= a initiative for trust transactions on the blockchain: Ethereum is a next-generation distributed cryptographic ledger that is designed to allow users to encode advanced transaction types, Smart Contracts and decentralized applications into the Blockchain.
URL = http://ethereum.org/
"ethereum it is not another cryptocurrency. It is rather a P2P financial infrastructure able to support any kind of currency design, if expressed as a collective Smart Contract."
"Ethereum is a community-driven project aiming to decentralize the internet and return it to its democratic roots. It is a platform for building and running applications which do not need to rely on trust and cannot be controlled by any central authority." 
0. Adam Ludwin:
"There’s a decentralized application called Ethereum that is a decentralized application for launching decentralized applications. I am sure by now you have heard of “initial coin offerings” (ICOs) and “tokens.” Most of these are issued on top of Ethereum. Instead of building a decentralized application from scratch the way Bitcoin was, you can build one on top of Ethereum much more easily because a) the network already exists and b) it’s not designed for a specific application but rather as a platform to build applications that can execute arbitrary code. It is “featureless.”
Ethereum’s protocol incentivizes entities to contribute computing resources to the network. Doing so earns these entities Ether, the crypto asset of Ethereum. This makes Ethereum a new kind of computing platform for this new class of software (decentralized apps). It’s not cloud computing because Ethereum itself is decentralized (like aether, get it?). That’s why its founder, Vitalik Buterin, refers to Ethereum as a “world computer.”
To summarize, in just the last few years the world has invented a way to create software services that have no central operator. These services are called decentralized applications and they are enabled with crypto assets that incentivize entities on the internet to contribute resources — processing, storage, computing — necessary for the service to function." (https://blog.chain.com/a-letter-to-jamie-dimon-de89d417cb80)
"Ethereum is a next-generation distributed cryptographic ledger that is designed to allow users to encode advanced transaction types, smart contracts and decentralized applications into the blockchain. Ethereum will support custom currencies or "colored coins", financial derivatives, and much more, but unlike many previous networks that attempted to accomplish the same thing Ethereum does not attempt to constrain users into using specific "features"; instead, the ledger includes a built-in Turing-complete programming language that can be used to construct any kind of contract that can be mathematically defined."
2. by Nathan Schneider:
"In November, Buterin started to circulate a white paper describing a platform on which the whole breadth of new cryptocurrency applications could be built. He called it Ethereum. Rather than being a Swiss Army knife of separate tools, Ethereum would be simple: It would combine a bitcoin-like network with a universal programming language that would allow users to invent whatever tools they want. These tools would be able to interact with one another and conduct transactions with a common currency called ether. In the white paper, he described Ethereum as a “Lego of cryptofinance.” With it, all the imagined potential of bitcoin could be put to use in one place — plus a lot of the not-yet-imagined potential too.
Buterin expected that he’d get some useful feedback on the proposal, maybe spend a few weeks coding a prototype and then move on to something else. But now, at 20, he is seeing his idea catch on among fellow hackers around the world, and arrangements are being made to incorporate a nonprofit for Ethereum in the legal free-for-all of Switzerland." (http://america.aljazeera.com/articles/2014/4/7/code-your-own-utopiameetethereumbitcoinasmostambitioussuccessor.html)
3. Stephan Tual:
"Ethereum is a platform that makes it possible for any developer to write and distribute next-generation decentralized applications. Borrowing the concept of distributed consensus and cryptographic proof that makes cryptocurrencies such as Bitcoin so effective in trustless payments, Ethereum extends the use of these technologies to trustless agreements. This allows developers to easily build innovative new products on a censorship and collusion-resistant foundation.
The fundamental building block in Ethereum is a contract, a program that lives on the Ethereum network and follows a series of steps every time it receives a transaction. Contracts can store data, send and receive transactions and even interact with other contracts holding third party data. They are maintained by the network, without any central ownership or control. Contracts are written in a language instantly familiar to any programmer and powered by Ether, the base unit of Ethereum cryptocurrency (put differently, its cryptofuel).
