Vitalik Buterin and the rise of his creation: Ethereum
Who is Vitalik Buterin?
Vitalik Buterin is a Russian-Canadian writer and programmer. Vitalik has been involved in the Bitcoin community since 2011, co-founding and writing articles for Bitcoin magazine. But he is primarily known as the whiz kid behind Ethereum, the second most valued and recognized cryptocurrency platform in the world after Bitcoin. Currently, his visionary project has a huge market cap of over $26 billion and stands as the second-largest cryptocurrency within the market. Meanwhile, Vitalik is only 27 years old and has far-reaching plans for his creation.
Vitalik was born on January 31, 1994, in Kolomna, Moscow province, Russia. He lived in Russia until he was six years old when his parents decided to emigrate to Canada in search of better job opportunities.
In third grade at a Canadian elementary school, he was placed in a gifted program. And, although getting a place in this program meant more learning opportunities, he was abruptly separated from his friends. While in the program, Vitalik quickly realized that his particular skills and talents made him somewhat an outsider to his peers and even his teachers. He was naturally predisposed to math and programming, possessed an early and strong interest in economics, and could add three-digit numbers in his head twice as fast as an average human being his age.
The origins of Ethereum
At the end of 2013, Vitalik Buterin described his idea in a White Paper, which he sent to some of his friends, who sent it further. As a result, about 30 people contacted Vitalik to discuss the concept. He was expecting criticism and pointing out critical errors in the idea, but no such thing ever happened.
Even then, the concept of Ethereum had a lot to do with the currency. Over time, the idea changed and formed during meetings and discussions with people who were totally on board with the idea. Once they understood the programming language, they came up with new ways to use it every week. By the end of January 2014, the team had realized that it was relatively easy to create decentralized file storage, and concepts like name registration could be made a reality with just a couple of lines of code. As those use cases piled up, they gradually changed Vitalik's idea and molded it into what Ethereum is today.
The project was publicly announced in January 2014, with the core team consisting of Vitalik Buterin, Mihai Alise, Anthony Di Iorio, Charles Hoskinson, Joe Lubin, and Gavin Wood. Buterin also presented Ethereum on stage at a Bitcoin conference in Miami. A few months later, the team decided to hold a wholesale sale of Ether, the network's native token, to fund development. Around the same time, Vitalik himself received the Thiel Fellowship grant for $100,000.
Through the crowd sale, during which Ether was sold for Bitcoins, the team raised more than 31,000 BTC from the cryptocurrency community, which amounted to about $18 million at the time. However, at the time of collection, a Bitcoin was trading around $650, but soon after, its price plummeted, and the team faced a loss of millions of dollars. However, with the money raised, the Ethereum team established the Ethereum Foundation, a non-profit organization based in Switzerland, which was tasked with overseeing the development of Ethereum's open-source software.
Despite some difficulties, Ethereum's crowdfunding campaign came across as one of the most successful for the time and garnered coverage of the platform in many major financial publications, including The Wall Street Journal.
Prior to the network's official launch, the Foundation developed and tested several codenamed prototypes of the Ethereum platform. A version called "Olympic" was the last of those prototypes and a pre-release of the public beta. Many early users were looking for bugs in the system, as the Ethereum team decided to introduce a "bug bounty" of 25,000 Ether for stress testing the network.
In 2014 Vitalik Buterin, a Russian Canadian programmer of only 20 years old, together with Gavin Wood, an English systems engineer, introduced the world to Ethereum, a new decentralized and open-source Blockchain with functionalities to make smart contracts. They decided to call their native currency Ether, which today is the second most popular cryptocurrency. On July 30, 2015, the first publicly available version of Ethereum called "Frontier" was released.
Ethereum has its community of developers and its programming language, allowing anyone who learns it to develop distributed applications and contribute to its evolution. Ether, unlike Bitcoin, is not just "digital gold" or just another currency but is considered by many as "programmable money," and that's where all its potential comes from.
Ethereum is like a global decentralized computer that can now be used in a distributed form of any financial product (loans, derivatives, bonds, insurance). Not only can people transfer money to each other on this Blockchain, but they can do so by following certain rules and protocols that cover that money, for example, the fulfillment of a contract. This can even be a modern version of trust, decentralized and "monitored" by all those Blockchain nodes.
The impact of Ethereum in 2021
Bitcoin is getting all the media attention today, but what most people aren't seeing is that Ethereum is growing its daily trading volume and has recently approached the $30 billion a day trading level, surpassing Bitcoin by a few weeks.
To get an idea of the magnitude, Paypal does $2.5 billion in transactions a day. This idea of "programmable money" is so powerful that it's attracting a lot of institutional attention, with big business personalities like Raoul Pal claiming that every investor he knows is switching from Bitcoin to Ethereum because it's more versatile than just holding digital gold.
Looking at shorter time horizons is pointless, and volatility can make us lose everything. Experts say that the price of Ether is going to reach USD 10,000 easily and that this valley we are going through is a correction that probably represents the last chance to buy Ether at a low price.
Ethereum is budgeted to have 120 million Ethers in circulation and reduce this reserve by "burning ETH every so often" so that the coin will gain value over time, based on the concept of scarcity. That is one of the premises experts base their assertion that its value will reach USD 10,000. Ethereum is a constantly evolving community fed by its community of developers, so its potential is infinitely greater than Bitcoin.
The ether cryptocurrency has a market capitalization of US$376 billion, second only to bitcoin's US$1.8 trillion. The value of ether has increased since the beginning of the year, largely due to the growing popularity of decentralized finance applications (DeFi) that aim to replace traditional financial intermediaries such as banks and insurance companies. According to data aggregator DeFi Pulse, more than US$72 billion is now locked up in DeFi protocols, many of which are built on the Ethereum blockchain.
However, Ethereum faces stiff competition from Binance Smart Chain (BSC), the blockchain infrastructure developed by the world's largest cryptocurrency exchange platform, which has been processing an average of more than 8 million transactions per day since the end of April (Ethereum just finished 1 million). Other prominent blockchains include Algorand, Cardano, Polkadot and Solana.