The Web3 Story
by Uday Singh
I have always been skeptical of blockchain since 2008, always thought of crypto as scams, lost significant dollars in shit coins in 2018. Then, in 2024, during the national elections in India, news started breaking about the voting process being compromised in certain parts of the country, citizens being threatened and beaten to deter them from voting, and news channels pushing right-wing propaganda round the clock. Similar scenarios played out globally over the last few years, with governments controlling media outlets and fabricating false narratives. Fake news was not a thing a decade back, and now it’s hard to differentiate between real vs fake news. The democracies across several countries have been declining or they are a mystery to begin with — India, USA, China, Russia!
The transition from autocracies and monarchies to democracies took centuries and cost countless lives. Many were murdered, and many sacrificed their lives for the cause of democracy. Yet, in the 21st century, elected leaders attempt to undermine democratic values to serve their wealthy benefactors. This realization led me to delve deeply into the study of decentralization. Decentralization is the future. Companies, Govenments, Finance, Education will all be decentralised very soon! Satoshi Nakamoto initiated it, Vitalik and the team propelled it, and the momentum continues to grow. Centralized systems will become as detested as monarchies are today!
Web3 has come a long way since Bitcoin’s debut in 2008. Bitcoin’s market cap skyrocketed from zero to $1.3 trillion by June 2024. Along the way, we’ve seen decentralization protocols take shape, radical ideas emerge, scams proliferate, engineers land in prison, billions of dollars traded daily, numerous countries banning crypto, regulatory nightmares, bitcoin becoming legal tender and open source efforts driving continuous technological growth.
And the story begins —
The year is 2008…
The Great Banking Scam of the year 2008 and the birth of Bitcoin 🏦
It’s the year 2008, and the world is in financial turmoil. Thanks to greedy investment bankers! Banks are crashing, people are losing their homes, and the global economy is spiraling faster than a cat chasing its tail. Enter Satoshi Nakamoto, a mysterious figure — or maybe a team of figures — who decides it’s time to change the game.
Satoshi Nakamoto is a mystery to date. Could be a dude, a dudette, a group of super-smart people or Kim jong un! Satoshi’s frustration with the traditional financial system reaches its peak. “Why should a handful of bankers in suits control everyone’s money?” they think. “There has to be a better way!” And so, the idea of Bitcoin is born. It’s like a lightbulb moment, but instead of a regular lightbulb, it’s a flashing neon sign that says “REVOLUTION!”
Satoshi releases a whitepaper, titled “Bitcoin: A Peer-to-Peer Electronic Cash System.” The whitepaper is like a manifesto for a new world order where people can exchange value directly, without needing a middleman. It’s decentralized, it’s secure, and it’s exactly what the world needs.
The year is 2009…
The first bitcoin is mined ₿
In January 2009, Satoshi mines the very first Bitcoin block, the “Genesis Block.” It’s like the Big Bang of cryptocurrency. Embedded in this block is a headline from The Times: “Chancellor on brink of second bailout for banks.” It’s a cheeky nod to the failing financial system that Bitcoin aims to replace.
The year is 2010…
Two pizzas are bought with 10,000 bitcoins 🍕🍕
At first, Bitcoin is just a quirky experiment. Nerds and tech enthusiasts are buzzing with excitement, trading Bitcoins for fun. Then, in 2010, something magical happens. A guy named Laszlo Hanyecz buys two pizzas for 10,000 Bitcoins. Yes, you heard that right — 10,000 Bitcoins for two pizzas! Today, that would be worth millions. Talk about an expensive snack!
Bitcoin exchange Mt. Gox launches
Bitcoin exchange Mt. Gox launched in July 2010 by programmer Jed McCaleb. Initially, the site was created as an online platform for trading Magic: The Gathering cards (hence the name “Mt. Gox,” which stands for “Magic: The Gathering Online Exchange”). However, McCaleb quickly realized the potential for Bitcoin trading and repurposed the site to become one of the first Bitcoin exchanges.
As Bitcoin starts gaining traction, Satoshi decides it’s time to step back. Like a mysterious superhero who finishes saving the day and then vanishes into the night, Satoshi disappears. They hand over the reins to a few trusted developers and fade into the background, leaving us all wondering, “Who was that masked hero?”
The year is 2011…
Bitcoin reaches $1 for the first time
Then came the historic milestone, Bitcoin reached $1 based on the data from Mt Gox exchange on Feb 09, 2011.
Satoshi’s creation, Bitcoin, grows beyond anyone’s wildest dreams. It spawns a whole new financial ecosystem, inspires thousands of cryptocurrencies, and sparks a revolution in how we think about money. Satoshi Nakamoto becomes a legend, a symbol of innovation and rebellion against the old financial order.
So What’s Bitcoin exactly?
If you’ve got money, all you really have is a line in your bank’s database telling them how much cash you’ve got. And if you own some stock, it’s basically just your name on a list — kept by the company or, more likely, some middleman — saying you own a piece of that company.
Bitcoin is a large digital ledger that everyone can see, but no one can mess with(okay, one can but it will cost billions of dollars in 2024!). People called miners use supercomputers to solve complex puzzles that keep the Bitcoin network secure and running smoothly. When they solve these puzzles, they get rewarded with — you guessed it — more Bitcoin! Bitcoin isn’t controlled by any government or company.
Bitcoin is like having a secret identity. You have a public key (kind of like your email address) that people can send Bitcoin to, and a private key (your super-secret password) that lets you spend it. No one knows your real name, just your public key. So, you can be Batman with a bank account!
Bitcoin is a decentralized digital currency that operates on a peer-to-peer network. At its core is a public ledger called the blockchain, which records all transactions ever made with Bitcoin. These transactions are grouped into blocks, with each block containing a list of transactions and a reference to the previous block, forming a chronological chain. This chain of blocks ensures the integrity and security of the ledger, as altering any past transaction would require changing all subsequent blocks, a computationally infeasible task.
Transactions in Bitcoin involve inputs and outputs, where inputs reference previous unspent transaction outputs (UTXOs) and create new UTXOs as outputs. Each transaction is signed with the sender’s private key, providing cryptographic proof of ownership and authorization. This cryptographic signature ensures that only the owner of a Bitcoin can spend it, preventing double-spending and unauthorized transactions.
Bitcoin mining is the process by which new bitcoins are created and transactions are confirmed. Miners compete to solve complex mathematical puzzles, with the first one to solve the puzzle adding a new block to the blockchain. This process, known as Proof of Work (PoW), requires significant computational power and electricity consumption. In return for their efforts, miners receive newly minted bitcoins as rewards, along with transaction fees included in the block.
Bitcoin’s supply is capped at 21 million coins, making it deflationary in nature. The issuance of new bitcoins is halved approximately every four years in an event called the halving, reducing the rate of new coin creation over time. As Bitcoin’s adoption and usage grow, transaction fees are expected to become the primary incentive for miners, replacing block rewards as the main source of revenue.
Bitcoin’s value has been on a wild ride since it’s release. One day it’s worth thousands of dollars, the next it’s like a roller coaster taking a nosedive. It’s thrilling and terrifying. Some people think Bitcoin will replace traditional money, while others think it’s just a passing fad. But one thing’s for sure: it’s sparked a revolution in how we think about and use money. Whether you’re a skeptic or a believer, Bitcoin has changed the game.
The Altcoins Emerge
Bitcoin is good but not great, thought some guys. So, they designed systems that are faster and cheaper!
It’s year 2011, the first alternative cryptocurrencies, or “altcoins,” such as Litecoin and Namecoin, are created, expanding the blockchain ecosystem. Bitcoin’s already the cool kid on the block, but suddenly, a bunch of other cryptocurrencies enter the space.
Leading the charge was Litecoin, the hip new kid created by Charlie Lee, a former Google whiz. Litecoin wasn’t content being just another Bitcoin clone; oh no, it wanted to be the silver to Bitcoin’s gold. So, it sped things up with faster transactions and snazzy new features, making Bitcoin look like yesterday’s news.
But Litecoin wasn’t the only altcoin making waves. Namecoin sauntered onto the scene with its own party trick: a decentralized domain name system baked right into the blockchain.
