This story began in 2014 when a young Russian guy arrived in Hangzhou, China. At an exhibition, he generously distributed 5,000 virtual coins, trying to introduce people to his technology. However, almost everyone at that time was filled with skepticism, viewing him as a fraud, and only a very few believed in him.
However, a few years later, those 5,000 virtual coins that were initially given away unexpectedly appreciated to $150 million...
These virtual coins are precisely Ethereum (ETH), and that young man is V God (Vitalik Buterin) — a name now widely known.
You may be curious, what exactly is Ethereum? Is it a currency, a technology, a tool, or the cornerstone of the future world?
To me, Ethereum is a legendary story, an even more exciting tale than Bitcoin.
1. The Path of Growth
From ages 13 to 16, V God was a teenager obsessed with online games, particularly fond of the warlock character in (World of Warcraft). However, after a game update, the game developer Blizzard removed one of V God's favorite skills.
This experience made V God deeply realize that on the internet, all players are in a disadvantaged position, which is an inherent problem of all centralized services.
Since then, V God bid farewell to (World of Warcraft) and kept pondering whether there was a way to break the centralized model. Until he was 17, he discovered Bitcoin.
The decentralized nature of blockchain deeply attracted V God, but as he delved deeper, he discovered the limitations of Bitcoin and the enormous market demand. Thus, he created Ethereum.
2. The Miracle Road Begins
At the end of 2013, V God published a paper titled (Ethereum: A Next-Generation Smart Contract and Decentralized Application Platform). In this paper, he analyzed the design, advantages, and shortcomings of the Bitcoin system in detail and elaborated on the potential of Ethereum to build various decentralized applications.
Unexpectedly, upon publication, this paper immediately caused a sensation. The Bitcoin community widely praised it, and some actively sought to collaborate with V God.
In May 2014, Vitalik Buterin (V God) first came to China to prepare for the upcoming Ethereum crowdfunding pre-sale.
During this trip to China, V God met numerous industry giants and elaborated on the concept of Ethereum. However, some expressed skepticism towards him, even saying to his face, 'You are a fraud!' and then kicked him out.
In July 2014, Ethereum officially planned to launch the Ethereum coin crowdfunding, and the entire process went very smoothly, with the Ethereum team successfully raising 31,000 Bitcoins.
3. The Reluctant Fork: The Birth of ETC
In 2016, the Ethereum community launched a project called 'The DAO' aimed at decentralized investment and fund management. However, this project became a target for hackers, resulting in 3.6 million Ether (ETH) being stolen due to vulnerabilities in the smart contract. This incident severely shook people's confidence in the security of Ethereum.
To compensate the victims, Ethereum's founder V God (Vitalik Buterin) and the Ethereum Foundation decided to carry out a hard fork to reverse the previously stolen funds. However, some members insisted that the code of the smart contract should not be changed, and they continued to mine on the original Ethereum chain.
This led to the emergence of two completely different chains: Ethereum Classic (ETC) and Ethereum (ETH). Surprisingly, despite the chaos caused by the fork, the post-fork ETC attracted a large number of investors and received widespread attention and support for a period of time.
4. The Rise of Graphics Cards
With the arrival of the cryptocurrency bull market in 2017, more and more people began to get involved with Ethereum (ETH), and major exchanges in China also launched ETH trading pairs. This was an unprecedented move, as in previous years, almost no new digital currencies had been listed for trading. This clearly indicated the appeal of ETH.
The rise of ETH has triggered many people's sensitivity to business opportunities. As ETH can only be mined using graphics cards (GPUs), which are standard hardware in almost every computer, many people joined the ranks of mining. The prices of graphics cards surged, and some even sold graphics cards where nearly 9.5 cards were used for mining, with only half a card used for gaming.
5. The Crazy ICO
ICO (Initial Coin Offering) became a crowdfunding method, allowing projects to conveniently raise funds in a decentralized manner using Ethereum (ETH). Therefore, in 2017, almost all projects chose Ethereum for fundraising, including EOS, Qtum, and so on. This trend created enormous wealth but also triggered a massive bubble. Even a virtual pet project on Ethereum could easily push up the price of ETH. This ICO frenzy lasted until September 4, 2017, when some countries explicitly banned ICOs, and this craze gradually came to an end.
6. Fallen from Grace
On March 12, 2020, with the arrival of the bear market and the Federal Reserve's continuous market interruptions, the market value of virtual coins rapidly declined, and the price of Ethereum (ETH) plummeted from the previous bull market high of $1,500 to a shocking $87. This steep price drop triggered panic among investors, who rushed to sell ETH, losing confidence in it.
7. The Explosion of DeFi
DeFi (Decentralized Finance) is a financial system that uses smart contracts to realize the collateralization of virtual currencies and the generation of dividend tokens. In 2020, the total locked value of DeFi protocols exceeded $10 billion, achieving over 2000% growth, constructing a global decentralized financial ecosystem.
In the DeFi field, the token YFI (Yearn.Finance) representing dividends has also seen increases of hundreds or even thousands of times, highlighting the market's extraordinary prosperity. Most of these DeFi projects are built on the Ethereum (ETH) network, further promoting the development and success of Ethereum.
8. The Birth of a New King
In 2021, with the bull market in the cryptocurrency market, the price of Ethereum (ETH) soared, reaching a peak of $4,850, an increase of 16,000 times from its initial issuance price. This rise boosted the prices of products and projects related to Ethereum, including virtual world land worth millions of dollars and NFT (non-fungible token) projects worth millions of dollars. These phenomena became hot topics at that time, akin to legendary stories of the era, drawing widespread attention.
9. The Start of the Harvest
With Ethereum successfully transitioning from PoW (Proof of Work) to PoS (Proof of Stake) and the successful launch of Layer 2 (L2) networks, more and more people began to recognize a new opportunity for wealth, which is participating in new projects on the test network and receiving token rewards once the projects officially launch.
Many people created hundreds of new Ethereum addresses, easily participating in various project tests on the test network, thus earning millions or even tens of millions of dollars. This sparked interest among countless people, leading more to join the ranks of free token airdrop participants, with the vast majority of projects choosing ETH as their base token. This opportunity made people yearn to share in the dividends.
10. The Battle of L2
As the Ethereum mainnet became overloaded, transaction speeds slowed, and transaction fees rose, more and more people began to study Layer 2 (L2) networks. These L2 networks allow users to settle transactions internally and then batch send transaction records to the Ethereum mainnet for greater efficiency and profit.
With the rise of L2 networks, we have seen many competitors such as ARB, OP, ZKS, STRK, ZKEVM, LINEA, BASE, and so on. In the future, the field of cryptocurrencies will become a competition among L2 networks, and the eventual winners will be widely recognized.
The story of Ethereum and its founder V God is so colorful, filled with challenges and setbacks. This project has created many legends, and whether you are a novice investor or a veteran in the blockchain field, you should closely follow the development of Ethereum. It has become one of the miracles in the blockchain world, providing everyone with the possibility of wealth and opportunity. Keep exploring, and the future will be even more exciting.
