The 5-year history of the Ethereum network: from being misunderstood for a long time to institutions entering the market
Major breakthroughs typically follow a seven-step path:
1. First, no one has heard of you. 2. Then, they heard about you, but thought you were crazy. 3. Then, they learn about your product but don't think it has a chance. 4. Then, they see your product as a toy. 5. Then they find the toy unbelievable. 6. Then they started using it. 7. Then, they can't imagine life without it.
"When you change the world and no one notices"
——Morgan Housel
no one has heard of you
Ethereum is currently the most actively developed blockchain network with the largest transaction volume in the world. But five years ago today, when the genesis block was mined and the network went live, few people outside the development community had heard of the Ethereum blockchain.
Ethereum: Bitcoin + Everything
In Goldman Sachs' landmark 2015 report "What If I Tell You Blockchain Could Change Everything," Ethereum was listed as"Start-up companies". People are trying to understand what it is, what exactly makes it different from Bitcoin, the digital cash system. We at ConsenSys spend a lot of time explaining these differences. The following are not enough to fully explain the differences between them:
Bitcoin is a single application of blockchain technology.
There are many different types of blockchains with very different characteristics.
Ethereum is a type of blockchain.
Ethereum is open source, so anyone can access and use it.
TwitterTwitteris a great place to start.
Blockchain for Developers
The Ethereum blockchain is built according to five design principles outlined in Vitalik Buterin's Ethereum white paper.
Modular
Versatility
Modular
agility
Non-discrimination and non-censorship
If someone asked you to build a machine that took these principles to their logical limits, you would end up with a machine like Ethereum.
In the book "Mastering Ethereum", Andreas Antonopoulos and Gavin Wood refer to Ethereum as"A developer's blockchain, designed by developers for developers"image description
New DApps launched monthly on the Ethereum blockchain
State of the Dapps has been a huge help to the ecosystem, starting to look at dapp contracts and Ethereum development commits on GitHub, showing the frenzy of developer activity on Ethereum. When the New York Times published on January 16, 2018"Beyond the Bitcoin Bubble", it felt like people were finally paying attention. Bitcoin is just the tip of the blockchain iceberg, and it's only a matter of time before the rest of the world follows in the developer's footsteps.
they think you're crazy
DAO
In 2016, the DAO hack, and the subsequent hard fork, caught everyone’s attention. Some people think that this Ethereum thing is crazy. The media said that what happened"raises questions about the viability of such a system"。
But the developers say,"it's a ritual"。
The community set out to document known attacks and test the smart contract library. While there has been no shortage of security incidents over the years, decentralized autonomous organizations are now a staple of the Ethereum ecosystem (Aragon, Moloch DAO, Legal DAO, Maker DAO), and hard forks are a proven model for upgrading the network's protocols.
positive sum thinking
Centuries-old names like Ernst & Young are now developing private transaction solutions on the public Ethereum network using zero-knowledge proofs. And they're working with other organizations to advance the Baseline Protocol and help businesses join the mainnet.
Ethereum and Hyperledger, once considered competitors, are now fully integrated through Besu, Burrow, and Sawtooth. Even Fabric supports Ethereum smart contracts.
The idea of one blockchain to rule all blockchains that characterized the early days of the cryptocurrency space has become obsolete in favor of the great promise of interoperable blockchain protocols. Over the past few months, we have seen"WBTC"huge growth; ERC-20 form of Bitcoin on Ethereum, which allows Bitcoin holders to participate in decentralized financial protocols not available on the Bitcoin network.
Importantly, the positive-sum thinking of early adopters that once seemed remote and technologically impossible is increasingly becoming a reality. In the words of Amazon founder Bezos,"Invention Requires a Long-Misunderstood Will"。
They understand, but...
ICO boom
At the beginning of 2018, the Ethereum community was still immersed in the impact of 2017 on the entire cryptocurrency field. The 2017 ICO boom kicked off one of the biggest bull runs in Ethereum history against the backdrop of massive speculation and unprecedented ERC-20 token launches. This rush directly demonstrates the power of the network effect opportunity at the heart of blockchain technology. However, South Korea, Morocco, Colombia, Singapore, and many other countries have issued bans or stern warnings to their citizens regarding Bitcoin, ETH, and other cryptocurrencies.
image description
Creation of ERC-20 token contracts on Ethereum
ethereum killer
ethereum killer
ethereum killer"ethereum killer"The most notable of these is EOS.
Post-ICO marketing narratives for new blockchains have largely focused on Ethereum’s shortcomings: scalability, privacy, user experience, and utility. Some of these shortcomings are perceived, some are real, and some are exaggerated.
