18 Million Dollars in 42 Days: The Sale That Funded Ethereum – The Crazy Crypto Stories

Before having a blockchain, Ethereum had a bill to pay. The solution: sell tokens that did not yet exist, to build a network that did not exist either. It worked beyond all expectations.

In this tenth article of The Crazy Crypto Stories, we go back in time to the summer of 2014. Last week, we recounted how Celsius turned an anti-bank slogan into a $5.5 billion disaster. This week, back to the roots: how Ethereum, revealed by Vitalik Buterin on Bitcointalk a few months earlier, went from a mere paper project to a well-funded and real blockchain. Twelve years later, July 22, 2014, remains one of the most successful bets in the entire crypto history.

A Team Cracking Before Even Raising a Dime

In January 2014, a handful of developers gathered at the Bitcoin conference in Miami around Vitalik Buterin's project. Among them were Gavin Wood, Joseph Lubin, Anthony Di Iorio, and Charles Hoskinson. But the agreement did not last: Hoskinson advocated for a for-profit structure, capable of raising funds from venture capitalists, while Buterin wanted a non-profit foundation.

The non-profit clan won. Hoskinson left the ship in mid-2014 and would later found what would become Cardano. The quarrel was settled, but Ethereum now had to find money elsewhere.

The Sale That Lasted Only 42 Days

The chosen solution was still experimental at the time: a public token sale, in exchange for bitcoin, to finance the development of the network even before its launch. The official announcement was published on July 22, 2014, on the Ethereum foundation's blog. The operation started at a rate of 2,000 ETH for 1 BTC, then the price gradually rose as the sale progressed, until a final rate of 1,337 ETH for 1 BTC, a not-so-innocent nod to the computer slang < leet >.

For 42 days, over 60 million ETH changed hands. The sale closed on September 2, 2014. In total, the operation raised the equivalent of $18.3 million, or more than 31,500 bitcoins at the time. It wasn't yet the vocabulary of the time that spoke of < ICO >, but in fact, it was the first major fundraising of this type, an operation that CoinDesk would later qualify as the < sale of the century >. At the time, it was the third largest crowdfunding ever conducted, across all sectors.

A Bet That Turned Some Bitcoins into Fortune

What few participants realized at the time was the magnitude of what they had just financed. The Ethereum network, which was still just a technical specification and a promise, would be launched a year later under the code name Frontier.

The 60 million ETH sold during this campaign now represent a significant portion of the circulating supply, and the early buyers who held onto their tokens made one of the best investments of the decade. Some learned the hard way in the opposite direction: Vitalik Buterin himself sold 500,000 ethers at $0.99 each in 2016, a choice that, in retrospect, would make any investor cringe.

The Lesson of Early Financing

Ethereum's ICO opened a breach that the entire industry rushed to exploit in the following years, for better (funding truly useful infrastructures) and for worse (the wave of substance-less projects from 2017-2018, leading to the outright ban of ICOs by China).

But unlike the vast majority of its successors, Ethereum's delivered the goods: a blockchain that still exists, that works, and that has changed the way we finance an idea before it becomes reality.