Everyone wanted in on the altcoin action, and the cryptocurrency landscape was never the same again. The rise of altcoins in 2011 wasn’t just about shaking things up — it was about throwing open the doors to creativity and innovation. With each new altcoin came a fresh perspective and a bold vision for the future of digital currencies. And as the altcoin party continued to rage on, it set the stage for the diverse and dynamic crypto world we know and love today. So here’s to the altcoins of 2011: the rebels, the innovators, and the life of the cryptocurrency party!
The Silk Road 🌿
The wild west of the internet, where you could buy anything from rare collectibles to hard drugs. The Silk Road was like the Amazon of the dark web, and its currency of choice? Bitcoin, of course!
In 2011, this notorious online black market burst onto the scene, and it was a game-changer. Suddenly, Bitcoin wasn’t just for nerds and tech geeks — it was the hot new currency in the underworld. Need some vintage vinyl records? Sure. Looking for exotic spices? Why not. Shopping for…uh, let’s just say, more questionable items? The Silk Road had you covered.
Using Bitcoin, buyers and sellers could conduct their shady business with a sense of anonymity that traditional currencies just couldn’t offer. It was like having a secret handshake that let you trade anything you wanted without leaving a trace. People quickly realized that Bitcoin was not just some digital Monopoly money — it had real-world utility, especially in places where you didn’t want Big Brother watching.
But with great power comes great responsibility. The Silk Road highlighted some serious challenges for Bitcoin. Law enforcement agencies were not thrilled about this new frontier of untraceable transactions. They saw Bitcoin as the bad boy of the financial world, enabling all kinds of illicit activities without any oversight.
Despite its wild ride, the Silk Road saga was a pivotal moment for Bitcoin. It showcased the currency’s potential to revolutionize transactions, even if it did so by diving headfirst into the deep end of the dark web. It was like Bitcoin’s rebellious teenage phase — full of excitement, mischief, and a hint of danger.
The year is 2012…
Coinbase launched
Coinbase was launched in June 2012 by Brian Armstrong and Fred Ehrsam. Brian Armstrong, a former Airbnb engineer, started the company with the vision of creating an easy-to-use platform for buying and selling Bitcoin. Fred Ehrsam, a former trader at Goldman Sachs, joined shortly after, bringing his financial expertise to the startup. Together, they founded Coinbase, which has since grown to become one of the largest and most popular cryptocurrency exchanges in the world.
XRP Ledger launched 📒
Bitcoin is good as a store of value but not good enough to be used as a means of payment. It’s super slow and expensive.
The XRP Ledger, often referred to as the Ripple network, was launched in 2012 by three developers: David Schwartz, Jed McCaleb, and Arthur Britto. They were later joined by Chris Larsen, who helped co-found Ripple Labs (initially named OpenCoin) to develop and promote the Ripple payment protocol and its associated digital currency, XRP. The XRP Ledger is designed to facilitate fast and secure transactions across the globe, aiming to improve the efficiency of international payments.
First Bitcoin Halving happens
Bitcoin is designed to half the block reward every 4 years. The first Bitcoin halving, or Bitcoin split, occurred in 2012 when the reward for mining a block was reduced from 50 to 25 BTC.
The year is 2013…
The birth of a superhero of the crypto world — Ethereum
A young, bright-eyed coder named Vitalik Buterin and a bunch of cool folks in 2013 dreamed to take Bitcoin’s revolutionary concept and kick it up a notch. Vitalik looked at Bitcoin and thought, “Sure, it’s great, but what if we could do more? What if we could use blockchain for all kinds of applications, not just money?” And that led to the creation of Ethereum, the world’s first programmable blockchain.
Ethereum wasn’t just about sending and receiving cryptocurrency. They envisioned a platform where developers could build decentralized applications (dApps) using smart contracts — self-executing contracts with the terms directly written into code. In other words, Ethereum was like a giant, unstoppable computer that anyone could use.
They wanted to create a decentralized world computer where smart contracts could automate and facilitate a plethora of applications beyond just cryptocurrency transactions. To turn this ambitious vision into reality, they needed funding — lots of it.
So What’s Ethereum exactly?
Ethereum is a decentralized, open-source blockchain platform that enables developers to build and deploy smart contracts and decentralized applications (dApps). Unlike Bitcoin, which primarily serves as a digital currency, Ethereum is designed to be a versatile platform for a wide range of applications.
At its core, Ethereum operates on a blockchain, a decentralized ledger that records all transactions across a network of computers. Each node in the Ethereum network maintains a copy of this blockchain, ensuring transparency and security. Transactions on Ethereum are grouped into blocks, which are then cryptographically linked together in a chain. This structure ensures that once data is recorded, it cannot be altered or tampered with, providing an immutable record.
One of the key innovations of Ethereum is the Ethereum Virtual Machine (EVM). The EVM is a Turing-complete virtual machine that executes smart contracts. Smart contracts are self-executing pieces of code that run exactly as programmed without any possibility of fraud or third-party interference. The EVM processes contract bytecode, which is a low-level, platform-independent representation of the contract. This allows developers to write smart contracts in high-level programming languages, such as Solidity, which are then compiled to EVM bytecode for execution.
In the Ethereum network, every operation — whether it’s a simple transaction or the execution of a complex smart contract — requires computational resources. To manage these resources, Ethereum uses a system called “gas.” Gas is a unit that measures the amount of computational effort required to execute operations. Users pay gas fees to miners for processing their transactions and running their smart contracts. The amount of gas required depends on the complexity of the operation, and the gas price is determined by the user, who sets it according to how much they are willing to pay per unit of gas.
And how does it work?
Users initiate transactions through their wallets, signing them with their private keys. These transactions are then broadcast to the network and enter the mempool, where they await validation. Miners select transactions from the mempool based on gas fees — higher fees typically get prioritized. These transactions are bundled into a candidate block that the miner attempts to add to the blockchain. Miners compete to solve a cryptographic puzzle. This puzzle involves finding a hash value that is lower than a predetermined target. The hash is derived from the block’s contents and a variable called the nonce. Miners increment the nonce and rehash the block’s data repeatedly until they find a valid hash. Once a miner finds a valid hash, they broadcast their block to the network. Other nodes validate the block, checking the proof of work and ensuring all transactions comply with protocol rules (e.g., no double-spending, sufficient balances). If the block is valid, nodes add it to their copy of the blockchain. The network confirms the block, and the transactions within it are considered finalized. The miner who found the valid hash is rewarded with newly minted Ether (ETH) and the transaction fees from the included transactions. (Note that this is the working with Proof of Work which was replaced by Proof of stake in 2022).
The birth of DogeCoin 🐶
Dogecoin was launched on December 6, 2013, by software engineers Billy Markus and Jackson Palmer. They created Dogecoin as a fun and light-hearted alternative to Bitcoin. Thus, began the era of meme coins! Inspired by the popular “Doge” meme, which features a Shiba Inu dog, Dogecoin quickly gained a large online following and became well-known for its friendly and community-driven nature.
Story of bans begins! China bans Bitcoin 🚫
In 2013, Chinese financial regulators ban the nation’s banks from handling transactions involving the Bitcoin virtual currency. China is known for banning foreign things. So no big surprises there!
The year is 2014…
Ethereum raises money 💰
Ethereum crowdsale, launched in July 2014 was essentially a public fundraising campaign, where people could buy Ether (ETH), the native cryptocurrency of the Ethereum network, in exchange for Bitcoin. The crowdsale was one of the first of its kind and aimed to gather the necessary resources to develop and launch the Ethereum platform.
The buzz around Ethereum was electric. Blockchain enthusiasts, developers, and early adopters were intrigued by the potential of a programmable blockchain. Ethereum’s white paper had already laid out a compelling vision, and the prospect of participating in the next big thing in crypto had people eagerly opening their digital wallets.
The campaign lasted for 42 days, and by the end of it, Ethereum had raised an astonishing $18 million worth of Bitcoin. This wasn’t just a financial victory — it was a validation of their vision and hard work. The successful crowdsale meant they had the resources to build the Ethereum platform and bring their revolutionary ideas to life.
First NFT Created 🐵
The first NFT (non-fungible token) is widely considered to be “Quantum,” created by Kevin McCoy and Anil Dash on May 3, 2014. Quantum is a digital artwork that consists of a pixelated octagon filled with denoting a space of color, with the inside of the octagon pulsing in a hypnotic manner. This was part of a presentation at the “Seven on Seven” conference at the New Museum in New York City, where McCoy and Dash demonstrated how blockchain technology could be used to create unique, verifiable ownership for digital art.
