Introducing The Creator of Ethereum

Vitalik Buterin is the young, enigmatic creator of Ethereum, the open-source operating system that is changing everything. By all accounts, Buterin embodies the ideal of the wunderkind; having succeeded as both as an intellectual and an entrepreneurial prodigy all before the age of 25.

“When I came up with Ethereum, my first first thought was, okay this thing is too good to be true and I’m going to have five professional cryptographers raining down on me and telling me how stupid I am for not seeing a bunch of very obvious flaws. Two weeks later I was extremely surprised that none of that happened. As it turned out, the core Ethereum idea was good, fundamentally, completely, sound.”

-Buterin

Buterin is a Russian-Canadian programmer and writer who took a strong interest in Bitcoin and cryptocurrency in 2011. He soon after co-founded Bitcoin Magazine and has steadily become a household name in the crypto-world, with good reason.

The introduction of Ethereum

In November 2013, at the age of 19, he wrote and released his White Paper for Ethereum. Since then Buterin’s vision is evident in a multitude of game-changing ways; from cryptocurrency and gaming to new forms of data storage. At the time of this article, Ethereum was holding steady at the #2 cryptocurrency on Coinmarketcap with a price of $269.63 and current market cap of over $28 billion.

Ethereum has combined blockchain with its bespoke system of smart-contracts. The essence of Ethereum’s decentralized platform is a worldwide computer that can help users develop any kind of decentralized application. Programs on Ethereum run using its cryptocurrency Ether. Ether provides the “gas” to run programs. Also, it now trades like other cryptocurrencies are.

Vitalik today

Presently Buterin is the leader of Ethereum’s research team which continues to work on the future of Ethereum protocols.

It is clear that Buterin was immediately captivated by Bitcoin’s ingenious application of blockchain and cryptocurrency. But more than that, Buterin reviled the pernicious power structures that contribute to inequality and exploitation. He, therefore, imagined decentralized systems as a solution to the problem.

“I saw everything to do with either government regulation or corporate control as just being plain evil. And I assumed that people in those institutions were kind of like Mr. Burns, sitting behind their desks saying, ‘Excellent. How can I screw a thousand people over this time.” 

Buterin

Who is Vitalik Buterin?

At 25-years-old Vitalik Buterin, is the recipient of several prestigious awards, including a Thiel Fellowship Awards and the World Technology Award in the IT Software Category from 2014. He has also made the list for both Fortune’s 40 under 40 and Forbes 30 under 30. Buterin was an overnight success, which may strike some as too good to be true. But his meteoric rise is simply further evidence of his incredible achievements.

With his preternatural mathematical acumen, his fascination with Bitcoin’s decentralized currency, and his frustration with the status quo, Buterin conceptualized Ethereum. And to even his own surprise, its vision was flawless.

Early Life

Buterin was born on January 31, 1994, in the town of Kolomna, Moscow Oblast, Russia. His family relocated to Canada shortly thereafter, where at grade three he was promptly placed in a gifted program. Buterin showed an early talent for numbers and a keen interest in computer programming and economics.

Growing up in Toronto, he attended Aberald High School. Buterin’s years at Aberald were ostensibly some of his most productive years. At his school, he was given the opportunity to pursue his interests freely. As a result, his desire to learn and create was solidified at Aberald.

Buterin had an unusual episode of misfortune. This experience proved to be his primary source of inspiration that would one day morph into the conceptualization of Ethereum. Buterin states:

“I happily played World of Warcraft during 2007-2010, but one day Blizzard removed the damage component from my beloved warlock’s Siphon Life spell. So I cried myself to sleep, and on that day I realized what horrors centralized services can bring. I soon decided to quit.”

The Rebeillion

While his father worked on running a software startup, Buterin came upon Bitcoin in 2011, which offered him a renewed purpose in life. Afterwards, Buterin became interested in Bitcoin and learned that its program worked without a physical backing. It was the decentralized blockchain that struck him as being ingenious, and essential in order to shed the yoke of centralized servers. Pursuing his interests, shortly after, Buterin co-founded Bitcoin Magazine with Mihai Alisie.

By 2012 Buterin was enrolled at the University of Waterloo where he briefly studied computer programming. It was by way of his blog posts that Buterin connected with his future business partner, Mihai Alisie. In 2011, the two co-founded Bitcoin Magazine. While at the University, Vitalik also worked part-time as a research assistant for the cryptographer, Ian Goldberg.

