I thought this page was very interesting so I just copied it here. As you can see, it was authored by Daniel Stenberg, whom I think put a lot of effort in to it.
Author: Daniel Stenberg
Version: 0.8 - September 24, 2002
History of IRC (Internet Relay Chat)
I've done my very best to gather information from as many sources as possible to verify facts, stories and dates. If you have additional information, have found errors in my text or just feel like commenting anything, email me! I find collecting historical facts about internet events really hard.
Feel free to link to this page or host it elsewhere. Please keep me credited as author.
IRC was born during summer 1988 when Jarkko "WiZ" Oikarinen wrote the first IRC client and server at the University of Oulu, Finland (where he was working at the Department of Information Processing Science).
Jarkko intended to extend the BBS software he administrated at tolsun.oulu.fi, to allow news the usenet style, real time discussions and similar BBS features. The first part he implemented was the chat part, which he did with borrowed parts written by his friends Jyrki Kuoppala and Jukka Pihl. It was initially tested on a single machine, and according to the words from Jarkko himself "The birthday of IRC was in August 1988". The first IRC server was named tolsun.oulu.fi.
Jarkko got some friends at the Helsinki and Tampere Universities to start running IRC servers when his number of users increased. Other universities soon followed. Markku Järvinen helped improving the client. At this time Jarkko realized that the rest of the BBS features probably wouldn't fit in his program!
Jarkko got in touch with guys at the University of Denver and Oregon State University. They had got an IRC network running (they had got the program from one of Jarkko's friends, Vijay Subramaniam -- the first non-finnish person to use IRC) and wanted to connect to the finnish network. IRC then grew larger and got used on the entire Finnish national network - Funet - and then connected to Nordunet, the Scandinavian branch of the Internet. In November 1988, IRC had spread across the Internet.
In the middle of 1989, there were some 40 servers worldwide.
ircII was released 1989 by Michael Sandrof.
In July 1990, IRC averaged at 12 users on 38 servers.
In 1990, a new network was set up in order to develop a new version (2.6) of the ircd. The network named ChNet (about 25 servers and no users) existed a few months before disagreements among the programmers caused it to dissolve.
In August 1990 the first major disagreement took place in the IRC world. The "A-net" (Anarchy net) included as server named eris.berkeley.edu. It was all open, required no passwords and had no limit on the number of connects. As Greg "wumpus" Lindahl explains: "it had a wildcard server line, so people were hooking up servers and nick-colliding everyone".
The "Eris Free network", EFnet, made the eris machine the first to be Q-lined (Q for quarantine) from IRC (wumpus' words again: "Eris refused to remove that line, so I formed EFnet. It wasn't much of a fight; I got all the hubs to join, and almost everyone else got carried along."). A-net was formed with the eris servers, EFnet was formed with the non-eris servers. History showed most servers and users went with EFnet. The name EFnet lived only shortly, as soon as ANet had died, the name EFnet became void too. There was one and only IRC left again.
TubNet was the next network to splinter off. It was created by a crowd of people in #hottub that grew tired of all the netsplits. It got 5 servers and around 100 users. It died again in September the same year.
One often-talked-about event in the history of IRC is the gulf war. In early 1991, live reports were available and more than 300 concurrent users were experienced for the first time.
Another fork effort, the first that really made a big and lasting difference, was initiated by 'Wildthang' in USA October 1992 (it forked off the EFnet ircd version 2.8.10). It was meant to be just a test network to develop bots on but it quickly grew to a network "for friends and their friends". In Europe and Canada a separate new network was being worked on (by '_dl' and 'WIZZARD') and in December the french servers connected to the canadian ones, and in the end of the month, the .fr-.ca network was connected to the US one and the network that later came to be called "The Undernet" was born.
The "undernetters" wanted to take ircd further in an attempt to make it less bandwidth consumptive and to try to sort out the channel chaos (netsplits and takeovers) that EFnet started to suffer from. For the latter purpose, the Undernet implemented timestamps, new routing and offered the CService -- a program that allowed users to register channels and then attempted to protect them from troublemakers. (More or less a global defense bot.) The very first server list presented, from Febrary 15th 1993, includes servers from USA, Canada, France, Kroatia and Japan. On August 15th, the new user count record was set to 57 users.