Birth of Tether
Tether (USDT), the first major stablecoin, was launched in 2014. It aimed to provide a stable cryptocurrency backed by traditional fiat currencies, facilitating easier transactions and providing a stable store of value in the volatile crypto market.
The first DEX(Decentralised Exchange) launches
BitShares, the first DEX, aimed to give traders the freedom to swap digital assets without relying on no-good, centralized exchanges. Instead of leaving your precious tokens in the custody of some shady exchange operator, BitShares let you keep ’em safe and sound in your own digital saddlebags. It was like trading at high noon, but with cryptographic keys!
With its blazing-fast blockchain, trades happened quicker than you could say “Hodl my beer.” No more waiting around for slow confirmations or worrying about the exchange getting hacked — it was decentralized trading at its finest!
But BitShares wasn’t content to just be a run-of-the-mill exchange. Oh no, it had bigger dreams than a lone cowboy on the prairie. It introduced innovative features like decentralized assets (BitAssets), which were pegged to real-world assets like the U.S. dollar. It was like having your own digital goldmine, with tokens that mirrored the value of traditional currencies.
BitShares stood tall in the face of adversity, blazing a trail for future DEXs to follow.
The year is 2015…
Ethereum goes live
In 2015, Ethereum launched its Genesis Block, the very first block on its blockchain. It was like the opening night of the greatest show on the decentralized internet. Developers around the world saw the potential and started flocking to Ethereum, eager to build the next big thing in the crypto world.
Bitcoin XT Proposal
Developer Mike Hearn released Bitcoin XT, a fork of Bitcoin Core, to address Bitcoin’s scalability issues. Bitcoin XT proposed increasing the block size limit from 1 MB to 8 MB to accommodate more transactions. Although it did not gain enough support to become the dominant Bitcoin client, it sparked a significant debate about scalability that influenced future discussions and solutions.
The Rise of Smart Contracts and DApps on Ethereum 📄
Smart contracts were the magic beans that promised to grow a beanstalk to a decentralized world. These contracts allowed two or more parties to engage in an agreement without needing a trusted third party. The rules and penalties were hardcoded, and the execution was automatic and immutable. If the conditions were met, the contract executed; if not, it didn’t. No middleman, no disputes, just pure, trustless automation.
Smart contracts on Ethereum are written primarily in Solidity, a statically-typed programming language designed specifically for developing smart contracts. Once written, these contracts are deployed to the Ethereum blockchain, where they become immutable and can be interacted with by users and other contracts. Decentralized applications (dApps) are built on top of these smart contracts, providing a wide range of services such as decentralized finance (DeFi), gaming, supply chain management, and more. dApps leverage the decentralized nature of the blockchain to ensure transparency, security, and trustlessness.
The early DApps were simple yet groundbreaking. They ranged from decentralized exchanges (DEXs) where users could trade tokens without an intermediary, to prediction markets where users could bet on future events.
Creation of Hyperledger Project
The Linux Foundation announced the creation of the Hyperledger Project in December 2015, an open-source collaborative effort to advance cross-industry blockchain technologies.
Blockchain Scaling — Lightning Network
The Lightning Network, a brilliant invention proposed by two brave souls named Joseph Poon and Thaddeus Dryja. They envisioned a network of magical tunnels — think of them as secret passageways — that allow adventurers to conduct their transactions off-chain, away from the crowded marketplace.
Here’s how it works: Let’s say you want to buy a tankard of ale from your favorite tavern. Instead of broadcasting your transaction to the entire Bitcoin network, you and the tavernkeeper open a magical tunnel between your wallets. You pass back and forth tiny lightning bolts — microtransactions — until your tab is settled.
Because these transactions are conducted off-chain, they’re lightning-fast and practically free! No more waiting for confirmations or paying hefty fees to the Bitcoin miners. Once your tab is settled, the Lightning Network updates the main Bitcoin ledger with just one final transaction — a lightning bolt that closes the tunnel and settles your balance on the blockchain for all to see.
The Lightning Network isn’t just about buying tankards of ale. It opens up a whole new world of possibilities — microtransactions for tiny favors, streaming payments for your favorite bards, and even atomic swaps for trading different cryptocurrencies without the need for a middleman.
Like any great solution, the Lightning Network isn’t without its challenges. It’s still in its early stages, with great minds working to iron out the wrinkles and make it as smooth.
The DAO — Decentralized Autonomous Organizations (DAOs)
Ethereum enabled the creation of Decentralized Autonomous Organizations (DAOs). DAOs are organizations that are run by smart contracts instead of traditional management structures. They operate based on the rules encoded in their smart contracts, and decisions are made through member voting using governance tokens. DAOs exemplify the potential of Ethereum to facilitate new forms of governance and collaboration without centralized control.
Now, the DAO wasn’t your average organization. It wasn’t run by CEOs or Vitalik or even by stuffy bureaucrats in suits. The DAO was a rebel with a cause — a digital disruptor determined to shake up the status quo and empower the people.
It all started when a group of crypto enthusiasts dreamed of creating a DAO — a magical entity that would live on the blockchain, governed by smart contracts and fueled by the collective wisdom of its members.
Everything seemed peachy keen in the land of the DAO. Members voted on proposals, pooled their funds, and invested in exciting new projects. It was like a digital utopia where everyone had a voice and the power to shape the future.
As of this writing on June 11,2024, there were 50,901 DAOs as per DeepDAO.
The year is 2016…
The DAO is born
“The DAO” — the ambitious and slightly star-crossed venture that hit the crypto world like a comet! It’s April 30, 2016, and a bunch of blockchain enthusiasts decide to create the ultimate decentralized venture capital fund. They call it The DAO, which stands for Decentralized Autonomous Organization. Sounds fancy, right? Essentially, it was like a giant piggy bank on the Ethereum blockchain where investors could vote on which projects to fund. It was democracy meets crypto meets venture capitalism!
The hype was real. Investors poured in around $150 million worth of Ether (ETH), making it one of the biggest fundraisers ever seen in the crypto space.
Two months later, the disaster strikes. A sneaky hacker found a loophole in The DAO’s smart contract code and made off with about $60 million worth of Ether. It was like finding out the giant piggy bank had a secret trapdoor.
The crypto community was in an uproar. To fix the mess, they had to make a tough call — perform a hard fork on the Ethereum blockchain. This split the network into two: Ethereum (ETH), which rolled back the hack, and Ethereum Classic (ETC), which kept the original history, hack and all.
So, while The DAO’s tale might sound like a cautionary crypto soap opera, it sure did leave a lasting impact on the blockchain world. It taught everyone valuable lessons about security, governance, and the wild west nature of the early days of decentralized finance.
Zcash is launched
A new kid on the crypto block bursts onto the scene. This wasn’t just any cryptocurrency; this was Zcash (ZEC), the digital equivalent of a ninja with a cloak of invisibility. It launched on October 28, 2016, and promised to do something magical: make your transactions disappear — or at least keep them super secret.
Imagine you’re at a party, and everyone’s gossiping about who paid for what. Bitcoin is like the guy who loudly announces, “I just bought a drink!” while Zcash is the smooth operator who slips the bartender a note saying, “Keep this between us.” With its zero-knowledge proofs (fancy term: zk-SNARKs), Zcash allowed users to keep their financial affairs as private as a celebrity’s wedding — no peeking allowed!
The masterminds behind Zcash realized that while people loved the transparency of blockchain, sometimes you just don’t want the world to know you spent your hard-earned crypto on an embarrassing amount of cat-themed merchandise. Enter Zcash, with transactions that could be shielded to hide sender, recipient, and amount. It was like having your cake, eating it, and making everyone else believe you were on a strict diet.
Of course, not everyone was thrilled. Regulators and privacy skeptics raised eyebrows higher than a surprised emoji. But for privacy enthusiasts, Zcash was a dream come true — a digital fortress of solitude in a world of open ledgers. It wasn’t just about hiding your crypto shenanigans; it was about having the option to keep your financial life private, like a digital diary with a really good lock.
So, while Bitcoin was out there being the rock star of cryptocurrencies, Zcash was the mysterious, masked magician, pulling off privacy tricks that left everyone intrigued.