With the help of David Wagner, Goldberg is famed for his discovery of a flaw in the random number generator. Random number generators are used for temporary key generation in the SSL implementation of Netscape Navigator. Goldberg is also the co-author of the Off-the-Record instant messaging encryption protocol.

University Drop-Out

In 2013, Vitalik Buterin left university to pursue crypto-related projects full-time, as this was what really held his interest. Buterin became better informed in the ongoing crypto-projects of the time and determined that they were all too narrowly focused. Instead, what Buterin believed was necessary was a far more general framework that could host more and varied applications. With this in mind, Buterin created Ethereum; the public database that operates with a trustless framework that other programmers can use to build applications upon.  

After diving into the world of crypto, Buterin met other like-minded people in 2013 in San Jose, California. In October of that same year, he traveled to Isreal and met with the minds behind CovertCoins and MasterCoin.

Later that same year the young Vitalik Buterin wrote his white paper for what would become the Ethereum network. By the end of January 2014, the team had realized the relative simplicity in creating decentralized file storage with simple code. Therefore, the project was publically announced that year. The main team included Mihai Alisie, Anthony Di Iorio, Charles Hoskinson, Joe Lubin, and Gavin Wood.

Creating Ethereum

Despite Vitalik Buterin’s rather uninspiring epiphany, the result of his natural gifts and growing indignation for corporate greed and useless government regulations produced Ethereum; a system which is nothing short of awe-inspiring. Buterin’s motivation to eliminate top heavy and entrenched malicious powers have inspired his projects to reach new levels.

The like-minded Jeff Scott Ward joined Consensys in 2014. Ward was duly disgusted by the decay of the American and traditional financial system at large, as are many others involved in the crypto-world. That year, Ward worked for the New York Stock Exchange and saw first hand the complicity and greed that caused the housing crisis of 2008 and the subsequent recession.

It was with a supportive team and a grant from the Thiel Fellowship that Buterin was able to present Ethereum to the world at a Bitcoin conference in Miami that same year. Just a few months later, the Ethereum team hosted a crowd-sale for Ether, Ethereum’s native token.

The crowd-sale sold Ether for Bitcoin, and raised over 31,000 BTC. At the time this was valued at around $18 million. The crowd-sale took place between July and August 2014. On July 30, 2015, the system was live. From the onset, 72 million coins were pre-mined, which accounts for nearly 68% of the total circulating supply as of now. To date, this is the most successful example of crowdfunding.

Unfortunately, they suffered a minor set back, as shortly thereafter, Bitcoin suffered a massive drop and the Etherum project lost millions in funding. Despite the hardship, the team was able to successfully found the Ethereum Foundation, a non-profit organization now based in Switzerland.

What is Ethereum

As mentioned, Ethereum is an open-source, public, blockchain-based distributed computing platform and operating system. It features a smart-contract functionality. Inspired by Bitcoin’s trustless, peer-to-peer model, Ethereum has modified Satoshi Nakamoto’s original vision and application in several ways. But like Bitcoin, Ethereum runs on a globally distributed network. The currency Ether is traded and used in a similar way to that of Bitcoin.

The Ethereum network consists of several thousands of nodes all running the Ethereum blockchain. Using the blockchain, people exchange the native token, Ether. Ethereum’s platform allows people to write smart contracts  to add to the network. The programs on Ethereum’s blockchain are possible with the use of Ether as payment or “gas” to run the blockchain.

Features that set apart Ethereum from Bitcoin

There are several defining features that separate Ethereum from Bitcoin. To begin, Ethereum is primarily an open-source not-for-profit system that is designed to host other applications. The platform runs on Ether, its native token, commonly referred to as the “gas” that runs its programs. Ether is now a traded cryptocurrency, second only to Bitcoin’s market value. Ether is also compensation for the participating mining nodes, which are necessary for the programs to run.

Central to the success of Ethereum is the automated smart-contracts; they are the bread and butter of the platform. Using simple code, smart-contracts provide a way to program transactions of all kinds of data. Smart-contracts only execute if and when all of the criteria of the contract are met. This is possible using straightforward semantics and logic. Thus they provide a trustless peer-to-peer system. Unlike Bitcoin’s script, Ethereum is Turing-complete, which means it continuously runs applications and smart-contracts on the platform.

