Earlier this month the popular alternative virtual currency, Bitcoin, made headlines after the Australian Entrepreneur Craig Steven Wright announced that he was the originator and sole creator of the platform. Negating the long-held belief that the founder’s title was Satoshi Nakamoto, the response was mixed with relief and criticism over Wright’s abrupt claims. With Bitcoin’s concept being in effect for close to a decade now and valued at about $7 billion, Ethereum, another platform has entered the ring. Supporters are vouching that it’s Bitcoin’s bigger and more ambitious younger brother with a vision far surpassing the popular pioneer of cryptocurrency.
Vitalkik Buterin was one of Bitcoin’s early supporters inspired by the system’s block chain and cryptocurrency network. Co-founding Bitcoin Magazine, he gradually channeled his energy towards an advanced platform providing its own unique competitive edge known as Ethereum. Partnering with CEO of Consensus Systems, Joseph Lubin, in 2013, they envisioned a decentralized peer-to-peer grid that could manage business applications including the capacity to take incoming/outgoing transactions. They both brought its concept to the public at Bitcoin Miami 2014 and later that year launched a Swiss nonprofit, Ethereum Foundation, raising over $18 million via crowdfunding support. First-time backers received 60 million tokens known as “ether” but weren’t able to utilize them until a year later after the platform’s “genesis block” launched. Nearly identical to Bitcoin’s block chain, this was a publicly available record displaying all of the network’s activity. The price of one token jumped from .50 to $1 in 2015 and hovered around that range for the first quarter of this year. It surged virtually overnight at the current asking price of $14 and the market capitalization increased from $72 million to its present $1.1 billion; a whopping 1,100% gain since the beginning of 2016.
But what exactly is the difference that separates Ethereum from the industry’s ancestor Bitcoin? Basically its intention is to have an open source platform to generate and disperse decentralized applications referred to as ‘smart contracts.’ Proponents imagine a future where these contracts power applications allowing users to do much more than process payments. Applications would be created by its users and be compensated with ether eliminating the need for a centralized system that governs their every move. So far, there are exclusive applications such as the Ethereum Wallet which allows users to manage its crypto-assets, an option for users to design their own unique currency and even launch a crowdfunding campaign. These ‘trustless crowdsales’ holds backer’s ether until the given date or the goal is reached and depending on the outcome will be dispersed to the campaign’s leaders or reimbursed back to the contributors. In addition, there is the opportunity for users to create a ‘decentralized autonomous organization’ (DAO) where companies are controlled by the blockchain giving everyone involved a fair say in business affairs. The company Slock.it launched a crowdfunding campaign 2 weeks ago in hopes of starting their own DAO and so far have raised over $131 million; the largest amount ever raised via crowdfunding. The amount could very well hit $200 million indicating that users and spectators strongly believe in Ethereum’s vision.
At the time of publishing, The Scope Weekly hasn’t heard back from the company. We will update the article as soon as Ethereum provides us additional information.
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