People started to shop with Bitcoin
The growing number of businesses that began accepting Bitcoin and other cryptocurrencies as a form of payment. This wasn’t just limited to online merchants but extended to brick-and-mortar stores, signaling a broader acceptance of digital currencies. Major companies like Microsoft, Overstock, and Expedia were already accepting Bitcoin, and smaller businesses started to follow suit.
The year is 2017…
ICO(Initial Coin Offering) Boom
It’s year 2017, and excitement was in the air as blockchain projects from far and wide clamored to launch their very own tokens and raise funds in a frenzy of digital delight.
From decentralized finance (DeFi) to gaming, healthcare to supply chain management, there was no shortage of ambitious projects vying for attention. Each ICO had its own unique story to tell, its own vision of the future, and its own token to offer to eager investors.
But amidst the excitement and exuberance, there were also tales of caution and skepticism. With great promise came great risk, and not every ICO turned out to be the pot of digital gold at the end of the rainbow. Scams and schemes lurked in the shadows, waiting to prey on unsuspecting adventurers blinded by the allure of quick riches.
Yet, for every cautionary tale, there were also stories of triumph and innovation. Some ICOs went on to become household names, revolutionizing industries and reshaping the way we think about money and technology. They became the heroes of the crypto world, leading the charge toward a decentralized future.
The largest ICO was carried out by Block.one, the company behind the EOS network, which raised an astonishing $4 billion in 2018. The second-largest ICO was conducted by Telegram, raising $1.7 billion. Unlike many other ICOs, Telegram’s offering was primarily gated and limited to private investors with substantial capital. The decentralized storage network Filecoin conducted the third-largest ICO, raising over $257 million in 2017. By the end of 2017, ICOs had raised nearly 40 times more capital than they had in 2016.
What is an ICO?
An Initial Coin Offering (ICO) is a fundraising method used primarily by blockchain and cryptocurrency startups to raise capital for their projects. It is somewhat analogous to an Initial Public Offering (IPO) in the traditional financial world, but with some key differences tailored to the decentralized nature of blockchain technology.
In an ICO, a company or project issues new digital tokens or coins, which are typically built on an existing blockchain platform like Ethereum. Projects usually publish a whitepaper outlining their goals, technical details, the problem they aim to solve, the team behind the project, and how they plan to use the funds raised.
MakerDAO launches
It’s December 2017 and MakerDAO is launched. It is a decentralized autonomous organization (DAO) built on the Ethereum blockchain. MakerDAO’s primary product is the Dai stablecoin, which is pegged to the value of the US dollar. The goal of MakerDAO is to create a decentralized stablecoin that maintains its value over time, providing stability in the volatile world of cryptocurrencies.
The MakerDAO ecosystem operates through a series of smart contracts on the Ethereum blockchain. These contracts govern the creation and management of Dai, as well as the governance of the DAO itself. Users can generate Dai by locking up collateral assets (such as Ethereum) in a smart contract known as a Collateralized Debt Position (CDP). The locked-up assets act as collateral to back the value of the newly created Dai.
One of the key features of MakerDAO is its decentralized governance model. MKR token holders have the power to vote on proposals and changes to the protocol, ensuring that the system remains secure, stable, and transparent.
Overall, MakerDAO aims to provide a stable and decentralized alternative to traditional fiat currencies, enabling users to transact and store value without the volatility typically associated with cryptocurrencies.
Bitcoin’s Price Surge
Bitcoin started the year at around $1,000 and ended the year close to $20,000. This unprecedented increase in value brought widespread attention to cryptocurrencies and sparked a global interest in blockchain technology.
Mega ICO of EOS
The EOS team, with their vision of creating a supercharged blockchain capable of handling industrial-scale decentralized applications (DApps), announced an Initial Coin Offering (ICO). But this wasn’t your typical, “we’ll-raise-some-cash-for-a-few-weeks” ICO. Oh no, they decided to stretch this party out for a whole year!
Over the course of the year, EOS raised a jaw-dropping $4 billion. Investors were throwing their Ether into the pot like confetti at a parade. Why? Because EOS promised to solve all the blockchain problems that were making developers pull their hair out.
What Made EOS Special? EOS was designed to be the superhero of blockchains. It boasted the ability to process thousands of transactions per second, zero transaction fees, and a user-friendly environment for developers. In a world where blockchains were struggling with scalability (Ethereum, we’re looking at you), EOS was the new kid on the block promising to fix everything.
The EOS ICO wasn’t just a fundraiser — it was a billion-dollar bonanza that took the crypto world by storm. It demonstrated the power of blockchain technology to inspire both wild enthusiasm and critical scrutiny, paving the way for future innovations and, let’s be honest, a lot more hype.
Bitcoin Cash Hard Fork
The crypto world was buzzing with anticipation as Bitcoin faced one of its most significant challenges yet — a hard fork. But this wasn’t just any old fork in the road; it was the birth of Bitcoin Cash (BCH), a new cryptocurrency with big dreams and an even bigger block size.
Now, why all the fuss? Well, imagine Bitcoin as a bustling highway with cars zooming along, but traffic jams were becoming more frequent as the blocks got clogged with transactions. So, along came Bitcoin Cash, offering a wider lane — a whopping 8MB block size compared to Bitcoin’s 1MB. It was like upgrading from a narrow country road to a multi-lane expressway, promising faster transactions and lower fees.
But, as with any big change, not everyone was on board. The Bitcoin community was divided, with passionate debates raging like a crypto civil war. Some saw Bitcoin Cash as a necessary evolution, while others feared it would dilute the original Bitcoin’s brand and cause confusion among users.
The Bitcoin Cash fork sparked a wave of sibling rivalry, with both Bitcoin (BTC) and Bitcoin Cash vying for dominance in the crypto kingdom. It was like a family feud played out on the blockchain, with each side touting its own merits and rallying supporters to its cause.
Launch of CryptoKitties 🐱
CryptoKitties, a game on the Ethereum blockchain that lets you collect, breed, and trade virtual cats. Yes, you heard that right — cats on the blockchain!
Now, these aren’t your ordinary alley cats. Each CryptoKitty is a unique digital asset, represented by a non-fungible token (NFT) on the Ethereum network. They come in all shapes, sizes, and purr-sonalities, with traits like fur color, pattern, and even special abilities.
The concept was simple yet strangely addictive. Players could buy, sell, or breed their CryptoKitties to create new, genetically unique offspring. Some kitties became rare and sought after, fetching jaw-dropping prices on the marketplace. It was like a digital pet show, with virtual cat lovers clamoring to collect the most coveted breeds.
But here’s where things get interesting — and a little hairy. CryptoKitties became so popular that they caused a purr-roblem on the Ethereum network. With everyone breeding and trading these virtual furballs, the network became clogged, causing congestion and slowing down transactions. It was like herding cats in a crowded blockchain!
Despite the network congestion, CryptoKitties captured the hearts and wallets of crypto enthusiasts worldwide. People spent thousands of dollars on these digital pets, some even making a tidy profit by breeding and selling rare kitties. It was a digital gold rush, with virtual cats as the new currency.
CryptoKitties showed the world the potential of NFTs and blockchain-based games, paving the way for a whole new genre of decentralized applications. It wasn’t just about collecting cute kitties; it was about exploring the possibilities of digital ownership and decentralized assets.
Institutional Interest and Futures Trading
It’s 2017, and Bitcoin is hotter than a summer heatwave in the Sahara. But while us regular folks were busy HODLing and dreaming of Lambo rides to the moon, something else was brewing in the background — cue the entrance of the big players, the suits, the institutions!
You see, up until then, Wall Street had been eyeing Bitcoin from afar, like a cautious lion eyeing a juicy steak. But in December 2017, they decided to take a bite! The Chicago Board Options Exchange (CBOE) and the Chicago Mercantile Exchange (CME) introduced something called Bitcoin futures trading.
Now, what on earth is futures trading, you ask? Well, it’s like making a bet on the future price of Bitcoin without actually owning any Bitcoin. It’s a bit like predicting whether your favorite sports team will win next season’s championship, except instead of touchdowns, we’re talking about price fluctuations in the world of crypto.
And why did they do it? Well, Opportunity to make bucks! Institutional investors saw the potential for big profits in the volatile world of crypto, and futures trading provided a regulated way for them to dip their toes in the digital waters without getting burned.
As soon as Bitcoin futures hit the market, the price of Bitcoin went on a rollercoaster ride, swinging up and down. Some cheered it as a sign of mainstream acceptance, while others warned of market manipulation and volatility. When Wall Street meets Bitcoin, you know it’s going to be one heck of a ride!
