Cryptocurrency and Blockchain Technology

More and more people attach importance to encrypted data transfer and attentive observers will notice that a change is taking place in the network infrastructures that seems to follow the so-called sentence of David A. Johnston: Everything that can be decentralized is decentralized (Johnston’s Law). More and more social sub-units are being created according to this pattern, more and more new companies are developing on the basis of blockchain technology.

The Ethereum project plays a key role. Ethereum is a platform that has many centers and on which applications and data are distributed over an encrypted peer-to-peer network based on the cryptographic currency Bitcoin. It is an open source project.

Vision

The idea was launched in 2013 by Vitalik Buterin, a Russian then living in Canada, who wants to use the Blockchain technology not only for financial transactions but also for other areas of society. Buterin was in the community of world-of-warcraft players, programming since he was four years old. World of Warcraft (WoW) is a computer game developed by the American game developer Blizzard Entertainment and belongs to the genre of MMORPGs, which lives in particular from the real-time networking of players. As Buterin’s interest in the idea of blockchain technology, on which the crypto currency Bitcoion is based, grew stronger and stronger, he discontinued his studies and decided to call his concept “Ethereum”. The name Ethereum has something to do with the term ether and represents the vision of a perfect blockchain – a blockchain for the world.

Goal

It was the computer scientist Gavin Wood who formulated the first formal specification of a blockchain-based protocol for Ethereum in a yellow paper in 2014. Click here to get a CryptoSuite Live Demo example or link here.

Ethereum was launched in July 2015. As a result, Buterin and her team used crowdfunding to raise $18 million in four weeks.

How? 60 million units of the “Ether” crypto currency belonging to the project were sold. The people around Buterin landed the biggest crowdfunding action in history so far. Then it was rapid. In February 2016, the crypto currency Ether used in Ethereum had a market capitalization of over 500 million US dollars (coinmarket).

Distributed Apps

The decisive moment for a new economy is for the founders of Etherum the fact that the Blockchain should not only be used for the financial transaction alone, but for every kind of value. Whether it is coins, cars, houses, diamonds, art or shares. The idea behind this is a decentralized directory for all assets with the secure possibility of transferring these values.

The vision was: If the idea could be realized technically and Ethereum established as a basic platform on which other blockchain services are based, any kind of bureaucracy would have to change: Land registry, notaries and authorities. The software developers around Ethereum concentrated on the programming of self-executing contracts. Etherum is not just a pure crypto currency, but also – or above all – a platform for Dapps (Distributed Apps), which consist of so-called “Smart Contracts”. Smart Contracts are automated and self-executing contracts that are automatically processed and controlled by Blockchain.

Next Step often the Vision

Here, too, the underlying vision becomes apparent: one day there will be companies that belong to themselves, which are completely managed by computer programs, which conduct their business on the basis of Smart Contracts self-executing in digital contracts. Imagine that your daily newspaper becomes readable as soon as the daily payment has arrived. Or you are thinking of complex bonds that are used in the financial sector to dismember and resell loans. While Bitcoin is limited to financial transactions, Ethereum should be able to carry out all kinds of transactions. They only need to be translated into program code, such as e-voting, crowdfunding, identity management and virtual organizations.

All in all, Ethereum stands for the vision of handing over capitalism to machines and completely automating the economy. This idea can be found in a book by US software developer, systems consultant and writer Daniel Suarez entitled “DARKNET”. Darknet is the social utopia that represents an alternative to a dystopian developing world through decentralized production and sustainable energy production. This novel follows the tradition of cyberpunk novels in which societies are portrayed that are shaped by a weak nation-state but ruling private corporations.

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