Overall, the Ethereum ICO frenzy and aftermath has led many to understand the technology, but they are still looking for credible use cases and opportunities. The bright side of the crypto mania and winter is that it prompts us to focus on more revealing metrics beyond price and volume: smart contract deployments, decentralization, and risk.
they think it's a toy
NFT
With the development of new token standards such as ERC-721 by the Ethereum community, NFT-like game applications have become the entrance to the underlying blockchain technology. And it makes sense: Games have built-in micro-economy and collectibles, while digital artwork hashed to the blockchain is easy to monetize and can prove authenticity. A market for digital artwork like SuperRare has emerged. Just like the "proof of stake" or "proof of work" that people often say, in this NFT field, people are talking about"Cryptokitties"。
Cryptokitties
The viral sensation that first rocked the ethereum network was the humble dapp “Crypto Kitties,” a digital kitten trading game. In December 2017, total network requests more than doubled as the price of CryptoKitties soared into six figures. A task force of developers from MetaMask, Infura, Grid+, and Axiom Zen came together to optimize user experience and explore longer-term scaling solutions to ease congestion. In the process of cooperation, they realized something profound about the development of the Ethereum protocol. As Grid+'s Alex Miller points out,"Everyone who owns ether has an incentive to make the system better"。
Daily active users (DAU) and account growth follow a similar pattern. DAU on January 16, 2018 was the highest in the past 5 years, with 723,085 unique addresses interacting on the mainnet.
People are also realizing that gamers and artists are running applications directly in their Ethereum wallets. Developers have unlocked economic models that did not exist before. They brought finance into the game - now it's time to see if they can gamify finance.
They thought the toy was unbelievable
The rise of DeFi
There is a saying that everything on Ethereum is decentralized finance (DeFi). By its very nature, this blockchain is maintained by a network of incentivized miners who continue to spend resources to earn a decentralized currency as a reward. These accumulated coins are then sold to other people and enter the ecosystem.
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Total ETH and WETH locked in DeFi
2019 is the year of DeFi, but its influence is still largely limited to the community of people who have been familiar with the technology and have been working in the ecosystem for a while. Many companies are developing DeFi protocols, but overall the user experience feels rudimentary and functionality is still fairly limited for all but the most skilled DeFi users.
In the first few months of 2019, the DeFi ecosystem was in many ways a sandbox where Ethereum enthusiasts tested these open protocols and proved the use case for decentralized finance. After the 2018 bear market, ETH holders may be interested"Let their ETH flow"Be cautious instead of hoarding and waiting for the next bull market.
they started using it
Software drives financial reform
five years ago,"Shifting $15 Trillion of Global GDP onto an Open Source Programmable Blockchain"It seems a little unbelievable. Right now, that seems like the only way to bring speed, resiliency, transparency, and ultimately trust to our global financial system, which still runs on a 30-year-old banking system.
Forward-thinking businesses have followed in the developer's footsteps and have been investing in Ethereum for years. We have been working with Microsoft since 2015 to help enterprises adopt blockchain technology through Ethereum Blockchain as a Service on Azure. The Enterprise Ethereum Alliance and Hyperledger have also become an important environment for large institutions to actively cooperate, review deployment plans, and develop common enterprise standards.
Institutional approach
So who are the main players using Ethereum? The list is long.trade finance giant，agritech giant… 32 of this year’s Forbes Blockchain Top 50 projects are built on Ethereum. The Depository Trust & Clearing Corporation, which processes approximately $2.4 trillion worth of transactions annually, recently announced a prototype for digital asset management based on Ethereum.
New initiatives continue to emerge. In our final report last month, we shared a crowdsourced blockchain initiative map at the EU Blockchain Observatory and Forum, which now maps more than 700 initiatives around blockchain around the world.
Some of these projects are still very exploratory. For example, a three-hundred-year-old central bank will not adopt a blockchain-based payment system overnight. But according to a recent BIS paper, 80% of these traditional institutions are actively researching central bank digital currencies (CBDCs). They are realizing that in a world of super apps, composable services, and an increasingly digital economy, Ethereum is not just the infrastructure they need to do great business with each other, it's their only hope of serving 21st century customers .
Plug and Play Ethereum
From the beginning, ConsenSys' mission has been to build sufficient infrastructure and tools so that the rest of the world can join us in continuously building new trust infrastructures.
Over the past year, we've been working hard to bring our products together into a full stack, integrated suite that makes Ethereum more plug-and-play than ever before, whether you're someone who needs API access to node infrastructure The dapp team is also a financial institution preparing to optimize business processes and digital financial tools. As layer 2 solutions like the SKALE network take shape and Ethereum 2.0 arrives, we are excited to see how new and improved usability and network performance unlock the potential of developers, enterprises and the next wave of power users .
They can't imagine life without it
The seven steps of change for major breakthroughs will unfold slowly but surely over the next few years. Innovation at this scale often cannot be measured in quarters or even years. However, we believe that there are some users - and some major institutions - who cannot imagine life without Ethereum.
Thank you to everyone in the entire ecosystem for your support, passion, and tireless efforts over the past five years. Upgrading our global infrastructure is no small undertaking, but it is worthwhile, profound work. We can't wait to see what the Ethereum network will look like in five years.
