In late 2013, Vitalik Buterin was working on the Mastercoin project. Being an early Bitcoin enthusiast, he envisioned blockchain as more than just a payment system. Ethereum, in the companies own words, is “a decentralized platform that runs smart contracts: applications that run exactly as programmed without any possibility of downtime, censorship, fraud or third-party interference”.
In November 2013, Buterin wrote a whitepaper proposing Ethereum, and the idea gained significant interest. The concept became a reality and the Ethereum core team consisted of Mihai Alisie, Anthony Di Iorio, Charles Hoskinson and Vitalik Buterin. Buterin presented at a Bitcoin conference in Miami in January 2014. The participants gave him a standing ovation and a lengthy Q&A session followed.
A crowdfunding campaign ran from July to September 2014 and a total of 60 million Ether (the primary cryptocurrency of the Ethereum platform) were created to sell. The price was 2,000 Ether (ETH) = one Bitcoin (BTC) for the first 14 days of the sale. The price then changed to 1,339 ETH per BTC for the remainder of the campaign.
The first two weeks of the campaign sold over 50 million tokens. 31.5k Bitcoins were raised through the crowdsale. Also, 12 million ETH were created which would be used as the funding for the development and other activities. A non-profit organization, the Ethereum Foundation was formed on 6th July 2014 and registered in Zug, Switzerland. The organisation governs the Ethereum project.
In 2016, a Decentralised Anonymous Organisation (DAO) was formed on the Ethereum platform. It is similar to a board of directors of a company. But the participants are anonymous and hold Ether to have voting rights.
An attacker exploited the DAO and stole Ether amounting to $50 million. This was, however, not a vulnerability of the Ethereum platform. The developers of DAO deployed it without careful auditing. The Ethereum Foundation came forward to reverse the attack. A soft fork attempt, which doesn’t alter anything on the blockchain permanently, was futile. Then, a hard fork was performed, and the lost funds were recovered.
A faction of Ethereum community was not happy with the hard fork. And they continued to follow the old blockchain, which is now known as Ethereum Classic.
A fund called the Ethereum Foundation Grant has been allocated to back projects that focus on improving the Ethereum platform. On 7th March 2018, the first series of beneficiaries were announced with a grant of $2.5 million. To be eligible for the next series of funding, the areas of focus must be scalability, usefulness and security. And any individual can get Hackternships, which fund the pet projects of individuals that are related to the Ethereum platform.