fbpx
Altcoins

The Story Behind Ethereum and Formation of ConsenSys

In an interview, the co-founder of the top notch company in the cryptoworld, Ethereum, Joseph Lubin explained the challenges Ethereum had to face during the initial phases and later on he gave an insight of how ConsenSys came into being.

Bitcoin was a groundbreaker in terms of technology and gaining people’s interest around 2012. People actually began to foresee where the blockchain technology could take the world when they could use the digital currency to share their resources. The part that spoke to them the most was the decentralization of the platform, where the people could transact with one another on a secure network. He said that a lot of people in 2012 thought that “We should be using these for all of our software systems”

Meanwhile, Vitalik Buterin emerged on the scene where he was working on a project called Bitcoin 2.0. He was trying to revolutionize the initial Bitcoin prototype. This later on wore the name blockchain projects and proved as the ground for Ethereum breakthrough.

The idea was to make a system with a virtual machine at every node of the peer to peer network and a separated protocol and an application layer. At that time, the area where Bitcoin was lagging was where they failed to separate the protocol and application layer from the project. The downside of this was that if you wanted to create an application on Bitcoin, you had to start it on the protocol layer level. The idea worked pretty well for Ethereum as it eased the software developers from going to the protocol layer and fiddling with the code, now they were able to create applications using the techniques that they were familiar with and were used to.

The project, however, wasn’t as simple as the summary seems to be, there were a lot of challenges to be faced by Ethereum. People demotivated the developers by passing comments like, “The idea is still very immature and very young”

“It was unprecedented, many people thought that it could not be done; many people said that it was stupid to do it because the attack service would be so big and fuzzy. And it turned out to be a remarkable success, in my opinion.”

At that time Ethereum was trying to decentralized trust layers where 20 transaction could take place in a second but they had to add a scaling layer on top of that which helped with scaling the factor to hundreds and thousands of transactions in a second which is available on the platform now a days

There were also security challenges to be faced by Ethereum when SEC denied regulating the platform for security concerns and claimed that it is too decentralized to be qualified.

He said: “We were extremely confident that it would never be seen to be a security. We did a huge amount of legal work back in 2014, even before we launched the Ether token. The sale did not constitute the sale of the unregistered security to American citizens.

We understood the ramifications if they have declared it [a security], there would be some issues around where the token could trade, but the ecosystems are already so enormous, established decentralized that it cannot really stop that sort of thing or we had to introduce some adjustments.”

A year into the formation of Ethereum, ConsenSys was founded. It initially started as a software foundry to develop decentralized software and applications that would work on the top of Ethereum. While as of now it is known to be a large scale company with over 900 employees working for the platform. ConsenSys has built platforms like uPort, self-sovereign identity e.t.c on the top of which businesses can run.

“We also do enterprise and government consulting, it’s nearly all on Ethereum, so we do a huge amount of Ethereum focused work for the public blockchain ecosystem. We use the exact same technology to work with corporations. There’s also work done in energy, banking, insurance, healthcare, supply chain and education, and lots of things with government as well”.

The project isn’t just confined to consenSys, it has worked in Dubai in the Dubai smart city project. They also have educational academies where they graduate blockchain engineers and have done so in the past.

Shehryar Hasan

Performing artist, guitarist and sub-editor at BlockPublisher. Shehryar is an electrical engineer and blockchain enthusiast. He holds investments in bitcoin, ethereum, OST, TRX and Ripple. Email: shehryar@blockpublisher.com or contact the editor at editor.news@blockpublisher.com

Leave a Reply

This site uses Akismet to reduce spam. Learn how your comment data is processed.

Close