Since its creation, Ethereum has seen several versions:

VersionCode NameRelease Date
0 OlympicMay, 2015
1 Frontier30 July 2015
2 Homestead14 March 2016
3 Metropolis (vByzantium)16 October 2017
3.5 Metropolis (vConstantinople)28 February 2019
4 Serenity TBA

V. B. On Bitcoin

Bitcoin’s design was indeed the inspiration for what became Vitalik Buterin’s own vision of the truly decentralized blockchain platform, Ethereum. According to Buterin, Bitcoin posed several issues that Buterin felt inspired to tackle. To begin with, Buterin needed money in order to participate in Bitcoin’s experimental economy. Eventually, he found someone willing to pay him in 5 Bitcoins for every post he contributed to a blog.

One of the disadvantages of Satoshi’s Bitcoin is the intentionally simplistic program script, or language, that it applies. The design intentionally limits the complexity of transactions on the blockchain and demands that all transactions act in accordance with the original consensus mechanisms. The simplicity is primarily to maintain security. For those that are better versed in computer programming and operation codes, Bitcoin uses a simple forth-like, stack-based, Turning In-complete language. However, the result is that there are strict limitations as to what programs can be layered on top of Bitcoin.

Buterin’s take on blockchain layering

Buterin describes his experiments with Bitcoin blockchain layering in the following way:


“I discovered that they were doing this sort of swiss army knife approach of supporting 15 different features and doing it in a very limited way…”

This lead to Buterin creating a Turning-complete model of Bitcoin. The idea was to create a digital space that you can build social media platforms on, new stock markets, or run digital corporations outside of any kind of restriction or jurisdiction. Ethereum’s design aims to perfectly blend software, data, and financial assets.

Buterin describes the difference he sees between Bitcoin and Ethereum:

“[Bitcoin is] just too limited functionality. So like, think of the difference between something like a pocket calculator and a smartphone, where a pocket calculator does one thing and it does one thing well, but really people want to do all these other things. And if you have a smartphone then on the smartphone you have a pocket calculator as an app. You have playing music as an app. You have a web browser as an app and pretty much everything else. So basically taking that same kind of idea of increasing the power of the system by making it more general purpose and applying it to blockchains.

The DAO and the Infamous hardfork

Ethereum’s design is for others to build decentralized applications and run Decentralized Autonomous Organizations or DAOs. Each DAO has its own purpose and consensus rules that deal in digital assets. The rules for the DAO are built into the smart-contract protocol, which is designed by individual organizations.

To start funding similar tech projects, many rely on crowdsourcing or crowdfunding. Investors purchase the native token of the company, and in return get a stake in the company and/or a new cryptocurrency (depending on the project). Users of the DAO are then able to participate in the project’s decision making and how funds are spent. Those who hold more tokens often have a larger stake in decision making. Tokens are not necessarily the same as shareholdings but do give owners the option to participate in the policies of the organization.

Ethereum’s success lies in the functionality of the DAOs it has enabled. The DAO models Bitcoin’s decentralized autonomous organization. “The DAO” is the name of a particular DAO, which a German startup Slock.it conceived of and programmed. Slock.it built “smart locks” for shared economy projects, that facilitated sharing personal items like cars, boats, apartments. It is essentially a decentralized version of Airbnb.

The DAO Crowdsale

On 30th April 2016, The DAO launched with a 28-day funding window. The DAO raised over $100 million by 15th May. At the end of the funding period, The DAO was the largest example of crowdfunding in history. All told, it raised over $150 million from more than 11,000 members initial investors.
But in June of 2016, Ethereum suffered a theft valued at $50 million worth of Ether. This theft was the result of a flaw in the DAO project’s smart contract software.

The Classic Attack

The attack resulted in a hard-fork of the Ethereum blockchain; this means that it was split into two separate blockchains. There are now two separate versions of Ethereum: Ethereum (ETH) with the theft reversed, and the original Ethereum Classic (ETC).

Moving large sums of money will make smart-contracts susceptible to attacks. After a wildly successful DAO, while Ethereuem’s programmers were attempting to manage their smart-contracts an attacker started to drain The DAO. 3.6 million of Ether drained into a “child DAO.” This was possible because the attacker recreated an identical structure of the original Ethereum DAO.

What happened to the funds?

Directly after the surprising success of the campaign, all the Ether funding went to one digital wallet. Some believe that the attacker stopped voluntarily upon the fork proposal. This was necessary, as the Ethereum team could not work fast enough to form a new fork to move the funds to.

