Like any anthropomorphised entity, Ethereum is the result of its cumulative experiences.
On 30 July 2015, a new baby Ethereum came into the world. Then lots of people started maniacally cooing over it and they haven’t stopped since, which is how it got to where it is today.
Ethereum has already returned their adoration many times over, and doesn’t show any signs of stopping.
Learning from mistakes
Ethereum has been the main driving force for most blockchain innovation, helping popularise the transition from the idea of blockchain as a vehicle for magic internet money, to the idea of blockchain for everything.
Ethereum’s position as a driving force for innovation has been apparent even at its ostensibly low points. The DAO Hack is practically a distant memory now, but in hindsight the $60 million lost seems a small price to pay for the lessons it taught about security, decentralisation and the stakes at play. Similarly, the actually-not-that-fateful decision to split off into Ethereum Classic has also turned out to not really matter, while being a teachable moment.
By making those big mistakes early, the Ethereum community was better able to shrug off later misadventures like the $160 million Parity Wallet freeze. If the Ethereum community hadn’t navigated issues like forking to recover funds earlier, it probably would have done it later with much worse outcomes.
In hindsight, the cost of those incidents was quite low – although you’d probably have a different perspective on that if you personally lost funds – while the benefits were quite large.
The ICO boom was arguably a much bigger challenge, but also brought even more innovation and understanding.
At its peak about 80% of ICOs were scams while 19% were just plain bad. This era is best exemplified by an ICO called BlockBroker, which launched an ICO to raise funds for a project that would somehow use tokens to fight ICO fraud, before exit scamming itself.
With every new scam depleting public goodwill and tarnishing the entire industry, the biggest pessimists at the time were ready to write the whole thing off as another failed experiment. And yet, a few years later we can see the lasting benefits of the boom.
The scam waves washed a lot of garbage onto the beach of innovation, but they also brought lots of beautiful seashells that still remain today while most of the garbage is long gone.
ICOs created success stories like Binance, which is itself now pouring money into other blockchain developments, as well as many of the DeFi projects that appear on track to define Ethereum in its current phase, such as Chainlink, Synthetix and many more.
Just as importantly, the sheer excesses of the era finally forced regulatory intervention, which helped bring some order to the chaos and encouraged a more nuanced, pragmatic vision of what Ethereum could be, how it could grow and where the worlds of centralised and decentralised finance might one day meet.
Growing up libertarian and then going out into the world and noticing that actual regulators were nicer to me than many “cypherpunks” was very disorienting😖
— vitalik.eth (@VitalikButerin) February 15, 2018
Disclosure: The author holds cryptocurrencies including BTC, ETH, BNB, KDA, BAND, CELO, FET, HBAR at the time of writing
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