IRC was created by Jarkko Oikarinen in August 1988 to replace a program called MUT (Multi User Talk) on a BBS called Oulu Box at the University of Oulu in Finland, where he was working at the Department of Information Processing Science.
Jarkko intended to extend the BBS software he administered, to allow news in the Usenet style, real time discussions and similar BBS features.
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.
The very first server list presented, from February 15, 1993, includes servers from USA, Canada, France, Croatia and Japan.
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.
History showed most servers and users went with EFnet.
It was all open, required no passwords and had no limit on the number of connects.The new network was called DALnet (named after its founder: dalvenjah), formed for better user service and more user and channel protections.One of the more significant changes in DALnet was use of longer nicknames (the original ircd limit being 9 letters).Jyrki Kuoppala pushed Jarkko to ask Oulu University to free the IRC code so that it also could be run outside of Oulu, and after they finally got it released, Jyrki Kuoppala immediately installed another server. Jarkko got some friends at the Helsinki University and Tampere University to start running IRC servers when his number of users increased and other universities soon followed.At this time Jarkko realized that the rest of the BBS features probably wouldn't fit in his program.
In Europe and Canada a separate new network was being worked on and in December the French servers connected to the Canadian ones, and by the end of the month, the French and Canadian network was connected to the US one, forming the network that later came to be called "The Undernet".