Cryptocurrency forks are common in the crypto-world All it means is that a new blockchain is derived from the original blockchain. Democratic principles shape decentralized organizations. Therefore, intervention from the original creators is frowned upon, as decisions are meant to be made democratically by all token holders and in accordance with the consensus rules.

Instead of rolling back the system and refunding investors with a “soft-fork” Ethereum chose the “hard fork” option. A hard fork basically means creating an entirely new version and blockchain of Ethereum. A super majority of 89% of Ether holders voted in the hard fork proposal on July 20, 2016.

The hard fork also meant the birth of Ethereum Classic (ETC), which is a separate blockchain and currency from ETH.

Ethereum and Buterin on the World Stage

Vitalik Buterin and Ethereum’s platform is also changing the way that public projects and governments operate within bureaucratic and research projects. Here is a brief look at some of the Ethereum-based projects in China, Russia, Canada, and South Korea.

China

Not only was Buterin able to learn Chinese in only a few short months, but Ethereum has even caught the attention of the Chinese government and private industries alike. Many businesses throughout China have implemented Ethereum’s blockchain technology and platform. Buterin has also become a General Partner with Fenbushi Venture Capital. It is the first and the largest capital firm in China to invest exclusively in blockchain based companies.

Moreover, China’s Peking University has created an Ethereum Laboratory. There they research protocol improvements and application, primarily focused on achievements for Chinese supply chains and energy markets. The Royal Chinese Mint is also experimenting with Ethereum’s ERC20 token standard and smart contracts with efforts focused on the digitalization of the Chinese Yuan.

Russia

Even Buterin’s homeland of Russia has opened its doors to some of the tenents of a digital economy using Ethereum’s blockchain. In October 2017, one of Russia’s largest banks, Sberbank, announced that it had joined the Enterprise Ethereum Alliance. Sberbank began testing with smart letters of credit and of guarantees.

Ethereum Russia, a separate entity, facilitates blockchain research and provides education, hosts events and reviews the architecture for a Russian state-owned development bank Vneshtorgbank. The bank now finances the development of the center for Blockchain research at the National University of Science and Technology (MISIS). This research focuses on developing solutions to government services and the collaboration of both the public and private sectors.

Canada

The Canadian government-funded research program Industrial Research Assistance Program (IRAP) is now hosting its own blockchain explorer. The IRAP initiative will test the use of public blockchains in managing government grants. The program will allow users to perform searches for new grant data on the Ethereum (ETH) blockchain.

The National Research Council and IRAP first hosted a blockchain kickoff session in June 2017. Since 2018, IRAP has successfully launched the Canadian government’s live trial of public blockchain technology on Ethereum’s ledger. The platform enables the transparent administration of government contracts.

South Korea

The South Korean Ministry of Science and ICT is running blockchain studies using Ethereum, the “Blockchain Regulation Improvement Study Group.” The study aims to learn how blockchain technology regulations can be improved with widespread applications.

Initially, the project focused on improving legal regulations pertaining to blockchain technology like personal privacy, smart contracts, electronic documents, and digital signatures. South Korea’s capital
Seoul also plans to add blockchain technology to its citizen cards in an effort to improve the existing implementations of e-citizenship.

What’s Next from the Wunderkind

Currently, Buterin lives in Zug, Switzerland, where he continues to work on Ethereum protocols. Buterin’s focus is currently on managing the challenges and productivity of proof-of-work v. proof-of-stake:

“Recently, I am spending a lot of time working on the proof-of-stake and sharding protocols. This is what the Ethereum research community is focusing on more than anything else at this point. We think that proof-of-stake and scaling are both really important and there has been a lot of progress on improving the algorithms and the development of multiple limitations over the last couple of months, Buterin told me. I’ve also been looking at the economic analysis of transaction fees and how transaction fee algorithms can be improved to basically cut fees down and make the protocol alignment centers better and more efficient. Those are the main things I’ve been working on myself.” –Buterin

Presently, a primary focus of Buterin’s is on solidifying the functionality of Ethereum 2.0. In this version, the team has moved away from the old Casper and Sharding designs. But only time will tell what Buterin has in store for Ethereum and the future of decentralized applications. As Buterin’s star continues to rise, he is certainly one worth keeping an eye on. If Buterin has been able to accomplish this much in less than a decade, there is no telling what he will do next.

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