Ethereum can therefore be thought of as a programmable distributed network. This has implications going far beyond the seemingly obvious applications such as financing agreements. The fact that Ethereum, is, by its very design, resistant to tampering and fraud, also permits a range of other solutions to everyday problems regarding identity and verification which are currently solved at great expense. Voting machines, healthcare software, registration of legal documents such as wills, transfer of title to goods and land, reputation systems, and even traffic navigations systems or social networks can be build on a network where users stay in control of their personal information — and funds — at all times." (https://medium.com/p/4790bf5f7743)
4. Rachel O'Dwyer:
"The Ethereum project really illustrates this possibility to abstract the blockchain from a specifically monetary context to one in which we’re thinking about decentralised economies and services more generally. In short, it extends the decentralised capabilities of Bitcoin beyond financial transactions. Bitcoin involves two parameters: a trustless database (more on this later) and a transactions system capable of sending value from place to place. In order to do this, Bitcoin implements a simple scripting language. But this scripting language is limited in terms of what it can do. Bitcoin’s scripting language lacks certain fine-grained controls and nuances that might be necessary to provision other services. To do more complicated things, the expectation was that you needed to create an entire meta-protocol layer or even a new blockchain. Ethereum developers recognised that these functions could be implemented and scaled if there was a stronger foundational layer with a powerful scripting language for these protocols to be built on. Ethereum builds a generalised framework that extends the capabilities of the blockchain to allow developers to write new consensus applications. This is a blockchain with a built in Turing-complete programming language, allowing anyone to create applications and rules to support them. In this way, we move beyond monetary transactions towards any number of foreseeable applications." (https://www.academia.edu/11627298/The_Revolution_Will_not_be_Decentralised_Blockchain-based_Technologies_and_the_Commons)
"Finally, the solution (to undo the effects of the heist of 'The DAO') was made by a hacker team named Robin Hood, they did the same thing with the same technique: they threw the remaining money out of the thief’s way and they give it back to the owners. The DAO has reached a very sad end, but the story is not over yet. Because The DAO gathered a huge amount of Ether, this attack had shaken the entire Ethereum network. Ethereum itself has been compromised. So most of the developers decided to simply “roll back” the wheel of time to not have the robbery event. This, however, is impossible on a blockchain system. The only solution was to create a new Ethereum network based on the old blockchain. Most of them were joined the new network, so this it what we call it Ethereum today. However, some of them did not agree with the decision, because this is completely opposed to the principles of the block chain, so they continued to operate the old network. This is Ethereum Classic today. Virtually two parallel Ethereum universes were created." (https://medium.com/envienta-open-source-everything/daos-artificial-intelligence-and-virtual-states-or-new-forms-of-organizations-part-1-8a97cd56b27)
1. Primavera Di Filippi:
"These algorithmical entities are both autonomous and self-sufficient: they charge users from the services they provide so as to pay others for the resources they need (e.g. bandwidth, cpu). Thus, once they have been created and deployed onto the blockchain, they no longer need (nor heed) their creators. But if DAOs are independently operated — neither owned nor controlled by any given entity — who is actually in charge, responsible for, or accountable for their operations? And if their resources cannot be seized (because DAOs have full sovereignty over them), how can they be required to pay damages for their torts?" (http://cyber.law.harvard.edu/events/luncheon/2014/04/difilippi)
Scaling distributed forms of cooperation
"One significant claim is that blockchain-based technologies such as Ethereum can support and scale distributed forms of cooperation on a global scale. This has been referred to under a few different names: the recent Coin Center report refers to Distributed Collaborative Organisations, while Ethereum’s founding developer Vitalik Buterin speaks elsewhere about Decentralised Autonomous Organisations. As David Bollier recently pointed out, this model resonates with organisations that are interested in fostering commons-based peer-production. Where questions about how to reach consensus, negotiate trust and especially scale interactions beyond the local are pervasive in the commons, the blockchain looks set to be a game changer. In this context, the blockchain is presented as an algorithmic tool to foster trust in the absence of things like social capital, physical colocation or trusted third-party management. These are actually referred to as ‘consensus’ algorithms, and they are the staple of projects such as Ethereum and Ripple. As David Cohen has described it “Trust, rules, identity, reputation and payment choices are embedded at the peer level. Participants arrive already trusted and decentrally acknowledged”. Cohen and Mougayar have dubbed this innovation the “trust web” to describe the new suite of applications that weave network value and consensus into the protocol itself, forgoing the social institutions and relations that were previously mandatory.
