Ethereum was introduced in 2013 in the form of a document, the ”White Paper”, proposing an evolution of the Bitcoin protocol. It was written by Vitalik Buterin, a young programmer who was part of the Bitcoin teams and co-founder of Bitcoin Magazine. Quickly, the concept attracted the interest of other cryptocurrency enthusiasts at the time, who joined the project. To name a few: Anthony Di Iorio, Charles Hoskinson, Joseph Lubin or even Gavin Wood. These people are now considered the co-founders of Ethereum. The Bitcoin development team does not adopt the proposal, so the founders decide to create their own blockchain.

To make his project a reality, Vitalik Buterin is launching a participatory funding campaign. A Bitcoin fundraiser takes place from September 2, 2014 in order to finance the developments needed to launch the network. He manages to raise $18.3 million. Stirred by the project’s goals, programmers get involved and the first version of Ethereum is released in 2015 under the name ”Frontier”.

Of course, this kind of program can be created on a conventional computer, through a website such as eBay for example. However, smart contracts have a number of advantageous features:

But smart contracts also have a number of drawbacks:

Instantly, the new asset is exchangeable, secured by the network, interoperable with the entire Ethereum ecosystem. Creators simplify their lives and use the existing infrastructure more or less for free.

What is an ICO – Initial Coin Offering?

The primary use of tokens has been to launch fundraising for various projects: this is known in English as an ICO, for Initial Coin Offering. It is the counterpart of an IPO in the cryptocurrency world.
Thanks to Ethereum’s smart contracts, almost every cryptocurrency project that was looking for funding in 2017 conducted an ICO, setting specific conditions such as the minimum amount of funds to be raised, the maximum amount of funds that could be raised, etc. Once the process was complete, the tokens were sent to investors.
Example: Augur, a predictive markets platform, was the first project designed on the Ethereum blockchain to raise funds via an ICO, in 2015. This allowed them to raise $5 million in ethers by selling each of their tokens for $0.6.
This ICO craze has now largely faded, with a number of projects failing to deliver on their initial promises.

Interacting with a smart contract is relatively complicated, as you have to write computer code to do so. But if we create a web interface to interact with the services it offers, anyone can now have access to it. This is the concept of ”dapp”, for decentralized application.

One of the use cases that are emerging at a rapid pace are decentralized financial applications. This field now has a name: DeFi, for decentralized finance. In short, these applications allow, for example, to take out a loan, to lend money or to trade without going through a centralized intermediary, and all this with a few clicks.

Some projects have already established themselves well in their field, such as MakerDAO to obtain pawn loans in ethers, or Aave to lend one’s cryptocurrencies and obtain a return in exchange.
Several tokens in the DeFi sector today represent fairly successful products, most of which offer an interesting return on investment, financed by the use of the platform itself.

In the market, Ethereum’s value is represented by the ether price, which is set, as with Bitcoin, by supply and demand. The ether is also listed on many exchange platforms. Its price is influenced by the news around its ecosystem but also by speculation, as for any financial asset.

Ethereum has become a fundamental platform in the cryptocurrency ecosystem. New projects are created almost every day on its blockchain. Although in 2021, the network is not free of all reproach, especially around transaction fees, developments are numerous, improvements are underway and the price of ether should reflect this evolution sooner or later.

But beware, if investing in ether in the medium or long term can be a wise choice, one should not neglect its high volatility: its value can rise or fall sharply in the space of a few days only.

For example, at the beginning of 2018, the ether price was setting a record at 1100 euros before suffering a sharp decline of almost 90%. By December 2018, the price was only worth 75 euros. Since the summer of 2020, a strong uptrend has returned, with the price gaining about 1200% over a year to be around 1500 euros.