Ethereum’s Byzantium Hard Fork
Ethereum community embarked on a grand adventure — a hard fork named Byzantium. But this isn’t your ordinary fork. This is Ethereum’s Metropolis upgrade, and it’s here to sprinkle some magic dust on the blockchain.
Now, what exactly is a hard fork, you ask? Well, it’s like a software update for the blockchain, but instead of downloading new emojis, you’re adding fancy new features and fixing bugs. Byzantium was part of Ethereum’s grand plan to make the platform faster, safer, and more efficient.
Among Byzantium’s many enchanting additions were zk-SNARKs — fancy cryptographic spells that let users perform transactions with a touch of privacy. It’s like wearing an invisibility cloak while you zip through the blockchain, leaving no trace behind. Byzantium made transactions cheaper and faster.
Launch of Cardano (ADA)
Founded by Charles Hoskinson, one of Ethereum’s legendary co-founders, Cardano promised to be more than just another blockchain — it aimed to be a beacon of scalability, interoperability, and sustainability in a sea of digital currencies.
With a flourish of code and a sprinkle of magic, Cardano emerged onto the scene, ready to take on the challenges of the crypto world. Its mission? To provide a secure and scalable platform for building decentralized applications, all while ensuring that every transaction was as smooth as a finely brewed potion.
But Cardano wasn’t content with just being another player in the crypto game. Oh no, this blockchain hero had big dreams! With its innovative Ouroboros consensus mechanism and commitment to peer-reviewed research, Cardano set its sights on becoming the go-to platform for developers looking to build the next generation of DApps.
Launch of Polygon
Polygon, formerly known as Matic Network, was launched in October 2017. It is a layer 2 scaling solution for Ethereum, designed to improve scalability, usability, and interoperability for decentralized applications (dApps). Polygon aims to address the scalability challenges faced by Ethereum by providing a framework for building and connecting multiple chains, or “sidechains,” to the Ethereum mainnet.
The Polygon network offers several key features, including fast and low-cost transactions, support for Ethereum-compatible smart contracts, and interoperability with other blockchain networks. By leveraging sidechains and other scaling techniques, Polygon aims to increase the throughput of Ethereum, reduce transaction fees, and improve the overall user experience for dApps and users.
In addition to its scaling capabilities, Polygon also provides tools and infrastructure for developers to easily deploy and manage decentralized applications. This includes developer-friendly APIs, software development kits (SDKs), and other developer tools designed to streamline the dApp development process.
Launch of Binance
Binance, one of the world’s largest cryptocurrency exchanges, was launched on July 14, 2017. Founded by Changpeng Zhao (CZ), Binance quickly rose to prominence within the crypto community for its user-friendly interface, vast selection of trading pairs, and innovative features. Since its launch, Binance has become a dominant force in the cryptocurrency market, offering a wide range of services including spot trading, futures trading, staking, and more.
The year is 2018…
EOS Mainnet launches
In June 2018, after a year of anticipation, the EOS mainnet went live. It was like the grand opening of a futuristic theme park. Fireworks, confetti, and virtual champagne flowed as developers were invited to start building their dream DApps on this new, high-powered blockchain.
China slaps another ban (Ohh! So democratic of them!)
With a wave of their imperial scepter, the Chinese rulers issued a decree banning ICOs outright, sending adventurers and traders into a frenzy of uncertainty. With a second decree, they turned their gaze upon the cryptocurrency exchanges — the bustling marketplaces where adventurers bought, sold, and traded their digital treasures. Some were ordered to shutter their doors, while others faced strict regulations and scrutiny from the watchful eyes of the regulators.
The impact was swift and severe. The price of Bitcoin, once soaring high on the winds of optimism, plummeted.
The Rise of StableCoins
In 2018, the cryptocurrency market experienced heightened volatility, with the prices of major cryptocurrencies fluctuating wildly. Amidst this turbulence, investors and traders sought stability and a reliable store of value within the crypto ecosystem. This growing need for stability led to a surge in demand for stablecoins, which are cryptocurrencies pegged to the value of fiat currencies, typically the US dollar.
Several stablecoins gained traction in 2018 as investors turned to them as a safe haven during times of market uncertainty. Tether (USDT), one of the earliest and most widely known stablecoins, continued to maintain its position as the dominant player in the stablecoin market. Despite facing criticism and scrutiny regarding its reserve backing and transparency, Tether remained popular among traders and served as a key liquidity provider in the cryptocurrency market.
In addition to Tether, other stablecoins emerged as viable alternatives, offering increased transparency and regulatory compliance. TrueUSD (TUSD), launched in March 2018, gained popularity for its fully collateralized model, where each token is backed by an equivalent amount of US dollars held in escrow.
Another notable stablecoin that gained traction in 2018 was USD Coin (USDC), launched in September of that year. Developed as a collaboration between Circle and Coinbase, USDC offered users a regulated and transparent stablecoin option.
The Rise of DEX
In 2018, a new breed of exchange emerged from the depths of the blockchain, promising freedom, autonomy, and a dash of magic.
Enter Uniswap, Kyber Network, and Bancor — the valiant heroes of decentralized trading, ready to take on the centralized behemoths with their trusty automated market-making algorithms and liquidity pools. These DEXs were like taverns in the wild west, open to all brave souls willing to venture forth and swap their tokens without the need for sign-ups, KYC checks, or withdrawal limits.
But how did they work, you ask? Ah, that’s where the magic comes in! Instead of relying on order books and centralized servers, DEXs use clever algorithms and enchanted liquidity pools to match buyers with sellers in real-time.
With DEXs, you keep your tokens safe and sound in your own enchanted wallet, protected by the power of the blockchain itself. No more worries about exchange hacks, exit scams, or draconian regulations — just pure, unadulterated freedom.
Rise of Liquidity Provision and Yield Farming
In 2018, a new concept emerged from the world of decentralized finance — a concept known as liquidity provision.
Liquidity provision was like planting seeds in a bustling marketplace, where traders would come to buy, sell, and swap their digital treasures. By contributing their tokens to decentralized exchanges and liquidity pools, users became like farmers, tending to their crops of liquidity and reaping the rewards in the form of trading fees and rewards.
Yield farming soon emerged as the next frontier in the world of DeFi. Yield farming enhanced their growth and multiplied your rewards. Through clever strategies and innovative protocols, users could maximize their returns by participating in liquidity mining programs and staking their tokens in various DeFi protocols.
With promises of high yields and lucrative rewards, users flocked to liquidity pools and yield farming protocols, contributing their assets and fueling the growth of the DeFi ecosystem.
Launch of Smart Contract-Based Derivatives
A new frontier emerged within the decentralized finance (DeFi) realm —decentralized derivatives.
Now, what are derivatives, you ask? Well, they’re like enchanted scrolls that grant their holders the power to bet on the future price movements of assets without actually owning them. And in the world of DeFi, these derivatives took on a whole new form, thanks to the magic of smart contracts.
Enter Synthetix and Opyn — the trailblazers of decentralized derivatives, the wizards of smart contracts, and the architects of a new era in finance. These projects paved the way for users to create and trade synthetic assets, options, and other financial instruments directly on the blockchain.
With Synthetix, users could mint synthetic assets — tokens that mirrored the value of real-world assets like stocks, commodities, and fiat currencies — using a system of collateral and smart contracts. These synthetic assets could then be traded on decentralized exchanges, providing users with exposure to traditional financial markets without leaving the realm of DeFi.
With Opyn, users could create and trade options contracts — magical scrolls that granted their holders the power to buy or sell assets at a predetermined price within a set timeframe. Through the power of smart contracts, Opyn enabled users to hedge their risks, speculate on price movements, and unlock new opportunities in the world of DeFi.
Together, Synthetix and Opyn opened the gates to a new realm of possibility within DeFi, where users could harness the power of smart contracts to create, trade, and manage complex financial instruments with ease.
The year is 2019…
Total value locked (TVL) in DeFi protocols surpasses $1 billion
In 2019, DeFi experienced a meteoric rise, with the total value locked (TVL) in DeFi protocols surpassing the monumental milestone of $1 billion. This surge in adoption was fueled by a multitude of innovative projects and platforms that offered a plethora of decentralized financial services.