Ethereum describes itself as “an infrastructure for next generation social and economic systems”. Blockchain innovations that manage networks, servers or natural resources really do radicalise infrastructure. We’re no longer speaking about monolithic resources with prohibitive barriers to entry, the quintessential server farm housed in some distant industrial estate. Instead, we can imagine infrastructure as something immaterial and dispersed, or managed through flexible and transient forms of ownership. Where powerful servers, channels and processing capacities seem like the primary chokepoint of open networks, the blockchain is a powerful antidote. As Buterin argues in a recent interview: We would build a decentralised Internet network where all of us would access documents and content without going through a server. It means that you will need zero infrastructure to develop and distribute applications. The payoff seems to be that new blockchain-based technologies have the potential to support new forms of commons-based peer production, supplying necessary tools for cooperation and decision making, supporting complementary currencies and even provisioning infrastructures." (https://www.academia.edu/11627298/The_Revolution_Will_not_be_Decentralised_Blockchain-based_Technologies_and_the_Commons)
What you could do with Ethereum
by Nathan Schneider:
"What bitcoin is for money, Ethereum is for contracts, and contracts are part of what undergirds any relationship or organization or political order. As enthusiasts attach their own ambitions to the Ethereum concept, Buterin has found that his “Lego of cryptofinance” could have an impact far beyond finance. “When other people came along and started bringing their ideas in,” he says, “I realized having a more efficient and powerful form of money is almost the least interesting part.” A group called BitCongress, for instance, is already using Ethereum as the basis for a cryptography-created legislation toolbox that would make polls easy and verifiable without the need for a trusted authority to count the votes.
With Ethereum, one could code a constitution for a nongeographic country that people can choose to join, pay taxes to, receive benefits from and cast votes in — and whose rules they would then have to obey. One could design a transnational microlending program or a scheme for universal basic income or a new kind of credit score. In one online video two Ethereum pioneers demonstrate how to code a simple marriage contract. The world’s next social contracts, the successors to the Declaration of the Rights of Man and the U.S. Constitution, could be written in Ethereum’s programming language.
What makes much of this possible is also perhaps the creepiest outgrowth of cryptocurrency 2.0: distributed autonomous organizations, or DAOs. Based on charters taking the form of code on a peer-to-peer network, these are entities that could automate many of the tasks of a conventional organization with varying levels of human input. For instance, a DAO could act democratically, based on the votes of its members, or it could conduct activities on the network without consulting human users at all. In his talks, Buterin sometimes makes a passing reference to Skynet, the computer network in the “Terminator” movies that mobilizes robots in a war of extermination against human beings. “Nothing is stopping you with Ethereum at your fingertips,” he claimed in the original white paper. He has felt the need to produce a series of posts on the Ethereum blog titled “DAOs are not scary,” which are only marginally reassuring." (http://america.aljazeera.com/articles/2014/4/7/code-your-own-utopiameetethereumbitcoinasmostambitioussuccessor.html)
Potentially Oppressive Aspects
"Primavera De Filippi, a researcher at Harvard’s Berkman Center for Internet and Society who studies the legal implications of decentralized networks, takes such dystopic possibilities seriously. In Ethereum “everything is dictated by the code,” she says. “Anything that is completely computer-operated is a potentially oppressive system.”
Before the code takes charge, however, its inventors carry the responsibility for making Ethereum useful, fair and secure. “Ultimately it depends on Vitalik being a benevolent philosopher-king,” says Joel Dietz, a cryptocurrency entrepreneur in Silicon Valley. But the Ethereum community expresses little hesitation in vesting so much responsibility in someone who was, until a few weeks ago, still a teenager, albeit a supersmart one. Quite the opposite, in fact. Ethereum has released a video, modeled on Apple’s famous “The Crazy Ones” commercial, that places Buterin at the end of a sequence of computer innovators, including Alan Turing and Steve Jobs.
