energy consumption and climate change may be limited since the computers previously used for mining ether may be used to mine other cryptocurrencies that are energy-intensive. On March 13, 2024 the second phase known as "Dencun" or also "Deneb-Cancun" upgrade went live. This upgrade lowered the transaction fees on the many Layer 2 networks built on top of the base Ethereum blockchain.