• Ethereum Turns Six Years Old, and Developers Race to Upgrade It

  • The first version of Ethereum, dubbed “Frontier” at the time, was launched on July 30, 2015.

    In the six years since its inception, the network has survived a near-catastrophic early attack, gone through a contentious hard fork, and amassed a market capitalization of $278 billion, second only to Bitcoin.

    However, this will most likely be Ethereum 1.0’s final anniversary. In early 2022, it will be replaced by Ethereum 2.0, a quicker, roomier, and more energy-efficient version. As the network strains to keep up with its success, the update is becoming increasingly critical.

    After years in the shadows, DeFi (short for decentralized finance) programs that allow users to lend, borrow, and trade cryptocurrency without ever handing up custody to a third party surged this summer. More than $60 billion in assets are now linked to Ethereum-based DeFi protocols, compared to less than $4 billion at the same time last year.

    However, this caused issues for the network, which was designed to handle 15 transactions per second. While the adoption of smart contracts for different protocols on the Ethereum blockchain is beneficial, it has slowed the network and increased transaction fees.

    NFTs have found a home on Ethereum despite this. That’s because Ethereum was the birthplace of non-fungible tokens (blockchain-based ownership documents to digital and/or physical things). This year, more than three years after CryptoKitties, an early type of NFT before the word became widely known, broke the network, the industry took off in earnest. According to DappRadar, NFTs sold $2.5 billion in the first half of 2021, with Ethereum accounting for the majority of that.

    DAOs, or decentralized autonomous organizations, are also making a comeback. They use tokens to allow users to take part in decision-making for a protocol, corporation, or another form of organization. Ironically, a 2016 DAO known simply as The DAO came dangerously close to undermining Ethereum’s objectives when it raised 12.7 million Ether (then worth $150 million, now worth $30.4 billion) and was later abused. The attack, which resulted in the theft of millions of ETH, split the Ethereum blockchain into two camps: Ethereum Classic, where the exploit was still active, and Ethereum, where it was disabled.

    The majority of users stayed with Ethereum. It has also managed to keep its pricing high. Its current value of $2,400 is up sixfold from this time last year.

    In true blockchain tradition, when the proof-of-stake Ethereum 2.0 network launches, it will build on Ethereum’s history rather than deleting it. It’s simply the next step.

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