Hype comes easily to those in the tech community, but De Filippi believes Ethereum is poised to have real-world impact. “Bitcoin has created precedents that have shown this is not so crazy,” she says of the project’s transformative potential. De Filippi has made Ethereum a major focus of her research, and she says that cryptocurrency investors are starting to do the same. “They are really, really excited, and they will invest a lot of money in Ethereum, which didn’t happen at the beginning of bitcoin.” (http://america.aljazeera.com/articles/2014/4/7/code-your-own-utopiameetethereumbitcoinasmostambitioussuccessor.html)
Unbreakable Contracts may be an illusion
"Another post on Ethereum says that in the future we will be able to use the platform build "unbreakable contracts." I immediately thought back ten years to the notion that investment bankers had figured out how to take risk out of investment. We're still cleaning up that mess. I don't think that there is an ounce of malevolence in the brilliant inventors behind Ethereum. This is fabulously creative and innovative technology. I'd personally like to be part of making it better and accessible for non-technically minded lawyers. Its creators can't be faulted for not knowing what they don't know and in getting caught up in the moment. It's the fault of lawyers -- and that's because (in part) there aren't enough lawyers who actually (1) are willing to understand the technology at a granular level and (2) can support innovation while providing the right guidance.
Why is the notion of an unbreakable contract problematic? It assumes that software can create perfect understanding between people, and that all terms in a contract can be described in code (which is language, still). There's a difference between a payment guarantee (like a letter of credit, for example, in old world terms,) which is triggered if and when a specify event happens. Can you automate that using crypto-currency and do it better? Maybe. But selecting which events are important to specify is one thing ("completion", "substantial completion", "delivery" etc) deciding what those things mean is something altogether different. And endlessly complicated. This doesn't mean that contracts can't be better and that Ethereum can't help streamline the process. But the notion that cases, laws and lawyers aren't relevant or are responsible for complexity isn't quite right. The fact that laws are complex is at least in part because people are complex and our transactions are too." (https://www.linkedin.com/today/post/article/20140501211427-112013610-byzantium-etherium-contracts-cucumbers)
"One common concern about Ethereum is the issue of scalability. Like Bitcoin, Ethereum suffers from the flaw that every transaction needs to be processed by every node in the network. With Bitcoin, the size of the current blockchain rests at about 20 GB, growing by about 1 MB per hour. If the Bitcoin network were to process Visa's 2000 transactions per second, it would grow by 1 MB per three seconds (1 GB per hour, 8 TB per year). Ethereum is likely to suffer a similar growth pattern, worsened by the fact that there will be many applications on top of the Ethereum blockchain instead of just a currency as is the case with Bitcoin, but ameliorated by the fact that Ethereum full nodes need to store just the state instead of the entire blockchain history." (http://buyxpr.com/build/pdfs/EthereumWhitePaper.pdf)
A class analysis of the token economy
By Vincent Chen and Ramon Recuero:
"We’ve come to the understanding that in the blockchain paradigm, developers can capture value through protocol innovation. To continue our discussion, we review how blockchain technologies evolved to eventually cater to developers. Eight years ago, Bitcoin was conceived as a virtual currency that removed the need for centralized financial systems. Initially, developers actually tried building applications upon the Bitcoin blockchain by storing data in the blockchain itself, but it turned out to be pretty inefficient (as described in another old Joel post!). One of these developers, Vitalik Buterin, was frustrated by Bitcoin’s immobilism and risk averse culture for adopting new developer-friendly features. So, he built his own platform, Ethereum.
