# Ethereum launch and the DAO event (2014–2016) By [BystrOFF](https://paragraph.com/@bystroff) · 2023-04-13 --- Several codenamed prototypes of Ethereum were developed over 18 months in 2014 and 2015 by the Ethereum Foundation as part of their [proof-of-concept](https://en.wikipedia.org/wiki/Proof_of_concept#Software_development) series.[\[5\]](https://en.wikipedia.org/wiki/Ethereum#cite_note-FOOTNOTETapscottTapscott201687-6) "Olympic" was the last prototype and public beta pre-release. The Olympic network gave users a [bug bounty](https://en.wikipedia.org/wiki/Bug_bounty) of 25,000 ether for stress-testing the Ethereum blockchain. On 30 July 2015, "Frontier" marked the official launch of the Ethereum platform, and Ethereum created its "genesis block".[\[5\]](https://en.wikipedia.org/wiki/Ethereum#cite_note-FOOTNOTETapscottTapscott201687-6)[\[26\]](https://en.wikipedia.org/wiki/Ethereum#cite_note-WSJFRONTIER-27) The genesis block contained 8,893 transactions allocating various amounts of ether to different addresses, and a block reward of 5 ETH.\[[_citation needed_](https://en.wikipedia.org/wiki/Wikipedia:Citation_needed)\] Since the initial launch, Ethereum has undergone a number of planned protocol upgrades, which are important changes affecting the underlying functionality and/or [incentive structures](https://en.wikipedia.org/wiki/Incentive_compatibility) of the platform.[\[31\]](https://en.wikipedia.org/wiki/Ethereum#cite_note-EFPROCESS-32)[\[32\]](https://en.wikipedia.org/wiki/Ethereum#cite_note-33) Protocol upgrades are accomplished by means of a [hard fork](https://en.wikipedia.org/wiki/Hard_fork).\[[_citation needed_](https://en.wikipedia.org/wiki/Wikipedia:Citation_needed)\] In 2016, a [decentralized autonomous organization](https://en.wikipedia.org/wiki/Decentralized_autonomous_organization) called [The DAO](https://en.wikipedia.org/wiki/The_DAO_\(organization\))—a set of smart contracts developed on the platform—raised a record US$150 million in a [crowd sale](https://en.wikipedia.org/wiki/Token_sale) to fund the project.[\[33\]](https://en.wikipedia.org/wiki/Ethereum#cite_note-WSJDAOCC-34) The DAO was exploited in June 2016 when US$50 million of DAO tokens were stolen by an unknown hacker.[\[34\]](https://en.wikipedia.org/wiki/Ethereum#cite_note-NYTDAOHACK-35)[\[35\]](https://en.wikipedia.org/wiki/Ethereum#cite_note-BIDAOHACK-36) The event sparked a debate in the crypto-community about whether Ethereum should perform a contentious "hard fork" to reappropriate the affected funds.[\[36\]](https://en.wikipedia.org/wiki/Ethereum#cite_note-IEEEDAOHK-37) The fork resulted in the network splitting into two blockchains: Ethereum with the theft reversed, and [Ethereum Classic](https://en.wikipedia.org/wiki/Ethereum_Classic) which continued on the original chain. ### Continued development and milestones (2017–present) In March 2017, various [blockchain](https://en.wikipedia.org/wiki/Blockchain) startups, research groups, and [_Fortune_ 500](https://en.wikipedia.org/wiki/Fortune_500) companies announced the creation of the Enterprise Ethereum Alliance (EEA) with 30 founding members.[\[38\]](https://en.wikipedia.org/wiki/Ethereum#cite_note-NYTEEA-39) By May 2017, the nonprofit organization had 116 enterprise members, including [ConsenSys](https://en.wikipedia.org/wiki/ConsenSys), [CME Group](https://en.wikipedia.org/wiki/CME_Group), [Cornell University's research group](https://en.wikipedia.org/wiki/Cornell_University#Research), [Toyota Research Institute](https://en.wikipedia.org/wiki/Toyota_Group), [Samsung SDS](https://en.wikipedia.org/wiki/Samsung_SDS), [Microsoft](https://en.wikipedia.org/wiki/Microsoft), [Intel](https://en.wikipedia.org/wiki/Intel), [J. P. Morgan](https://en.wikipedia.org/wiki/JPMorgan_Chase), [Cooley LLP](https://en.wikipedia.org/wiki/Cooley_LLP), [Merck KGaA](https://en.wikipedia.org/wiki/Merck_KGaA), [DTCC](https://en.wikipedia.org/wiki/Depository_Trust_%26_Clearing_Corporation), [Deloitte](https://en.wikipedia.org/wiki/Deloitte), [Accenture](https://en.wikipedia.org/wiki/Accenture), [Banco Santander](https://en.wikipedia.org/wiki/Banco_Santander), [BNY Mellon](https://en.wikipedia.org/wiki/BNY_Mellon), [ING](https://en.wikipedia.org/wiki/ING_Group), and [National Bank of Canada](https://en.wikipedia.org/wiki/National_Bank_of_Canada).