In May 1993, the Request For Comments 1459, for the IRC protocol is out for the public. It has since been subject to many violations and extensions. More about that on other places.
During the summer (some sources mention July) 1994, the Undernet is itself forked. This time, the new Network is called Dalnet (named after its founder: dalvenjah), and they formed the new network for better user service and even more user and channel protections. One of the more significant changes in Dalnet already from the beginning is their use of longer nicknames (the original ircd limit being 9 letters). Dalnet ircd modifications were made by Alexei "Lefler" Kosut.
Dalnet was thus based on the undernet ircd server, although the dalnet pioneers were EFnet abandoners. According to James Ng the initial dalnet people were "ops in #StarTrek sick from the constant splits/lags/takeovers/etc".
Dalnet quickly offered global WallOps (IRCop messages that can be seen by users who are +w (/mode NickName +w)), longer nicknames, Q:Lined nicknames (nicknames that cannot be used i.e. ChanServ, IRCop, NickServ, etc.), global K:Lines (ban of one person or an entire domain from a server or the entire network), IRCop only communications: GlobOps, +H mode showing that an IRCop is a "helpop" etc.
Much of Dalnet's new functions were written in early 1995 by Brian "Morpher" Smith and allow users to own nicknames, channels, send memos and more.
Undernet split (again) in March 1996 when the sole Australian server delinked from Undernet because of difficulties with the connection across the TransPacific Australian/United States network link. The first few months of oz.org's existance were primarily a trial delink from the Undernet because of the inability to maintain a link during peak usage hours. One of the two designers (chaos and seks) of the orginal Undernet X and W chanserv was Australian, and the same code was used for Oz.org's Z (the name of the chanserv). In June 2001, ozorg boasted peak usages of 4,000 simultaneous users.
In July 1996, after months of flame wars and discussions on the mailing list, there was yet another split due to disagreement in how the development of the ircd should evolve. Most notably, the "european" (most of those servers were in europe) side that later named itself IRCnet argued for nick and channel delays, where the EFnet side argued for timestamps. Most (not all) of the IRCnet servers were in Europe, while most of the EFnet server were in the US. This event is also known as "The Great Split" in many IRC societies. EFnet has since (as of August 1998) grown and passed the number of users it had then. In the autumn year 2000, EFnet has some 50,000 users and IRCnet 70,000.
Open Projects Network
Yet another IRC network that opened its doors in 1998, and had about 100 users and less than 20 channels that year. In late 2001 it had grown to nearly 4,000 users and over 1,300 channels. The OPN uses the Dancer IRCD server, after having been using ircu the intial few years.
Of course, while internet is booming so does IRC. There exists hundreds of independent IRC networks today (like amiganet, linuxnet, galaxynet, bestnet, NewNet, AnotherNet, ChatNet, UpperNet, ZAnet, X-Net, GammaNet, SuperChat, IceNet, RedBrasil, GR-Net, AlphaStar, SorceryNet etc), but luckily there is "only" four of the main ones (this was the reality back in 1998) that keep develop their own version of the ircd server software.
Of course, as of 2002, lots of other networks have popped up and now numerous of them are developing their own customized versions of the IRC protocol.
IETF-IRCUP was an initiative started in January 1998, to gather all the flavours of IRC servers to document a new RFC and possibly set a new standard for all networks to commit to. That project died.
CTCP/2 was an attempt, started in 1997 by Bjorn Reese, to develop and standardize the Client To Client Protocol that was never in the RFC. Clients have been known to extend and modify the original CTCP protocol without allowing non-compliant clients to filter the new codes. CTCP/2 was meant to define how codes and perhaps more important new codes should be introduced in order to let old clients remain functional. It was also meant to address the IPv6 problems the DCC intiating sequence has. The CTCP/2 project has died as well.
We'll just have to wait and see what the future of IRC has to show...
I did not experience all of this. I found information on various places and I received information from various people in order to write this. People that have helped me with this include:
Greg "wumpus" Lindahl, Vesa "vesa" Ruokonen, James Ng, Tuomas Heino and Richard (eagle`s on undernet).