While Bitcoin was originally intended to serve as a new medium for financial store of value, Ethereum was invented to serve as a Turing complete developer environment. In Ethereum, developers write smart contracts in the Solidity programming language, and those smart contracts are run in the Ethereum Virtual Machine (EVM). Here, we observe an opportunity for developers to fork and implement their own blockchains to serve different purposes. To do so, however, would require rekindling developer support and network effects that existing blockchain technologies had previously achieved. Today, building on top of existing networks like Ethereum allows developers to become stakeholders in not only their own applications, but also the underlying protocol." (http://blog.ycombinator.com/building-for-the-blockchain/)
How Ethereum Might Support the Commons
By Rachel O'Dwyer:
"Some of these applications are still speculative; some of them are already implemented. Potential applications of Ethereum include peer-to-peer forms of cloud computing or Dropbox; incentivised Wi-Fi mesh networking or big data and machine learning; games and gambling; reputation systems; and of course financial applications. Already existing applications include Airlock.me a keyless access protocol; La’Zooz, an alternative ride-sharing application; the Eris stack, a distributed application server; Bitvote a distributed voting system; and Traity and Cryptoswartz, both online reputation systems.
One significant claim is that blockchain-based technologies such as Ethereum can support and scale distributed forms of cooperation on a global scale.
This has been referred to under a few different names: the recent Coin Center report refers to Distributed Collaborative Organisations, while Ethereum’s founding developer Vitalik Buterin speaks elsewhere about Decentralised Autonomous Organisations. As David Bollier recently pointed out, this model resonates with organisations that are interested in fostering commons-based peer-production. Where questions about how to reach consensus, negotiate trust and especially scale interactions beyond the local are pervasive in the commons, the blockchain looks set to be a game changer. In this context, the blockchain is presented as an algorithmic tool to foster trust in the absence of things like social capital, physical colocation or trusted third-party management. These are actually referred to as ‘consensus’ algorithms, and they are the staple of projects such as Ethereum and Ripple. As David Cohen has described it “Trust, rules, identity, reputation and payment choices are embedded at the peer level. Participants arrive already trusted and decentrally acknowledged”. Cohen and Mougayar have dubbed this innovation the “trust web” to describe the new suite of applications that weave network value and consensus into the protocol itself, forgoing the social institutions and relations that were previously mandatory.
Another innovation is that Ethereum incentivises participation, encouraging actors to contribute without introducing centralisation. Ethereum also puts features in place to discourage centralisation in the future. In order to use an Ethereum application, users make micropayments to the developers in ether, Ethereum’s coin, or ‘cryptofuel’ as they term it. This might be making a micropayment in turn for storage space on a server or for acting as a relay in a mesh networking protocol. For example, in a hypothetical Ethereum mesh network, anybody could act as a node, charging small amounts for relaying people’s messages (in the region of a few microcents per kb) and alternatively paying to have their own messages relayed. We can take this further and reward people for other kinds of contributions, such as writing source code or producing creative content on a website. Monetary transactions aside, this encourages people to contribute to the commons and puts systems in place to try and protect its resources from commercial expropriation.
A third significant innovation is a change to infrastructure. Ethereum describes itself as “an infrastructure for next generation social and economic systems”. Blockchain innovations that manage networks, servers or natural resources really do radicalise infrastructure. We’re no longer speaking about monolithic resources with prohibitive barriers to entry, the quintessential server farm housed in some distant industrial estate. Instead, we can imagine infrastructure as something immaterial and dispersed, or managed through flexible and transient forms of ownership. Where powerful servers, channels and processing capacities seem like the primary chokepoint of open networks, the blockchain is a powerful antidote. As Buterin argues in a recent interview: We would build a decentralised Internet network where all of us would access documents and content without going through a server. It means that you will need zero infrastructure to develop and distribute applications. The payoff seems to be that new blockchain-based technologies have the potential to support new forms of commons-based peer production, supplying necessary tools for cooperation and decision making, supporting complementary currencies and even provisioning infrastructures.
At this early stage of development, it’s also crucial to think about how criteria like governance, property relations and modes of production are engineered into the blockchain, and what centralising tendencies or emerging possibilities for control might accompany this protocol. The issue most frequently cited has to do with the difficulty of regulating rogue companies in a distributed system. Primavera de Filippi, a researcher at the forefront of legal challenges in distributed organisation, points to the difficulty regulating companies and identifying who or what is in charge when things go wrong. The blockchain is still anybody’s baby and not the exclusive bequest of groups working towards a decentralised Internet or a ‘Post-Snowden’ Internet economy. Companies from share economy start-ups to major players in IT are looking to the blockchain for their next meal ticket. IBM, for example, is currently in talks about a blockchain-tied cash system with a number of central banks. Other issues concern the design of trustless architectures and smart property.