[\[39\]](https://en.wikipedia.org/wiki/Ethereum#cite_note-IEEEEEA-40)[\[40\]](https://en.wikipedia.org/wiki/Ethereum#cite_note-EEA022217-41) By July 2017, there were over 150 members in the alliance, including [MasterCard](https://en.wikipedia.org/wiki/MasterCard), [Cisco Systems](https://en.wikipedia.org/wiki/Cisco_Systems), [Sberbank](https://en.wikipedia.org/wiki/Sberbank), and [Scotiabank](https://en.wikipedia.org/wiki/Scotiabank).[\[41\]](https://en.wikipedia.org/wiki/Ethereum#cite_note-42) By January 2018, ether was the second-largest cryptocurrency in terms of market capitalization, behind bitcoin.[\[42\]](https://en.wikipedia.org/wiki/Ethereum#cite_note-fortune20180108-43) As of 2021, it maintained that relative position.[\[3\]](https://en.wikipedia.org/wiki/Ethereum#cite_note-ft20210528-4)[\[4\]](https://en.wikipedia.org/wiki/Ethereum#cite_note-wsj20210603-5) In 2019, Ethereum Foundation employee [Virgil Griffith](https://en.wikipedia.org/wiki/Virgil_Griffith) was arrested by the US government for presenting at a blockchain conference in North Korea.[\[43\]](https://en.wikipedia.org/wiki/Ethereum#cite_note-44) He would later plead guilty to one count of conspiring to violate the International Emergency Economic Powers Act in 2021.[\[44\]](https://en.wikipedia.org/wiki/Ethereum#cite_note-45) In March 2021, [Visa Inc.](https://en.wikipedia.org/wiki/Visa_Inc.) announced that it began settling [stablecoin](https://en.wikipedia.org/wiki/Stablecoin) transactions using Ethereum.[\[45\]](https://en.wikipedia.org/wiki/Ethereum#cite_note-fortune20210329-46) In April 2021, [JP Morgan Chase](https://en.wikipedia.org/wiki/JP_Morgan_Chase), [UBS](https://en.wikipedia.org/wiki/UBS), and [MasterCard](https://en.wikipedia.org/wiki/MasterCard) announced that they were investing US$65 million into [ConsenSys](https://en.wikipedia.org/wiki/ConsenSys), a software development firm that builds Ethereum-related infrastructure.[\[46\]](https://en.wikipedia.org/wiki/Ethereum#cite_note-fortune20210413-47) There were two network upgrades in 2021. The first was "Berlin", implemented on 14 April 2021.[\[27\]](https://en.wikipedia.org/wiki/Ethereum#cite_note-bi20210413-28) The second was "London", which took effect on 5 August.[\[28\]](https://en.wikipedia.org/wiki/Ethereum#cite_note-cnbc20210805-29) The London upgrade included Ethereum Improvement Proposal ("EIP") 1559, a mechanism for reducing transaction fee volatility. The mechanism causes a portion of the ether paid in transaction fees for each block to be destroyed rather than given to the block proposer, reducing the inflation rate of ether and potentially resulting in periods of deflation.[\[47\]](https://en.wikipedia.org/wiki/Ethereum#cite_note-bloomberg20210307-48) On 27 August 2021, the blockchain experienced a brief [fork](https://en.wikipedia.org/wiki/Fork_\(blockchain\)) that was the result of clients running different incompatible software versions. ### Ethereum 2.0 Ethereum 2.0 (Eth2) was a set of three or more upgrades, also known as "phases", meant to transition the network's consensus mechanism to proof-of-stake, and to scale the network's transaction throughput with execution sharding and an improved EVM architecture.[\[49\]](https://en.wikipedia.org/wiki/Ethereum#cite_note-50) The switch from proof-of-work to proof-of-stake has cut Ethereum's energy usage by 99%. However, the impact this has on global energy consumption and climate change may be limited since the computers previously used for mining ether may be used to mine other cryptocurrencies that are energy-intensive. [https://opensea.io/assets/0xaDEE09a610FEC97C7425B02129D0ad612c56e08C/0](https://opensea.io/assets/0xaDEE09a610FEC97C7425B02129D0ad612c56e08C/0) --- *Originally published on [BystrOFF](https://paragraph.com/@bystroff/ethereum-launch-and-the-dao-event-2014-2016)*