One of the key players in this DeFi frenzy was MakerDAO, the decentralized autonomous organization behind the creation of the Dai stablecoin. By locking up collateral assets such as Ethereum (ETH) in smart contracts, users could mint Dai — a stablecoin pegged to the value of the US dollar — without the need for traditional intermediaries. This unlocked a world of possibilities, allowing users to access decentralized lending and borrowing services with ease.
Compound Finance was another trailblazer in the DeFi space, offering users the ability to earn interest on their crypto assets or borrow tokens directly from smart contracts. By leveraging the power of algorithmic interest rates and decentralized governance, Compound created a decentralized money market protocol that attracted significant attention from investors and traders alike.
Meanwhile, Synthetix pioneered the concept of synthetic assets, enabling users to mint and trade synthetic versions of real-world assets such as stocks, commodities, and fiat currencies. Through a system of collateralization and decentralized oracles, Synthetix provided users with exposure to a wide range of financial instruments directly on the blockchain.
As the DeFi ecosystem flourished, new projects and protocols emerged, each offering unique solutions to the age-old problems of traditional finance. From decentralized exchanges like Uniswap to prediction markets like Augur, the DeFi landscape was a vibrant tapestry of innovation, experimentation, and decentralized ideals.
Facebook Announces Libra (Diem)
In June 2019, Facebook unveiled its plans to launch a new global cryptocurrency called Libra, with the goal of providing a digital currency that could be used for peer-to-peer transactions and online purchases across its platforms, including Facebook, WhatsApp, and Instagram. Libra was designed to be a stablecoin, backed by a reserve of assets such as government bonds and fiat currencies to mitigate price volatility.
The announcement of Libra generated significant excitement and scrutiny from regulators, policymakers, and the general public. On one hand, proponents saw Libra as a potential game-changer for financial inclusion and global payments, offering a convenient and low-cost alternative to traditional banking services, especially in underserved regions.
However, Libra also faced intense regulatory scrutiny and pushback from governments and regulatory bodies around the world. Concerns were raised regarding potential risks related to consumer protection, financial stability, privacy, and anti-money laundering compliance. Critics argued that Facebook’s track record with data privacy and user trust raised questions about its suitability to operate a global financial system.
Launch of Bakkt
Bakkt, a digital asset platform owned by Intercontinental Exchange (ICE), and its introduction of physically settled Bitcoin futures contracts was launched in September 2019.
Bakkt’s entry into the cryptocurrency space was highly anticipated, as it aimed to provide institutional-grade infrastructure for trading and custody of digital assets. Unlike existing Bitcoin futures contracts offered by CME Group and Cboe Global Markets, Bakkt’s futures contracts were settled in actual Bitcoin rather than cash.
The introduction of physically settled Bitcoin futures contracts was significant for institutional investors who preferred to receive actual Bitcoin upon contract expiration, rather than cash. This feature helped bridge the gap between traditional finance and the crypto market, attracting interest from institutional players seeking exposure to digital assets.
Further, Physically settled futures contracts have the potential to impact Bitcoin’s price discovery mechanism by directly affecting supply and demand dynamics in the spot market. As institutions participated in Bakkt’s futures contracts, their trading activities could influence Bitcoin’s price movements and market liquidity.
Bakkt’s launch required regulatory approval from the Commodity Futures Trading Commission (CFTC) due to its physically settled nature. The approval process underscored the growing legitimacy of the cryptocurrency market and provided a regulatory framework for institutional participation in Bitcoin futures trading.
In addition to futures contracts, Bakkt offered secure custody solutions for digital assets, addressing concerns around storage and security for institutional investors. Bakkt’s custody services provided a regulated and compliant way for institutions to hold and manage their Bitcoin holdings.
Growth of Non-Fungible Tokens (NFTs)
NFTs were like enchanted artifacts that could represent anything from digital collectibles to virtual real estate to pieces of art. And oh, what marvels they brought forth! CryptoKitties, the feline familiars that captured the hearts of adventurers far and wide, roamed the blockchain, each one a precious gem in the treasure trove of the Ethereum realm.
But the madness didn’t stop there. Decentraland, the virtual realm of boundless possibilities, beckoned adventurers to explore its vast landscapes, own parcels of land, and build kingdoms of their own. And with each parcel came an NFT deed — a token of ownership that granted its holder dominion over their digital domain.
And then there were the art projects — oh, the art projects! From digital masterpieces to pixelated wonders, artists of all kinds flocked to the blockchain, eager to showcase their creations to the world. And with the power of NFTs, each piece became a unique, verifiable treasure, forever immortalized on the immutable ledger of the blockchain. But perhaps the most enchanting aspect of NFTs was their ability to create new forms of value and expression.
Blockchain finds its place in Enterprises
Enterprises far and wide embarked on grand quests to explore the mysteries of blockchain technology, seeking solutions to age-old challenges like supply chain, identity verification, and data security. From the halls of IBM to the chambers of Microsoft, mighty companies rallied their armies of engineers and wizards to unlock the secrets of the blockchain.
IBM, the titan of technology, forging alliances with other noble houses to create blockchain consortia aimed at transforming supply chains into transparent, efficient marvels of blockchain enchantment. Meanwhile, Microsoft, the mighty sorcerer of software, conjured up Azure Blockchain, a platform where enterprises could weave their own blockchain spells with ease. Walmart, the noble merchant king, who embarked on a quest to trace the provenance of goods using blockchain magic, ensuring that every loaf of bread and every goblet of ale could be traced back to its source.
Launch of Polkadot
Polkadot — a wondrous multi-chain blockchain platform that emerged from the depths of the crypto realm. In a world where blockchains were like isolated islands, each with its own unique features and limitations, along came Polkadot — a mighty bridge builder, connecting these islands and forging a path to interoperability!
What exactly is Polkadot, you ask? Well, imagine a grand castle in the sky, where each tower represents a different blockchain network — Bitcoin, Ethereum, and countless others. Polkadot is like the magical drawbridge that connects these towers, allowing them to communicate, share data, and collaborate like never before. Through its innovative architecture and parachain technology, Polkadot enables seamless interoperability between different blockchains, allowing assets and information to flow freely between them.
Polkadot is governed by its own community of knights, wizards, and crypto enthusiasts, who come together to vote on upgrades, proposals, and changes to the network.
The year is 2020…
Institutional interest in cryptocurrencies grows
Institutional interest in cryptocurrencies reached new heights in 2020, marking a significant shift in the perception of digital assets among traditional financial institutions. Several factors contributed to this surge in institutional adoption, including macroeconomic uncertainty, the growing legitimacy of cryptocurrencies as an asset class, and the emergence of new investment vehicles. Central banks around the world implemented stimulus measures, leading to concerns about inflation and currency devaluation. In this environment, cryptocurrencies like Bitcoin emerged as a hedge against traditional financial instruments, with investors turning to digital assets to diversify their portfolios and protect against economic uncertainty.
Regulatory clarity in key markets, improvements in infrastructure, and the development of institutional-grade custody solutions provided institutional investors with greater confidence to enter the crypto space. Some banks began offering cryptocurrency custody services to their clients, allowing institutional investors to securely store and manage digital assets. Asset managers and hedge funds launched cryptocurrency-focused investment funds, providing institutional investors with exposure to the crypto market through regulated investment vehicles.
In a historic move, several publicly traded companies announced significant investments in Bitcoin as part of their corporate treasury reserves. MicroStrategy, led by CEO Michael Saylor, made headlines with its decision to allocate a portion of its treasury assets to Bitcoin, citing the cryptocurrency’s potential to serve as a store of value and hedge against inflation. Other companies, including Square, followed suit, further validating Bitcoin as a legitimate asset class.
The U.S. Office of the Comptroller of the Currency (OCC) issued guidance allowing national banks and federal savings associations to provide cryptocurrency custody services to their customers, providing a regulatory framework for banks to engage with digital assets.
NFT Booms more
In 2020, NFTs experienced a surge in popularity, driven by a combination of factors including increased interest from collectors, artists, and investors, as well as advancements in blockchain technology and the rise of decentralized marketplaces.
Platforms like Rarible, OpenSea, and NBA Top Shot emerged as leading marketplaces for buying, selling, and trading NFTs, offering users a wide range of digital assets to choose from. From digital art and collectibles to virtual real estate and in-game items, NFTs became a new frontier for creators and enthusiasts to explore and engage with.