First of all, What Kind of Subjectivity Does the Blockchain Support? In the development of consensus algorithms and monetary incentives, there’s an assumption that we can delegate much of the messiness of human relations to algorithmic governance, anticipate the motivations of individual actors and foreclose destructive behaviours. This comes back to this question of trust, something I’ve already written about in relation to Bitcoin. The claim being made is not that we can engineer trust in friends, institutions or governments, but that we might dispense with them altogether in favour of what Bill Maurer, Taylor C. Nelms and Lana Swartz refer to as ‘trust in the code.’ As outlined in the Bitcoin whitepaper, proof-of-work is not a new form of trust, but the abdication of trust altogether as social confidence in favour of an algorithmic regulation. In other words, it doesn’t matter whether I believe in my fellow peers just so long as I believe in the technical efficiency of the blockchain protocol. What kinds of subjectivity do we want to algorithmically inscribe into our systems? Blockchain start-ups begin from the assumption that there is no trust and no community, only individual economic agents acting in self-interest. Fair enough, you might think, it’s precisely the fact that projects like Ethereum engineer confidence and provide economic incentives for contribution that may distinguish it from other services like Freenet. But it also proceeds from a perspective that already presumes a neoliberal subject and an economic mode of governance in the face of social and/or political problems. ‘How do we manage and incentivise individual competitive economic agents?’ In doing so, it not only codes for that subject, we might argue that it also reproduces that subject.
Innovations in property and infrastructure also seem to go both ways. While greater flexibility around ownership of core infrastructure is arguably a good thing, the introduction of artificial scarcity and the new controls implied by smart property also have worrying implications for Internet copyright and Digital Rights Management. Property doesn’t disappear, but instead it is enforced and exercised in different ways. If rights were previously exercised through norms, laws, markets and architectures, today they are algorithmically inscribed in the object. Going forward, it’s clear that there are a number of considerations to take into account, foremost not only how we provision the necessarily technical tools or resources for building a commons, but how we work to cultivate the necessarily kinds of social relations and subjectivity that might accompany this shift. There is real potential in the blockchain if we appreciate it not as some ultimate techno-fix but as a platform that, when combined with social and political institutions, has real possibilities for the future of organisation." (https://www.academia.edu/11627298/The_Revolution_Will_not_be_Decentralised_Blockchain-based_Technologies_and_the_Commons)
How Ethereum could support Radical Markets
""Our premise is that markets are, and for the medium term will remain, the best way of arranging a society," authors E. Glen Weyl and Eric A. Posner explain in "Radical Markets." But the dilemma facing this position is that "while our society is supposed to be organized by competitive markets, we contend the most important markets are monopolized or entirely missing, and that by creating true competitive, open, and free markets, we can dramatically reduce inequality, increase prosperity, and heal the ideological and social rifts tearing our society apart."
Buterin's own review of "Radical Markets" makes it clear that, while there are strong parallels between the book's thought experiments and the continually developing Ethereum ecosystem, the former goes far beyond notions of a "decentralized revolution" by drastically rethinking how to arrange our civilization.
By radically expanding markets themselves into previously untouched areas of our lives, Weyl and Posner postulate how to make a better world. "Even if some of these proposals ultimately prove unworkable in testing," write the authors, "we hope that the Radical spirit behind our ideas will take broader root."
A number of ideas penned by the authors could be unsettling for some, especially when it comes to concepts of property, money, and markets. However, their courage to fully embrace new possibilities and fresh insights is more than redeeming. Buterin himself agreed that "the book does go to considerable lengths to explain why each proposal improves efficiency if it could be done."
In addition to endorsing "Radical Markets" for its "multifaceted and plentiful" intersections with Ethereum, Buterin further described three of its main selling points:
There is a focus on "mechanism design to make more open, free, egalitarian and efficient systems for human cooperation."
The fact that "blockchains may well be used as a technical backbone for some of the solutions described in the book."
