A decade of Ethereum: Uncovering its little-known origins  

The world has had Ethereum for a decade – ten years that have reshaped how people approach money and value transfer, to say the least. It’s worth noting that the native Ether token, Ethereum’s blockchain’s coin for fee payments and more, struggled in its first years of existence. It lacked a paved path on which to catch on, and the intimidating innovation brought about drove a healthy dose of skepticism among observers.

However, Ethereum is no longer confined to the wealthiest investors or the most tech-savvy users. It has achieved several impressive milestones, thanks to a growing and committed community, as well as consistent infrastructure upgrades and work, which led to its initial price of around $0.30 per token skyrocketing to around $4,878 by November 2021. That’s an ROI of over 1,600,000% from ICO to ATH. And even if the asset’s price today is lower, new enthusiasts are still learning how to buy Ethereum – and the trend is likely to persist, driven by bullish factors like the following:

• Ethereum’s dominant role in stablecoins and settlement layers
• Widening integration across fintech and TradFi platforms
• On-chain finance (DeFi 2.0) entering the mainstream
• Growing developer activity and dApp innovation
• Increasingly friendlier regulatory framework
• Rising institutional interest.

While Ethereum’s birthday has passed, it’s worth revisiting its steady – and often stormy – growth, as well as the inspiring yet not-so-well-known roots that started the decentralized revolution. Keep in mind: if you had no idea about Ethereum’s early struggles and its success in overcoming major stumbling blocks, you’re just one of the many unaware of the challenges that shaped its existence.

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Would Ethereum exist if not for World of Warcraft?

While the starting place of Ethereum is often tied to Vitalik Buterin’s Bitcoin discovery and co-founding of Bitcoin Magazine together with Mihail Alisie, well before turning 18, a more thought-provoking root brainstormed the network: World of Craft.

Ethereum’s roots can be traced back to Vitalik Buterin’s teenage years, when he was playing the famous MMORPG. He has dedicated months to developing his character in World of Craft, only to see it lose its main skill after an unfortunate update. Disheartened by the lack of control the user should have over their activity and frustrated by Blizzard Entertainment’s decision-making power, Vitalik started working out ways to increase decentralization and transparency in software apps and video games alike. His character’s failure struck him as a stark reminder of how perilous centralized services can be. As he puts it, he began imagining people in these institutions plotting ways to ruin more people’s experiences out of the blue. As he told Wired back in 2016, he realized that the control and power held by both corporate and governmental institutions needed to be minimized for the benefit of users.

That’s when he came across Bitcoin and began exploring its still-evolving ecosystem. He went on to co-found Bitcoin Magazine and discovered the ideas of Nick Szabo, a prominent thinker whose work heavily influenced Bitcoin’s design. Szabo’s concepts inspired Vitalik to envision a new kind of network –Ethereum – one that would expand on Bitcoin’s underlying technology and succeed in areas where Bitcoin fell short.

A one-of-a-kind ICO and early stumbling blocks

Ethereum’s journey began on November 27, 2013, when its white paper was published and outlined a blockchain developed to sustain decentralized applications (dApps) fueled by self-executing digital agreements known as smart contracts. The inspiration behind the name? It’s “ether”, the fifth quintessence or element that in alchemy is believed to fill the universe, after fire, air, water, and earth.

Importantly and perhaps obviously, Vitalik didn’t do it all by himself – he collaborated with seven co-founders:

• Mihai Alisie (who contacted Buterin after discovering Bitcoin and laid the foundation for Ethereum)
• Gavin Wood (who later developed Polkadot)
• Charles Hoskinson (who eventually built Cardano)
• Anthony Di Iorio
• Amir Chetrit
• Jeffrey Wilcke
• Joseph Lubin.

Zug – the “Crypto Valley”

Zug, the Swiss canton’s largest town and capital, is Ethereum’s birthplace and has been known as “Crypto Valley” ever since due to its flexible and tolerant regulatory framework regarding cryptocurrency. However, this fact shouldn’t imply that Ethereum’s first days were a walk in the park.

Internal tensions surfaced immediately after the project’s inception and led to the infamous “Game of Thrones Day” in 2014, when co-founders Amir Chetrit and Charles Hoskinson were forced out due to leadership conflicts. Hoskinson wanted a for-profit structure, a vision that clashed with Vitalik Buterin’s idea of a decentralized, non-hierarchical project and resulted in even deeper disagreements about Ethereum’s core identity. Even after the leadership restructure, the project came under intense pressure during the ICO. But the real test was 2016’s infamous DAO hack, which saw millions in ETH stolen due to a vulnerability. The crisis fragmented the Ethereum community and forced a controversial hard fork that led to the creation of two separate blockchains: Ethereum and Ethereum Classic. Some community members wanted a reversal that would have Ethereum behave as if nothing happened, while others wanted to recoup the lost asset value.

These early challenges exposed the fragility of Ethereum’s governance and the complexities of establishing a new territory of decentralized finance.

Ethereum 2.0 and the progress steps

Following the DAO incident, Ethereum steadily gained traction, strengthening its reputation as the second blockchain after Bitcoin to be so heavily used. It was during the 2017 bull run that enthusiasts started to think of a potential “flippening” – a scenario where the newcomer ETH exceeds the frontrunner BTC. Ethereum has ushered in smart contracts, laying the foundation for decentralized finance (DeFi). Devs launched multiple on-chain services, including decentralized exchanges, staking platforms, and lending apps, driving instant growth and community involvement.

Ethereum is also credited for the emergence of non-fungible tokens (NFTs), with early projects like CryptoPunks and CryptoKitties opening the room for an endless wave of tokenized assets. These digital collectibles gained significant momentum during the 2020 bull run and peaked in the 2021 “NFT Summer”, when millions of dollars were paid for some unique collections.

Ethereum started a new period when the NFT craze calmed down. September 2022 marks one of the network’s biggest milestones, being the moment the network completed The Merge and transitioned from the energy-intensive Proof-of-Work to the eco-friendly Proof-of-Stake.

September 2022 – Ethereum’s entry into a new era marked by sustainability. 

The shift from the energy-draining consensus model to the Proof-of-Stake reduced the protocol’s energy consumption by over 99%, improving efficiency and sustainability and showing the world that crypto doesn’t have to be so environmentally harmful.

Ethereum’s eco-oriented achievements are serving as a beacon of inspiration for other cryptocurrency projects looking to become more sustainable; or at least, they should.