The decentralized open blockchain and programmable platform Ethereum has been causing quite the stir within financial circles and with cryptocurrency enthusiasts. Ever since Ethereum had crossed the billion dollar market cap and throughout its rise in value and attention, it has got a lot of people dreaming about what this protocol can do for society. Ideas like Ethereum are challenging the concepts of borders, nation states, and corporate models with a new paradigm shift of code and thought.
Is Ethereum the Smartphone of Blockchains?
Ethereum was proposed in 2013 by its inventor Vitalik Buterin with development funded by its crowdsale in 2014. The crowdsale is one of the largest crowdfunds to date coming in at #5 out of 109 projects according to Wikipedia. During that time, the team of developers and co-founders raised over $18 million USD towards Ethereum’s financing. Since then the blockchain went live on July 30, 2015, and the project hasn’t slowed up since. There has been a vast array of development within the interior infrastructure of the protocol as well as exterior applications using the Ethereum software.
The native token Ether and its blockchain boast that it does far more than the average cryptocurrency platform such as its utilization of the programming language Solidity, smart contract applications, and speed. At the present time, the Ethereum network can process 25 transactions per second which to its developers is slow but in contrast to other cryptos it is fast. The inventor of Ethereum Vitalik Buterin says the project grew out of the idea he conceived that cryptocurrency could handle more than just financial transactions. Buterin explains in September of 2015:
“Many of you know that the Ethereum platform grew out of the realization that blockchains can go far beyond currency, together with a frustration with the limitations of previous projects. The core idea was simple: a blockchain with a built-in Turing-complete programming language, allowing users to build any kind of applications on top.”— Vitalik Buterin, Ethereum
Many startups and large corporations are focused in on its technology. As well as legacy financial institutions who have also been fascinated by the Ethereum protocol. This includes businesses such as JPMorgan, Microsoft, R3 CEV, IBM and others who have bolstered the use cases of the Ethereum blockchain. Given the demand for active development and alternative blockchain characteristics companies like R3, IBM and others have looked very carefully at its architecture. In fact, just recently Vitalik Buterin wrote a 40-page report for the consortium R3 that will be distributed to banks and investors interested in the Ethereum protocol. The paper titled “Ethereum: Platform Review, Opportunities, and Challenges for Private and Consortium Blockchains” explains a full technical synopsis of the Ethereum blockchain in relation to finances and other use cases. Right off the bat Buterin explains Ethereum is not like other cryptocurrencies and distributed ledgers in the world. Buterin details this in the introduction:
“Whereas previous blockchain protocols could be viewed as single-function tools, like pocket calculators, or multi-function tools like Swiss army knives, Ethereum is the smartphone of blockchains: a universal platform where, whatever you want to build, you can just build it as an “app”, and Ethereum users will be able to benefit from it immediately without downloading any new software.”— Vitalik Buterin, Ethereum
The Largest and Most Experimental Decentralized Autonomous Organization
Another aspect of the Ethereum landscape that has risen is the creation of a decentralized autonomous organization to help the community and network flourish. The DAO Hub was created by members of the Slock.it team who builds Internet of Things solutions using the Ethereum protocol. Ethereum’s version of a decentralized autonomous organization is basically like a giant corporation with no traditional infrastructure, board members, and CEOs. There are only investors within the organization who vote on Ethereum-based funding and code. The funding proposals are aimed to maintain the Ethereum architecture and overall environment of decentralized, open source, and peer-to-peer networking.Visual from Johannes Pfeffer’s Medium Blogpost “A Network View on The DAO”
The DAO crowdfund through a token sale has become the largest crowdfund on the internet according to Wikipedia’s list. The DAO Hub raised a total of 12.07 million Ether equivalent to $166 million USD at the time of this writing. This feat is the backbone of a very large voting system and business organization that according to the team operates “solely with the steadfast iron will of immutable code.” Voting is proportional to one’s stake of DAO tokens. Voters then give their voting consent to contractors who initiate the individual proposals all the while performing in a holacratic type of formation.
The project has been criticized, and just recently researchers have called for a Moratorium on Proposals. The moratorium asks to put proposals on temporary hiatus until certain attack vectors are solved. The project is very big now, and its magnitude has been one of a kind for this type of organization so many eyes have been watching its every move.
Ethereum May Not Be For Your Grandmother
If you have a hard time explaining Bitcoin to your friends, then Ethereum is even harder at times. To some, topics like Ethereum, smart contracts, and decentralized autonomous organizations are very hard to understand. Some people think that the mainstream is not ready for a 2.0 evolution quite yet as they are just learning the aspects of 1.0 technology. However, there are a lot of people who understand the digital revolution and believe that concepts like Ethereum’s network could power great events like the Internet of Things.
People believe that ideas like Ethereum could help end the nation state’s corruption and actually replace the legal system with this kind of 2.0 technology. Even Buterin himself has described a legal system based on Ethereum but said the idea isn’t meant to overtake traditional courts. But with concepts like the DAO and dispute resolution services and arbitrary decisions based on code the seeds of new types of thought are sprouting.
On the other hand, there are applications coming out that are trying to bring Ethereum to the masses with simpler designs than the likes of the Mist wallet. Companies like Decentral are trying to bring the Ethereum blockchain, the DAO, and even Bitcoin to the masses in a user-friendly fashion with services like Jaxx. The Vevue project is a way users can record 30-second clips and earn Bitcoin. If Ethereum visionaries are correct, the protocol could very well revolutionize new platforms that perform functions like Facebook, Google, eBay, and Amazon in a decentralized way.
Ethereum is looked up to for a reason because people in the world want these visions to succeed. Where the ideas Nick Szabo stated back in the nineties concerning smart contracts and Timothy Mays Crypto Anarchist Manifesto come to life. There are competitors coming behind Ethereum with missions to implement the same types of smart contracts and apps built upon their blockchains. Rootstock aims to bring these concepts to the Bitcoin network, and alternative distributed ledger protocols like BitShares, Maidsafe, Expanse, Tau Chain, Omni, Lisk, and many others also want to be the smartphones of blockchains. Some of them are not aiming to compete and are collaborating with the Ethereum network and developers. All of these innovating developers and projects are breaking the mold when it comes to how we question money, finance management, and self-sovereignty. With technologies like Bitcoin, Ethereum, and other protocols the world is questioning the very concepts of banking, borders, corporations, business and exchanging value in a whole different way. The programmable currency may not be for your grandmother, but innovative startups, enterprise businesses and those with geopolitical ideologies believe in the nature of this protocol.
“Just as the technology of printing altered and reduced the power of medieval guilds and the social power structure, so too will cryptologic methods fundamentally alter the nature of corporations and of government interference in economic transactions.”— Timothy May, Cypherpunk, 1988
Source: Wikipedia, DAO Hub, Ethereum Foundation Blog, R3, Tim May 88′,
Images via: Johannes Pfeffer‘s blog, Pixabay, Wiki Commons, and Ethereum websites
Disclaimer:The statements,views and opinions expressed in this column are solely those of the author and do not necessarily represent those of Live Bitcoin News