One of the key drivers behind the NFT boom was the ability to tokenize digital assets and provide proof of ownership and scarcity on the blockchain. The NFT market saw record-breaking sales throughout 2020, with digital artworks fetching millions of dollars and virtual collectibles selling for significant sums. High-profile collaborations between artists, celebrities, and brands further fueled interest in NFTs, attracting mainstream attention and driving adoption across diverse industries.
The total sales volume of non-fungible tokens (NFTs) in 2020 reached approximately $250 million, marking a significant increase compared to previous years.
Filecoin launched
Filecoin, a decentralized storage network designed to facilitate the storage and retrieval of data in a secure and decentralized manner, was launched on October 15, 2020. Developed by Protocol Labs, Filecoin aims to create a decentralized marketplace for storage services, enabling users to buy and sell storage space using the network’s native cryptocurrency, FIL. The launch of Filecoin represented a significant milestone in the development of decentralized storage solutions, providing a decentralized alternative to traditional cloud storage providers.
DEX outraces CEX for the first time
The DeFi craze that swept through the cryptocurrency markets in 2020 had a profound impact on decentralized exchanges (DEXs) like Uniswap, propelling them to new heights of trading volume and adoption. Uniswap, one of the leading decentralized exchanges built on the Ethereum blockchain, experienced a surge in monthly trading volume, reaching a staggering $15.3 billion in September 2020. This surge in volume not only shattered previous records but also surpassed the trading volume of traditional centralized exchanges like Coinbase for the first time.
The year is 2021…
DeFi TVL surpasses $100 Billion from $1 Billion in 2019
In 2021, the total value locked (TVL) in DeFi protocols reached unprecedented levels, surpassing $100 billion for the first time. This metric measures the total amount of assets, typically cryptocurrencies, locked in smart contracts within DeFi platforms. The exponential growth in TVL demonstrated the increasing demand for decentralized financial services and the expanding ecosystem of DeFi protocols.
Automated market makers (AMMs) played a crucial role in facilitating decentralized trading and liquidity provision in DeFi. Protocols like Uniswap, SushiSwap, and PancakeSwap utilized AMM algorithms to enable users to swap tokens directly from their wallets and earn fees by providing liquidity to liquidity pools.
Axie Infinity hits 2.7 million daily active users (DAUs)
Axie Infinity is an iconic name in Web3 gaming. It was the first to introduce the Play-to-Earn (P2E) model, marking a new chapter on the gaming industry. Axie Infinity revolutionized gaming by enabling players to generate tangible value and earn financial incentives. This innovation represents a significant milestone in the evolution of Web3 technology, expanding its horizons and showcasing its versatility in various applications.
At the peak of its popularity in 2021, Axie Infinity had 2.7 million daily active users (DAUs). The game’s developer, Sky Mavis, was valued at around $3 billion.
A NFT sells for a staggering $69.3 million
One of the most significant events in the NFT space was the auction of “Everydays: The First 5000 Days” by digital artist Beeple (Mike Winkelmann) at Christie’s auction house. The artwork, a collage of Beeple’s daily digital creations spanning over 13 years, sold for a staggering $69.3 million, making it one of the most expensive digital artworks ever sold and propelling Beeple to international fame.
Following this, Celebrities, musicians, athletes, and brands flocked to the NFT space, launching their own collections and collaborations with digital artists and platforms. Notable examples include musician Grimes selling NFT artworks for millions of dollars, NBA Top Shot partnering with the National Basketball Association (NBA) to tokenize iconic basketball moments, and luxury brands like Gucci and Louis Vuitton exploring NFTs as a new avenue for digital engagement and revenue generation.
Bitcoin’s market cap rise to $1 trillion
Breaking the $1 trillion market cap barrier was a significant milestone for Bitcoin, demonstrating its increasing relevance and prominence in the global financial landscape. It represented a validation of Bitcoin’s status as a leading digital asset and a viable alternative to traditional stores of value such as gold and fiat currencies.
The Big Guys start buying BTC
Tesla, led by CEO Elon Musk, announced that it had purchased $1.5 billion worth of Bitcoin as part of its investment strategy. The electric vehicle maker also revealed plans to accept Bitcoin as a form of payment for its products, signaling a major endorsement of the cryptocurrency by one of the world’s most prominent companies.
MicroStrategy, a business intelligence firm led by CEO Michael Saylor, continued to add to its Bitcoin treasury reserves, eventually accumulating over 100,000 BTC, worth billions of dollars at the time of purchase.
Square, the financial services company founded by Jack Dorsey, made several investments in Bitcoin in 2021. In addition to purchasing $50 million worth of Bitcoin for its corporate treasury in October 2020, Square announced another $170 million investment in Bitcoin in February 2021. The company also enabled Bitcoin purchases through its Cash App, allowing users to buy, sell, and hold Bitcoin directly within the app.
Fidelity Launches Spot Bitcoin ETF in Canada
Fidelity Investments Canada ULC, a prominent investment management firm in Canada, unveiled the Fidelity Advantage Bitcoin ETF™ and Fidelity Advantage Bitcoin ETF Fund™. These products cater to investors seeking exposure to bitcoin, the largest cryptocurrency globally. The offerings utilize Fidelity Clearing Canada ULC (Fidelity Clearing), the first Investment Industry Regulatory Organization of Canada (IIROC) entity to provide a secure digital asset trading and custody solution. This service targets institutional investors, including investment funds.
Bitcoin becomes a legal tender in El Salvador
El Salvador made history on September 7, 2021, by becoming the first country in the world to adopt Bitcoin as legal tender. The country’s Legislative Assembly passed the Bitcoin Law proposed by President Nayib Bukele, marking a groundbreaking moment for the cryptocurrency industry and global finance.
This means that businesses and individuals in the country are now required to accept Bitcoin as a form of payment for goods and services, just like they would accept the US dollar. The government viewed Bitcoin as a means to empower citizens with access to digital financial services and to attract investment and talent to the country’s burgeoning cryptocurrency sector.
The year is 2022…
The Collapse of Terra (LUNA) and TerraUSD (UST)
TerraUSD (UST) was an algorithmic stablecoin intended to maintain a 1:1 peg to the U.S. dollar through a complex mechanism involving its sister token, LUNA. When UST was traded, it could be swapped for an equivalent value of LUNA, which theoretically ensured stability.
In May 2022, UST lost its dollar peg, causing panic among investors. The mechanism meant to stabilize UST failed, leading to a massive sell-off of LUNA. Within days, LUNA’s value plummeted from over $80 to fractions of a cent, wiping out billions of dollars in value. The crash impacted many investors and triggered liquidations across the broader crypto market.
The collapse led to calls for greater regulatory oversight of stablecoins. Many projects and investors who had exposure to UST and LUNA faced severe financial losses, and the event underscored the risks associated with algorithmic stablecoins and the interconnected nature of the crypto ecosystem.
Sam Bankman F̶r̶i̶e̶d̶ Fraud and collapse of FTX
FTX, once a prominent cryptocurrency exchange, faced bankruptcy in November 2022 following accusations of misappropriating customer funds by its owners. Sam Bankman-Fried, the CEO, received a 25-year prison sentence and was instructed to reimburse $11 billion.
Ethereum switches to Proof of Stake
Ethereum successfully transitioned from Proof of Work (PoW) to Proof of Stake (PoS) in an event known as “The Merge.” This upgrade significantly reduced Ethereum’s energy consumption by approximately 99.95% and marked a major step towards Ethereum 2.0, enhancing scalability and security.
Regulatory Scrutiny Increases Worldwide
Throughout 2022, the regulatory landscape for cryptocurrencies and digital assets evolved significantly as governments and regulatory bodies around the world intensified their scrutiny and enforcement actions.
In USA, the Securities and Exchange Commission (SEC) ramped up its enforcement actions against cryptocurrency projects and initial coin offerings (ICOs) that it deemed were violating securities laws. Several high-profile cases were pursued, targeting companies for unregistered securities offerings.
The Commodity Futures Trading Commission (CFTC) sought to expand its jurisdiction over digital asset markets, particularly those involving derivatives and futures contracts.
Financial Crimes Enforcement Network (FinCEN) issued updated guidance on AML compliance for cryptocurrency businesses, emphasizing the importance of customer due diligence and reporting suspicious activities. This included stricter requirements for crypto exchanges and wallet providers.
