Crypto Year in Review 2021: Ethereum and NFT Explosion

Ethereum: the difficult path to proof of stake

Ethereum has had a crazy year. And it’s not just because of Ether’s all-time high of $4,878 on Nov. 10. With the first Ethereum ETFs from Canada, which hit the market in May, an important foundation has already been laid when it comes to Ether investments. But there were also technical advances.

On April 15, the network performed the first of three hard forks with “Berlin”. In doing so, the network has reduced gas fees and introduced a new type of transaction. So-called “envelope transactions” allowed users to create complex future transactions to reduce gas charges.

After that, it was above all the Ethereum “London” hard fork of August 5th that was able to give new impetus to the project. Importantly, the update resulted in an adjustment to the pricing policy and a reduction in the amount of Ether available in circulation. With the EIP-1559 enhancement proposal, the developers introduced an algorithmically determined base fee. The base fee should also be burned during the update. This also means that on September 6, for the first time, more ether was burned in one day than was produced.

On October 28, we received the message that the third Ethereum update in 2021 was also successful. On the one hand, “Altair” introduced thin client support. Light Clients can synchronize with network validators. You can also run it on mobile devices. As a second innovation, Altair brought the slashing function, which allows to act against inactive or abusive validators.

These three updates initially raised hopes that Ethereum 2.0. actually preceded. But on December 11 – at Ethereum time at block number 13,773,000 – the developer community then downgraded. The Arrow Glacier upgrade delayed the difficulty bomb launch by a few months. This now means that Ethereum 2.0. will be on solid ground by the middle of next year.

Hype NFT: when crypto pixels exploded

The hype surrounding non-fungible tokens (NFTs) has peaked so far in 2021. Unique, non-interchangeable collectibles started out as fun projects that are now worth millions. The people behind projects like Cryptokitties or Cryptopunks just a few years ago, they could hardly have guessed what insane hype they would trigger with their blockchain-based pixel images.

When cryptopunks hit the blockchain in June 2017, the price of ether was around $300

When Larvalabs started with the 10,000 randomly generated Cryptopunks in June 2017, the crypto market was still mostly occupied by ICOs. The price of Bitcoin had just broken through the $2,000 mark, while Ether hit an all-time high of $363 on June 19. Almost four years later, on January 23, 2021, the most expensive Cryptopunk to date went digital. The alien changed hands for just 605 Ether (at the time $761,888.57).

As the year progressed, more and more celebrities, artists and free riders jumped on the hype bandwagon. In April, Eminem launched his own NFT series, Shady Coin. But it shouldn’t stop at pixel art a la Cryptopunks. In November, auction house Christies auctioned off a 3D animated astronaut by artist NFT Beeple. The fact that this work of art can be changed and adapted to world events even after it is created obviously gives it value. Venture capitalist Ryan Zurrer pounced on the Beeple for $28.9 million – but that only makes it Beeple’s second most valuable NFT artwork, with his ‘Everydays: The first 5,000 Days’ reaching $69 million at auction.

Do you want to buy Bitcoin (BTC)?

We show you the best providers where you can buy and sell Bitcoins in just a few minutes.

To the guide

Leave a Comment