Ethereum's birthday

Happy birthday, Ethereum! Nine years ago, the first block of Ethereum was mined.

Why it matters: Ethereum is the $400 billion Pepsi to Bitcoin's $1 trillion Coke, and it's unlikely any other project will usurp either of them any time soon.

Catch up quick: A gawky, youthful Vitalik Buterin had the idea for Ethereum, which galvanized a bunch of blockchain notables to build the thing.

• It was funded by allowing people to buy its coin of the realm, ether (ETH) — its equivalent of bitcoin (BTC), before the chain even existed.

The big picture: Ethereum's big idea was to create a blockchain that could run full computer programs in a decentralized way, allowing them to operate without the need for a company or people to keep them going.

• People call these "smart contracts," but they are just software.

Ethereum has had some dramatic moments.

• The DAO was an attempt to create a permissionless hedge fund using tokens. We never really found out if it was a good idea, though, because it got hacked in 2016, which put $60 million of user funds and the whole future of the project at risk.
• So, controversially, they rolled back the chain — which is not supposed to happen, in principle.

Yes, but: Only a year later, $160 million was lost in a software bug on a smart contract, but the community did not fork the chain this time, because leaders believed the ecosystem was strong enough. (They were right.)

• (Neither the hack nor the bug was on Ethereum itself, but on smart contracts built atop it.)

Friction point: Initial coin offerings were a questionably legal approach to capital formation that popped off in 2017. People would sell tokens for applications that didn't exist. Billions were raised this way before the SEC came knocking.

• DeFi summer took off in 2020, when people figured out that giving away tokens was a great way to get people to make temporary deposits in decentralized finance apps, giving them liquidity for users.

Fun fact: Non-fungible tokens had been around for years, but somehow they became the new hotness in early 2021, which drove the market to new highs that year.

In 2022, Ethereum pivoted its security model from proof-of-work, like Bitcoin, to proof-of-stake, which dramatically lowered the energy overhead of the blockchain.

• Did it have any impact on the negativity of crypto haters? Nope.

The latest: The launch of ether ETFs — enabling Wall Street types who need regulated products to bet on Vitalik's baby.