The Birth of Ethereum

All great innovations solve real problems, and Ethereum is no exception. Ethereum was conceived at a time when people recognized the power of the Bitcoin model, and were trying to move beyond cryptocurrency applications. But developers faced a conundrum: they either needed to build on top of Bitcoin or start a new blockchain. Building upon Bitcoin meant living within the intentional constraints of the network and trying to find workarounds. The limited set of transaction types, data types, and sizes of data storage seemed to limit the sorts of applications that could run directly on Bitcoin; anything else needed additional off-chain layers, and that immediately negated many of the advantages of using a public blockchain. For projects that needed more freedom and flexibility while staying on-chain, a new blockchain was the only option. But that meant a lot of work: bootstrapping all the infrastructure elements, exhaustive testing, etc.

Toward the end of 2013, Vitalik Buterin, a young programmer and Bitcoin enthusiast, started thinking about further extending the capabilities of Bitcoin and Mastercoin (an overlay protocol that extended Bitcoin to offer rudimentary smart contracts). In October of that year, Vitalik proposed a more generalized approach to the Mastercoin team, one that allowed flexible and scriptable (but not Turing-complete) contracts to replace the specialized contract language of Mastercoin. While the Mastercoin team were impressed, this proposal was too radical a change to fit into their development roadmap.

In December 2013, Vitalik started sharing a whitepaper that outlined the idea behind Ethereum: a Turing-complete, general-purpose blockchain. A few dozen people saw this early draft and offered feedback, helping Vitalik evolve the proposal.

Both of the authors of this book received an early draft of the whitepaper and commented on it. Andreas M. Antonopoulos was intrigued by the idea and asked Vitalik many questions about the use of a separate blockchain to enforce consensus rules on smart contract execution and the implications of a Turing-complete language. Andreas continued to follow Ethereum’s progress with great interest but was in the early stages of writing his book Mastering Bitcoin, and did not participate directly in Ethereum until much later. Dr. Gavin Wood, however, was one of the first people to reach out to Vitalik and offer to help with his C++ programming skills. Gavin became Ethereum’s cofounder, codesigner, and CTO.

As Vitalik recounts in his “Ethereum Prehistory” post:

This was the time when the Ethereum protocol was entirely my own creation. From here on, however, new participants started to join the fold. By far the most prominent on the protocol side was Gavin Wood…​

Gavin can also be largely credited for the subtle change in vision from viewing Ethereum as a platform for building programmable money, with blockchain-based contracts that can hold digital assets and transfer them according to pre-set rules, to a general-purpose computing platform. This started with subtle changes in emphasis and terminology, and later this influence became stronger with the increasing emphasis on the “Web 3” ensemble, which saw Ethereum as being one piece of a suite of decentralized technologies, the other two being Whisper and Swarm.

Starting in December 2013, Vitalik and Gavin refined and evolved the idea, together building the protocol layer that became Ethereum.

Ethereum’s founders were thinking about a blockchain without a specific purpose, that could support a broad variety of applications by being programmed. The idea was that by using a general-purpose blockchain like Ethereum, a developer could program their particular application without having to implement the underlying mechanisms of peer-to-peer networks, blockchains, consensus algorithms, etc. The Ethereum platform was designed to abstract these details and provide a deterministic and secure programming environment for decentralized blockchain applications.

Much like Satoshi, Vitalik and Gavin didn’t just invent a new technology; they combined new inventions with existing technologies in a novel way and delivered the prototype code to prove their ideas to the world.

The founders worked for years, building and refining the vision. And on July 30, 2015, the first Ethereum block was mined. The world’s computer started serving the world.