The European Union moved forward with the Markets in Crypto-Assets (MiCA) regulation, which aims to provide a comprehensive legal framework for digital assets across member states. MiCA covers various aspects, including issuance, trading, and custody of crypto assets, with an emphasis on consumer protection and market integrity.
South Korea implemented stricter regulations for cryptocurrency exchanges, requiring them to register with the Financial Services Commission (FSC) and adhere to robust AML and Know Your Customer (KYC) standards. Non-compliant exchanges faced potential shutdowns and penalties.
In UK, the Financial Conduct Authority (FCA) increased its oversight of cryptocurrency businesses, ensuring compliance with AML regulations.
Bored Ape Yacht Club raises $450 million
Yuga Labs, the creators of BAYC, raised $450 million to develop a decentralized metaverse called “Otherside.” This ambitious project aimed to create a virtual world where users could interact, play, and own digital real estate. The fundraising underscored the significant investor interest in metaverse projects and the potential of NFTs to be more than just collectibles, becoming integral parts of virtual worlds.
Central African Republic (CAR) adopts Bitcoin as Legal Tender
Central African Republic (CAR) decides to follow El Salvador’s footsteps, embracing the rollercoaster ride of Bitcoin by making it legal tender.
The president Faustin-Archange Touadéra, who probably watched El Salvador’s President Bukele having way too much fun with Bitcoin. “If they can do it, why can’t we?
The CAR isn’t exactly a tech hub; imagine trying to explain blockchain to a place where the internet still waves in and out like a reluctant guest at a party.
Residents of Bangui, the capital, woke up one day to find Bitcoin wasn’t just a tech nerd’s dream anymore — it was their new reality. Merchants, who once wrangled over Francs, were now figuring out how to accept a currency that’s as virtual as it gets.
The locals’ faces when they first encountered Bitcoin ATMs were priceless — part bewilderment, part excitement, and a whole lot of confusion. It’s like introducing an alien concept, yet they were game to learn, adapt, and hopefully, profit.
ConstitutionDAO — Why not buy a rare copy of the U.S. Constitution?
Imagine a virtual room filled with thousands of people, all united by one quirky idea: pooling their cryptocurrency to buy one of the rarest historical documents in existence. ConstitutionDAO wasn’t just a group — it was a decentralized autonomous organization, meaning no one was really in charge, but everyone had a say. It was like a digital democracy on steroids, or perhaps more accurately, on blockchain.
The news spread like wildfire: an original copy of the U.S. Constitution was going up for auction at Sotheby’s, and ConstitutionDAO was determined to snag it. Crypto enthusiasts from all corners of the globe chipped in their ETH (that’s Ethereum for the uninitiated) to make it happen. The vibe was electric, like a digital Woodstock but for history buffs and crypto geeks.
Their mission? Simple. Pool together enough funds to outbid the richest of the rich. The DAO quickly amassed over $40 million in ETH.
The day of the auction was nothing short of dramatic. Picture it: a sleek New York auction house filled with old-money bidders, and somewhere in the ether, thousands of DAO members refreshing their screens, fingers crossed. The tension was high, the stakes were higher, and the Ethereum wallets were ready.
But, alas, it was not meant to be. ConstitutionDAO was outbid by a mysterious figure who turned out to be billionaire Ken Griffin. The DAO members watched in suspense as their bid was surpassed, leaving them with a bittersweet taste of defeat and triumph.
Sure, they didn’t walk away with the Constitution, but they did make history. ConstitutionDAO showed the world the power of decentralized communities and what they could achieve. It was a testament to the new age of crowdfunding — no more bake sales and car washes, just a global community united by a shared love of history and a lot of crypto.
In the end, ConstitutionDAO returned the funds to contributors, but the spirit of their mission lived on.
Rise of Metaverse
After rebranding to Meta in late 2021 from Facebook, the company doubled down on its commitment to the metaverse. Meta invested heavily in developing virtual and augmented reality technologies, aiming to build an interconnected virtual world where users can socialize, work, and play. Meta expanded its social VR platform, Horizon Worlds, which allows users to create and explore virtual worlds.
Microsoft made significant strides in the metaverse space by acquiring Activision Blizzard, a major video game company, to bolster its gaming and metaverse capabilities.
Decentraland, a decentralized virtual world built on the Ethereum blockchain, continued to grow its user base and hosted numerous virtual events, including music festivals, art exhibitions, and brand activations. The platform saw increased participation from major brands and celebrities, enhancing its visibility and user engagement.
The Sandbox, another popular decentralized metaverse platform, secured partnerships with various brands, celebrities, and gaming companies. Notable collaborations included partnerships with Snoop Dogg, Adidas, and Atari. Virtual land sales in The Sandbox saw high demand, with users and companies purchasing plots to build and monetize their virtual experiences.
The sale of virtual real estate became a significant trend in 2022, with digital land plots in Decentraland, The Sandbox, and other metaverse platforms fetching substantial prices. For instance, virtual land adjacent to high-traffic areas or celebrity-owned properties commanded premium prices.
The year is 2023…
Polygon zkEVM Mainnet Launch
Polygon launched its zkEVM (Zero-Knowledge Ethereum Virtual Machine) mainnet, significantly improving transaction speeds and reducing costs, while maintaining Ethereum’s security and decentralization standards.
The introduction of zkEVM has profound implications for the Ethereum ecosystem. It addresses two of the most pressing issues faced by Ethereum: scalability and transaction fees. By alleviating these pain points, zkEVM enhances the usability and attractiveness of the Ethereum platform for developers and users alike.
For developers, zkEVM offers a scalable environment to deploy dApps without worrying about prohibitive gas fees or network congestion. This is particularly significant for projects involving decentralized finance (DeFi), non-fungible tokens (NFTs), and gaming, which often require high transaction volumes.
For users, the reduced costs and improved transaction speeds mean a more seamless and cost-effective interaction with Ethereum-based services. This democratizes access to blockchain technology, making it more inclusive for individuals and businesses.
Launch of Cardano’s Hydra
In a significant development for the Cardano blockchain, the Hydra layer 2 scaling solution was launched, marking a pivotal step in the network’s evolution. Hydra is designed to dramatically increase Cardano’s transaction throughput while simultaneously lowering costs, addressing two of the most critical challenges in blockchain technology: scalability and efficiency.
Hydra leverages a unique approach to scaling by creating multiple “heads,” each capable of processing transactions independently. This means that instead of the entire network processing every transaction, transactions can be distributed across these heads, enabling parallel processing. As a result, the network can handle a much higher volume of transactions per second (TPS), potentially reaching up to one million TPS under optimal conditions.
Moreover, Hydra’s implementation ensures that transaction fees are minimized. By distributing the workload, the network reduces congestion and thus lowers the cost of transactions, making it more economical for users to interact with the blockchain. This is particularly advantageous for decentralized applications (dApps) and users who require frequent transactions, enhancing the overall user experience and encouraging broader adoption.
The launch of Hydra signifies Cardano’s commitment to maintaining a competitive edge in the rapidly evolving blockchain landscape. With Hydra, Cardano not only improves its scalability but also strengthens its position as a robust and efficient platform for a wide range of applications, from decentralized finance (DeFi) to supply chain management and beyond.
Half of Turkey’s population owns Crypto
As of May 2023, over half of Turkish adults are crypto owners. More than 52% of Turkish adults aged 18–60 owned cryptocurrencies.
The year is 2024…
Bitcoin reaches its All Time High
On March 14, 2024, bitcoin reached an all-time intraday high crossing $73,000.
Approval of Spot Bitcoin Exchange-Traded Products
On Jan 10 2024, the SEC approved the listing and trading of a number of spot bitcoin exchange-traded product (ETP) shares. Sponsors of Bitcoin ETPs must ensure they offer complete, fair, and accurate information about their products. Investors in any listed and traded Bitcoin ETP will benefit from the transparency provided through public registration statements and mandatory periodic filings.
Many more to follow…
The Web3 narrative is still in its early stages, evolving daily. New smart contracts are being created worldwide every day! Decentralization is the future, not just because I say so, but because it’s a natural progression for humanity. We crave power but despise being dominated by it. Decentralization distributes power to each individual — not equally, but fairly enough to meet everyone’s needs.
If you are looking forward to learn blockchain, you can refer to this 50 days blockchain marathon guide I created —
