Oxygen Catastrophe
From Palaeos.org
The Oxygen Catastrophe (also known as the Great Oxidation or the Oxygen Revolution) refers to a drastic change in the composition of the Earth's atmosphere that happenned some 2.5 billion years ago. It started when photosynthesizing bacteria became more abundant and began to pump more oxygen into the atmosphere (oxygen is a by-product of photosynthesis; a process that uses water, carbon dioxide and light in order to make food.) The remains of these early bacteria come in the form of stromatolites.
Pre-Catastrophe Earth and Origins of the Oxidation
Before this event ocurred, the atmosphere was radically different from our modern one; it was made up mostly of carbon dioxide and nitrogen and would've been noxious to us. The oceans were realtively iron-rich and the bacteria reponsible for the catastrophe, the cyanobacteria, were relatively rare.
Once the cyanobacteria began to dominate the planet, their waste oxygen began to form rust with the iron in the oceans, making this changing environment hostile to other microorganisms that were dependent on the iron for survival (oxygen levels shot up from 0.002 percent to 20 per cent.) Furthermore, the excess oxygen began to break down the methane that existed in the planet's atmopshere, causing the planet's temperatures to plummet. Methane would've created a friendly environment for more primitive living beings, but this Oxidation changed all of that. This event would eventually allow for ice ages to take over the surface of the Earth. In the modern day, the banded iron formations are rocks with different color patterns that reveal changes in the atmosphere; the red sequences in the samples reveal times when oxygen was more abundant and darker sequences reveal more anoxic conditions.
Sources and Further Reading
Marshall Editions, The Illustrated Encyclopedia of the Prehistoric World: A comprehensive guide to the geology and evolution of the prehistoric world, featuring illustrations of more than 600 species (New Jersey, Book Sales, INC., 2006), 50-53.
http://www.damninteresting.com/how-bacteria-nearly-destroyed-all-life
http://www.historylines.net/history/Biology/oxygen.html