The technical and social challenges addressed by the book are akin to those facing the blockchain community.
ETHNews had the opportunity to speak with Weyl about his inspiration for the book, the ideas therein, and why his work draws such strong correlations to Ethereum:
"I think that Ethereum is a fabulous platform for experimenting with our ideas because of the close philosophical alignment between their desire for a decentralized, just society and the detailed design we offer for how such a society might work ... The openness and creativity of the community and the endless possibilities for experimentation generally make [the Ethereum ecosystem] a perfect place for trying out these ideas. And because Ethereum and other blockchain communities lack central, trusted authorities, they desperately need rules that can maintain their egalitarian values absent such authorities. I know of no other comprehensive system of rules that offers that possibility other than 'Radical Markets.' So, in this case, I think both sides really need each other and fit together incredibly well."
In addition to "Radical Markets" being ideologically relevant to some aspects of Ethereum, the book comes at an ideal time to directly address some of the most pressing issues currently gripping our society in the 21st century.
"The arguments of both the Right and the Left had something to offer when they originated in the nineteenth and early twentieth centuries, but today their potential is spent," Posner and Weyl write. "No longer bold reforms, they box us in." In order to truly open up and explore new social possibilities, we need radical redesigns that create new paradigms, not just fix flaws in older ones. " (https://www.ethnews.com/ethnews-exclusive-e-glen-weyl-on-radical-markets-ethereum-and-designing-a-better-society)
" the second most important development in crypto was probably the invention of Ethereum. Ethereum was founded by Vitalik Buterin. Buterin became a bitcoin programmer in 2011 (when he was 17 years old) and soon after founded Bitcoin Magazine. In 2013, he became unhappy with bitcoin’s limitations. Notably, he believed the cryptocurrency could be much more than purely a peer-to-peer payments protocol. He argued that bitcoin needed a scripting language that allowed users to trade more than just cryptocurrency. When the bitcoin community disagreed with this approach, he decided to raise capital to create his own cryptocurrency. In 2014, Buterin crowdfunded $18 million through a crowdsale on the Bitcoin network, which funded the initial development of the Ethereum network.
On July 30, 2015, Ethereum rolled out Ethereum Frontier, which was a bare bones platform that allowed users to trade Ether (Ethereum’s cryptocurrency), mine Ether, and create smart contracts through Ethereum’s Turing complete scripting language. You may have just skimmed past the last part of that sentence but its worth re-reading because the ability to create smart contracts was a HUGE development in blockchain’s history. Smart contracts make blockchain technology much more useful for end-users.
It’s hard to understand why this is so important without walking through an example so I’m going to briefly describe an example written by Blockgeeks. Imagine for a second that you want to rent an apartment from me. To do so, I’m going to send you an electronic key and we’re going to create a smart contract via the Ethereum blockchain. The contract says that you will be automatically reimbursed if the key does not arrive on time (the funds will be automatically released by the blockchain). The contract also says that you need to send me a rental agreement and valid form of identification. If the key, rental agreement and valid ID all arrive on time, then the blockchain will (i) allow the key to open the door and (ii) release the funds to me on the rental date. These previously agreed upon rules can be coded into the Ethereum blockchain, ensuring that both parties hold up their end of the bargain. While this is a somewhat obscure example, it demonstrates the if-then logic that can be incorporated into smart contracts, which reduces the need for third parties to create and enforce legal contracts. This logic can be applied to automate contracts across a wide range of industries and functions. For example, think supply chain agreements, health record management, real estate contracts, and even voting in local or national elections. "
- To find out more about how Ethereum works, visit the technical whitepaper at http://ethereum.org/ethereum.html or the FAQ at http://wiki.ethereum.org/index.php/FAQ
- Technical platform is ethereum: Whitepaper: http://ethereum.org/ethereum
- Forums: https://forum.ethereum.org
- Github: https://github.com/ethereum
- Main site: https://www.ethereum.org
- Code: https://code.ethereum.org
- Blog: http://blog.ethereum.org
- Wiki: http://wiki.ethereum.org
- see also: Smart Contracts