VKontakte In late 2013 Vitalik Buterin proposed Ethereum. Development was funded by an online crowdsale (ICO) during July — August 2014. The system went live on 30 July 2015, with 11.9 million coins “premined” for the crowdsale. Formal development of the Ethereum software project began in early 2014 through a Swiss company, Ethereum Switzerland GmbH. The purpose of developing Ethereum was to make blockchain system not only decentralized also useable for wider groups, Vitalik Buterin thought that Bitcoin was not enough flexible and for smart contracts and decentralized application development scripting language was needed, that could make development process easier and available for programmers, so new platform was proposed. Ethereum is written in three programming languages, C++, Go, and Rust, this makes it easy to use. During the development progress four versions of Ethereum was released: Olympic, Frontier, Homestead, and current version Metropolis (Byzantium hard fork) on October 16, 2017.
New version of Metropolis will be released (Constantinople hard fork) and final version will be named as Serenity. During of first and fourth of November Ethereum Developers conference ( Devcon3 ) has been held in Cancun, Mexico. Nearly 2000 participants attended the conference. The main topics during of conference was, switching to POS, to make Ethereum mining more eco friendly, Vitalik buterin also spoke about light clients for Ethereum, with using of it, Clients will not have a need to run whole node, he also spoke about sharding of Ethereum, this technology splits Ethereum in small slices, in that way user will store only a part of Ethereum history and they will use network less cumbersome.
Another important update for Ethereum users will be, that the developers are going to improve developer interface of Ethereum to allow less experienced users to use Ethereum and to make it more accessible. Today we have two different types of Ethereum, Ethereum and Ethereum classic, the spit of Ethereum was result of DAO (Decentralized Autonomous Organization) attack, Ethereum DAO was proposed for alternative fundraising vehicle, when ICO started developers have found a bug in system, during the process of fixing bug, unknown hacker has found same bug and started exploiting it, attacker managed to steal about $ 85 million worth Ethereum for current rate, The situation was very difficult, to solve this problem Vitalik Buterin offered forking of Ethereum, despite of some controversies hard fork has been held, Ethereum Classic came into existence when some members of the Ethereum community rejected the hard fork on the grounds of “ decentralization and immutability”, the principle that the blockchain cannot be changed, and decided to keep using the unforked version of Ethereum.
Since this moment we have two blockchains based on Ethereum. Ethereum is used in different ways for different purposes, the basement is Smart contract, Smart contract is a computer code that can facilitate the exchange of money, content, property, shares, or anything of value.
When running on the blockchain a smart contract becomes like a self-operating computer program that automatically executes, when specific conditions are met. Because smart contracts run on the blockchain, they run exactly as programmed without any possibility of censorship, downtime, fraud or third party interference, Second use of Ethereum is Ethereum virtual Machine, Instead of having to build an entirely original blockchain for each new application, Ethereum enables the development of potentially thousands of different decentralized applications in one platform. Exactly these features are that made Ethereum as a challenger rival of Bitcoin, In practical view Ethereum can be used in every branch of today’s globalized world. Exactly this usability was that exploded Ethereum price, until March 11, 2017, price was under 20 usd and mining was not such attractive, the ROI period for miners was approximately 8 months, this is a period when Ethereum become interesting for many companies, which decided to use Ethereum blockchain for their purposes, Enterprise Ethereum Alliance was founded that tried to attract as much as possible companies into Ethereum blockchain system, Microsoft and JP Morgan were among them, another reason of Ethereum price explosion was raise of ICO projects, which are using Ethereum for money allocation. The result was that price doubled for March 23, and Ethereum mining boom begun, price explosion also attracted more investors into Ethereum network and more miners started mining of Ethereum and for 5th of May the price hit USD 100, ascending price trend kept until 13th of June and Ethereum price hit $ 400, after that moment price fall to $ 149 for 16th July and hit $ 386 for first September after this moment price has become stable is around $ 300 .
Ethereum become interesting also for governments, as it has big potential to build up decentralized applications for a digital economy, on June 1–3 during the economic forum in St. Petersbourg, Buterin met Vladimir Putin, Putin expressed his interest in Blockchain technology and he expressed his hopes that Russia will become more attractive for investors and blockchain technology will help Russian economy. Buterin said that using of Blockchain technology is possible, but the problem is regulation, Government will always try to regulate system and transaction and people will always try to avoid control. This a constant controversy, that will never have a winner. Currently Ethereum is second largest blockchain by its value and its capitalization is more than 28 Billion, it’s still worth to mine, but after switch to POS ( Proof of Stake) Ethereum will become a blockchain system that will not have require to use expensive hardware for mining and electricity cost will be saved too. In Ethereum network now we have dual proof system and just 1 % of transaction are confirmed by POS but after the launch of POS for whole network, Ethereum mining with hardware will end, and new Ethereum tokens will be released by consensus of Ethereum holders, and everyone who will participate in consensus process will be rewarded, reward is 4 % of Ethereum that is holded by owners in wallet. For most of people, changing Ethereum confirmation model is progressive, because it will decrease chance of 51 % attack, also hardware and electricity costs will be saved, this will reduce centralization risks in the Ethereum blockchain.
but there is not expected new price explosion on Ethereum tokens, gradually Ethereum mining will become non profitable and POW will be replaced with POS. Price will become less volatile and network should be much stable than it’s today.
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