The Evolution of Ethereum
In order to comprehend the history of Ethereum, it is necessary to first mention Bitcoin, which had been in existence for several years prior to the creation of the cryptocurrency. Bitcoin was responsible for the creation of the first blockchain, and many of the concepts and code that underpin Ethereum would not have been possible without Bitcoin.
Vitalik Buterin, the inventor and co-creator of Ethereum, is a well-known figure in the cryptocurrency community. He was born in Russia in 1994, but he and his family immigrated to Canada with his parents in the year 2000. He began writing about Bitcoin for blogs when he was 19 years old, and he went on to co-found a website called "Bitcoin Magazine." As part of his work on Bitcoin, Vitalik also developed code for the cryptocurrency and other cryptocurrencies. Writing about Bitcoin and developing code for cryptocurrencies made him aware of the limitations and flaws that Bitcoin and other cryptocurrencies have, as well as the advantages that they have. Each new cryptocurrency necessitated the creation of a new network of computers, new developers, new code, and new hardware in order to function. Cryptocurrencies were all operated independently of one another, with no interaction or connection between them. In late 2013, Vitalik published a white paper on Ethereum, which was widely read. Initially, Vitalik was unsure of how the white paper would be received by the general public. He reasoned that he might have overlooked an obvious mistake or that it was simply not possible. In a statement, he said,
"When I first thought of Ethereum, my first thought was, okay, this thing seems too good to be true... but it turned out that the core Ethereum idea was good, fundamentally, completely, and completely sound."
On being questioned about how Vitalik came up with the name, he stated that he discovered it while researching elements of science fiction on the internet. His favourite part of the name was how it sounded, as well as that it contained the word "Ether," which is defined as a "hypothetical invisible medium that permeates the universe and allows light to travel." In the spring of 2014, Vitalik began developing Ethereum with the help of Gavin Wood and Jeffrey Wilke. It was then that the Ethereum "Yellow Paper" was published, which detailed the technical details of how Ethereum would operate. Ethereum would require a significant amount of development time and money to develop. A crowdfunding campaign was launched in order to raise funds for the development of the Ethereum platform. They were able to raise $18 million in just over a month in exchange for the Ether cryptocurrency, which was used to power the platform once it was launched. Ethereum was first made available to the public in mid-2015, following 18 months of development.
The DAO is an acronym that stands for the Department of Agriculture and Food.
Approximately one year after the release of Ethereum, a group of computer programmers created smart contracts on the Ethereum platform that became known as "The DAO." It stands for decentralised autonomous organisation, which is an abbreviation for DAO. It operates in a manner similar to that of a corporation or organisation structure, but all decisions are made by a vote of the DAO token holders. The DAO was created to function in a similar manner to a hedge fund for decentralised applications running on the Ethereum platform. Participants could pitch their dApp ideas, and members of the DAO would vote on whether or not the dApps should be funded or not. The DAO ran a crowdfunding campaign that raised more than 150 million dollars in less than a month, exceeding all expectations. After the crowdfunding campaign ended, it had nearly 15 percent of the total amount of Ether ever created in its possession.
As a result of the DAO attack,
Some people have expressed concerns about the DAO's security, particularly the vulnerabilities associated with withdrawals, which have been brought to our attention. Instructions are carried out in the order in which they are written in the computer code. Code that is written at the bottom of the page will only be executed after all of the code that came before it has been executed. In the DAO, the withdrawal function only made a change to the balance after the withdrawal had actually taken place. The following makes sense, and if the code is properly written, the programme will run as follows:
• The user submits a withdrawal request to the DAO for $100.
• A computer programme checks to see if the user has a balance of $100 or more.
• If the user has a balance of $100, then withdraw $100 from the user's account. • After the withdrawal, deduct $100 from the user's account balance.
The flaw in the DAO's code was that attackers were able to send multiple withdrawal requests before the balance was updated, resulting in a negative balance. Assume you have only $100 in your bank account at the time of writing. This would be analogous to going into a bank and asking for a teller to withdraw $100 from your account, as in the example above. The teller would first check to see if you had a balance of $100 and then go to the vault to withdraw the money from you. Meanwhile, you walk over to the next teller and request that they withdraw $100 from your bank account while the first teller is withdrawing money from the vault. Your balance is checked by the second teller. It is necessary to withdraw $100 from the vault because your balance has not yet been updated as a result of the withdrawal. When the first teller returns, she gives you $100 and updates your balance to $0, indicating that you have completely withdrawn all of your money. The second teller then returns and changes your balance to $0 as well, completing the transaction.
In both cases, they appear to be valid because when they checked, they discovered that you had money in your bank account. The balance had not been updated in a long time. Now that you have $200 in cash, you should go to the bank and deposit it there. Afterwards, you repeat the withdrawal procedure, this time asking for a $200 withdrawal from the first teller and another $200 from the second teller. This process continues until you have withdrawn all of the money from the bank's safe deposit box (safe). What happened to the DAO is similar to what happened to us. Deposits were made and then withdrawn from the DAO on a number of occasions, eventually resulting in the withdrawal of more than 50 million dollars from the DAO. This attack on the DAO, as well as the error that occurred as a result of poorly written computer code, do not indicate a vulnerability in the Ethereum platform. Similarly to a website that is accessible via the internet, the DAO is an application written on the Ethereum platform and running on it. According to Gavin Wood (the co-founder of Ethereum), claiming that Ethereum was hacked because the DAO was hacked is analogous to claiming that the internet is down because one website isn't functioning properly.