Eighteen months and roughly $18m after it was first announced, Ethereum has launched.
Arguably the most ambitious 'crypto 2.0' project to date, and the third-largest crowdfunded project of all time, Ethereum is aiming to create a new universe of programmable contracts, powered and secured by its own proof-of-work blockchain.
Grand in scale and flexible by design, it aims to decentralise pretty much anything on the Internet. "What bitcoin does for payments, Ethereum does for anything that can be programmed," the site reads.
This Monday, Stephan Tual, Ethereum's CCO, confirmed in a company blog post that the platform's code had now been 'frozen' for two weeks, with all technical features prepped.
The launch of the Ethereum mining network and the ability to execute contracts happened earlier today, following eight proof-of-concepts and a barrage of stress tests in the last release, Olympic. The formal launch had been pushed back multiple times.
Though it's publicly available, Frontier – which comes in a "bare bones" command line format – is aimed squarely at developers as a live testing environment. Only this time, real funds are at stake.
Speaking to CoinDesk, release co-ordinator Vinay Gupta warned potential users that Frontier will be a complex technical release, not for the faint of heart:
"Don't put a lot of value at risk unless you really, really are sure you know what you are doing, and you're confident about your risk assessment of the network."
Non-developers will have to wait for a UI in Ethereum's next release, Homestead, which is expected in two to four months. Serenity, the final version of the platform, may be up to 12 months away.
Timeline of events
Following the creation of the Ethereum genesis block, which contains all transactions from its $18m crowdsale, users are now able to mine and trade the platform's native token, ether (ETH).
Unlike bitcoin, ether is not intended to be used as a global digital currency. Rather, to perform any action on the network, users need to pay an amount of ether. Those who validate transactions on the network, as with bitcoin, will be rewarded in ether for any resources they contribute via mining.
In essence, its a large pay-as-you-go computer, with ether – computational power – the currency that brings these computerised functions to life. The more you need the computer to do, the higher the fee.
In the first tentative days of the platform – known as the 'thawing phase' – the supply of ether will be normal, 5 ETH per block, which are created roughly every 12 seconds. Transactions will not be available in the thawing phase, while the network ramps up.
Technically, anyone with a GPU will be able to act as one of Ethereum's mining nodes as it employs an ASIC-resistant mining algorithm to help prevent a single miner monopolising the network. However, should something go awry, the development team will still have a degree of control over the network, in the form of so-called 'kill switches', or canary contracts that signal to miners there is a problem with the fork they are working on.
True decentralisation comes later, Gupta said:
"We'd originally thought about running Frontier with a huge range of intervention points in case something spun out technically. But for a variety of reasons we've pulled back to the kill switches only ... Those switches are what make Frontier the 'live test' that it is. Once we're confident it's all solid, we pull them out."
Once the platform is deemed stable enough by Ethereum’s developers and auditors it will migrate to ‘Homestead’. Previously, all smart contracts would be wiped during this process, but the team say this is no longer the case.
The brainchild of Vitalik Buterin, a 21-year-old college dropout and Peter Thiel fellow, Ethereum first surfaced as a white paper in 2013 and was announced at the Miami's North American Bitcoin Conference the following January.
The glut of 2.0 platforms – such as Factom and Counterparty – often function by running abstratction layers on top of the bitcoin blockchain. However, Ethereum made the decision to create a purpose-built platform for these functions from scratch, building its own programming languages (Serpent and Solidity), comms system (Whisper), peer-to-peer file sharing network (Swarm) and a browser for Ethereum-built apps (Mist).
Whereas bitcoin aimed to take the central processor out of payments, Ethereum is seeking to decentralize all manner of Internet services, making them cheaper, faster and more accessible by moving power away from a central server and placing it into the hands of users.
The platform intends its primary user base to be developers who want to create and distribute peer-to-peer apps.
In the future, Ethereum aims to govern itself using its own system, if it can be mathematically represented it can be modelled, secured and traded.
Much to prove
Given the project's grand scope, it has drawn some criticism from the bitcoin community and beyond.
Some of the more common complaints center on the fact that the bitcoin network has continued to improve and develop since Ethereum was first conceived. For example, the Tim Draper-backed startup Mirror is reportedly working on bringing native smart contracts to the bitcoin blockchain.
Rudimentary versions of Ethereum smart contracts – one of the project's principal selling points – are already available on the bitcoin network today to users of Counterparty, which made a point of porting this functionality from the project to its own testnet in November.
Bitcoin developers like Mike Hearn, for example, have sought to frame the project as overambitious given that bitcoin has a scripting language, that while rudimentary, has yet to be fully explored.
A recent white paper from the National University of Singapore also raised questions about how the Ethereum network incentivizes its users to achieve consensus, finding that honest miners may prove vulnerable to attacks given the Turing-complete nature of its programming.
At issue was the idea that transaction validators on the Ethereum network have arguably more control over operations than in bitcoin, a criticism members of the project addressed.
"The bottom line is that clients have a ton of liberty about what they store, and if people start to feel real pain about blockchain size, clients will adapt to reduce what they store in a variety of ways," Gupta told CoinDesk, adding:
"The initial clients aren't particularly optimized for storage efficiency because, frankly, £100 buys you two terabytes in Maplin - disk is nearly free today. Over time it will be more of an issue, and I expect we'll sort it out then."
Cornell professor Emin Gun Sirer told CoinDesk that while he believes smart contracts open up a level of expressivity in payment systems, the project's broader goals of decentralization are perhaps naive.
"The killer apps for smart contracts have not been designed yet ... I'm a big proponent of Ethereum and smart contracts, though I believe in this case the hype and the fantasy-borne use cases overstep the capabilities of the platform."
Pete Rizzo contributed reporting.
For more on the project, watch its latest promotional video below: