Ethereum Saga : The Rise and Rise of Ethereum (Part 1)
Almost two years ago, on 30th July 2015, Ethereum – the brainchild of unquestionable genius Vitalik Buterin and The Ethereum Foundation – was launched into the market as the first blockchain-based turing-complete smart contracts platform. Endless debates and discussions right from 2013 when Vitalik Buterin had first described the Ethereum idea after completing his research work on Bitcoin and the cryptocurrency community, contributed to the launch of this frontier network in 2015 with the Ethereum Genesis Block being released. The developers now began to write smart contracts and decentralized apps to be deployed on the live Ethereum network.
8 months later, on 5th April 2016, a German company Slock.it which specializes in the development of software and hardware for the Internet of Things (IoT), constructed the code for The DAO and in less than a month on the 30th of April, the DAO crowdsale was initiated. Slock.It did not start the DAO, it’s people just wrote the code for the same and open-sourced it.
Slock.It (Smart-Lock) is a clever concept that combines the Internet of Things with Blockchain Technology. It’s vision is to connect all kinds of smart locks to the blockchain enabling to rent, sell and share anything and everything. This kind of Universal Sharing Network (USN) allows the direct transaction of payments without any third party vendor.
A month later, on 27th May 2016, the DAO crowdsale ended with the DAO curator Vlad Zamfir calling for a moratorium on the DAO over many game-theoretical security issues. By this time, the DAO crowdsale had been become the biggest crowdsale in history having raised over $150 Million USD.
The DAO, is a distributed, autonomous organization which exists solely in form of software code on the Ethereum Blockchain. The DAO Smart Contract is – immutable, unstoppable and irrefutable. It isnot backed by any legal entity, it’s entire processing is determined solely by the code. The DAO was created with the purpose of funding projects which support the creation and expansion of the USN. In return, the DAO will receive a reward from these business transactions, generating a steady revenue for the DAO Token Holders.
The concept seemed brilliant until the DAO was hacked on June 17th 2016, after Peter Vessenes, co-founder of the Bitcoin Foundatin, publicly revealed the ‘Recursive Call Bug’ lapse in the security of the DAO that had been overlooked in many Solidiy Contracts. The downfall for DAO was particularly steeper because Founder and COO of Slock.it, Stephan Tual had publicly declared that the funds were safe despite the newly-discovered security issue just 5 days prior to the hack.
As the founder of Giveth, Griff Green announced that the re-entry bug had been applied and the DAO had been hacked, panic strunk the cryptocurrency market and the price of Ether was also slashed to half.
By now, the countdown had already begun. TheDAO’s splitting mechanism gave a month for a solution that would help recover the funds, to be found. Both the Foundation and the Community Members raced to implement a soft fork in the situation.
June 21st saw some relief amongst the members with a group of ‘White-Hat’ ethical hackers being able to secure 70% of TheDAO’s funds. Protocol action was required to track the rest 30% but this ‘Robin Hood’ group was very much appreciated by the members.
Discussion on the soft fork carried on till the end of june, but in vain. Mining pools had enabled the soft fork to be enabled by lowering of gas limits but with critical denial of service flaws found in the soft fork implementation and the miners quickly decided not to use it.
Endless arguments ensued in the Ethereum community till mid-July over the pros and cons of a Hard Fork in the chain. Given a controversial Hard Fork was the only option available, the speculation was determined and announced by Slock.it and the Ethereum Foundation Members. Within 12 hours, The Ethereum Foundation, using a controversial third-party ‘coin vote’ to determine whether the Hard Fork should be turned on by default. With a consensus declared, the updated client was immediately released.
Around 80% of the existing nodes on the chain migrated to the newer client, and the entire community anxiously awaited the release of the Hard Fork Block 1920000. Global celebrations and sighs of relief followed as the block arrived and the Hard Fork was implemented successfully without any obvious flaws.
And with block 1920001, Ethereum Classic was born.
This is the end of Part 1. Continue to Part 2 over here.
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