10 years on: How Ethereum’s ICO changed the crypto landscape
(Coin Telegraph)-24/07/2024
The Ethereum initial coin offering (ICO) — one of the most important events in the history of cryptocurrency — began on July 22, 2014, just a little over 10 years ago.
The ICO ran for 42 days until Sept. 2 and allowed participants to buy 2,000 Ether for the price of 1 Bitcoin
Cointelegraph spoke with Nick Johnson, the lead developer of the Ethereum Name Service (ENS) and former member of the Ethereum Foundation, about Ethereum and how it changed his life and the crypto landscape forever.
“It heralded an enormous change in how we looked at crypto and looked at blockchains because while the Bitcoin EVM [Electron Virtual Machine] has some programmable functionality, it’s quite limited by design,” Johnson told Cointelegraph. “Ethereum really develops the idea of a general purpose Turing complete chain as being a valuable thing.”
With that general-purpose Turing complete chain came smart contracts and a far greater degree of programmability. As Johnson said, what Ethereum enabled is its legacy.
“You only have to look at the profusion of applications that weren’t even envisaged when it was originally designed, like [non-fungible tokens], like ENS. All the automated market makers and stuff like that […] All of those things have only been enabled because the Ethereum Foundation and Vitalik were building a general purpose chain rather than something solely focused around the exchange of value.”
How special is Ethereum?
Before the Ethereum ICO, other cryptocurrencies tended to be simple variations on the Bitcoin theme. For example, Litecoin started life as a Bitcoin clone with only a slightly modified codebase.
From its inception, Ethereum was different. Cointelegraph asked Johnson what crypto might have looked like if Ethereum had never been developed.
“At some point, somebody would have built something similar,” Johnson said. “But Ethereum made a lot of very smart technical decisions early on in the game. You only have to look at the profusion of Ethereum-compatible chains to see the enormous influence that it had on the development of the industry.”
That is not to negate the considerable impact that Ethereum had on shaping the industry and accelerating its growth.
“I think it moved things along a lot faster than they would have otherwise,” Johnson said.
Encountering Ethereum
Johnson said that in 2014, he started playing around with Bitcoin. He bought a few, and he sold a few. His curiosity in cryptocurrency was certainly piqued, but ultimately, he was “a bit disappointed with its limitations.”
“The programmable bit of programmable money was what interested me,” Johnson said.
It wasn’t until a couple of years later that Johnson’s path would take him back to the industry.
“In 2016, I was contacted by a large financial services company. I was working at Google at the time, and they wanted to know if I would like to come work for them on this thing called Ethereum,” he said.
Johnson duly attended the interview but left with absolutely no intention of joining the firm, describing the atmosphere as “suit and tie, staid, and not very interesting.”
Ethereum, however, was another matter entirely.
“I started playing around with it and very rapidly got hooked on it and started building Ethereum Solidity libraries and so forth,” he added. “Within a couple of months, I was contacted by the Ethereum Foundation asking if I’d like to interview for a role with them, and I jumped on the opportunity.”
The infamous DAO hack
Ethereum’s early years were not without controversy. In 2016, Ethereum launched its decentralized autonomous organization (DAO), raising $150 million.
The DAO was designed as a venture capital fund to help grow and build the Ethereum network and was initially hailed as a great success, but less than three months from its launch, the DAO was hacked to the tune of $60 million.
That’s something Johnson won’t forget in a hurry, he explained.
“That actually occurred as particularly memorable for me because [the hack] occurred on a Friday, and I was due to start work at the foundation the following Monday,” he said.
To combat the theft, the Ethereum network conducted a hard fork in July 2016 and rolled the blockchain back to before the hack. At the time, the hack and the later fork were two of the most controversial things to ever happen in crypto.
Furthermore, not everyone agreed to accept the fork, resulting in two competing Ethereum chains: Ethereum, which accepted the fork and its rollback, and Ethereum Classic, which did not.
Johnson acknowledged the stress and uncertainty of the time, saying that “it was very much a trial by fire.”
“From where we were standing, we saw this was a flaw in a smart contract. But it was so early on that we worried that people could easily have interpreted it as some sort of referendum on the system as a whole,” said Johnson.
But, while the DAO hack was highly contentious in 2016, time is a great healer of wounds. In 2024, the DAO hack is something nobody seriously thinks about.
Early days and the birth of ENS
Johnson joined the Ethereum Foundation during an initially chaotic period, but things soon settled down, and the real work could begin.
Cointelegraph asked Johnson about working at Ethereum in its very early days. Johnson worked with the Swarm team, which developed decentralized data storage, and Go Ethereum, an interface dealing with the Go programming language initially developed by Google.
Johnson described it as “very loosely managed” at that time, which allowed him the creative freedom he sought.
Johnson’s interest in internet infrastructure would eventually lead to him creating the Ethereum Name Service, based on the Domain Name System (DNS) of the internet.
“We went through an initial iteration that was completely different to the one we eventually launched. It was much more similar to DNS and based on that infrastructure,” Johnson said.
In the process of building it, however, Johnson learned lessons that reshaped the naming service and the form that the public got to see.
“We learned a lot about what would work better in this unique situation and restructured it in a way that works much better with Ethereum smart contracts,” he said.
The future of Ethereum
On its 10th birthday, Ethereum has matured considerably. In 2022, the network switched from proof-of-work consensus to proof-of-stake, and in March 2024, Ethereum launched the Dencun upgrade, reducing layer-2 transaction costs.
Cointelegraph asked what comes next for Ethereum and the Ethereum Name Service.
Johnson says that for both, the focus is “L2 and scalability.”
“ENS recently announced our L2 roadmap because we believe that L2 solutions are now mature enough for us to build on top of them. We need to build it in a way that works with all of the chains and preserves functionality,” said Johnson.
ENS is “kind of the same” as the wider Ethereum network in that regard, Johnson said, who predicted an even brighter future for Ethereum as scalability continues to improve.
