How Ethereum Came To Be And It Started With Excel

Do you recognize this guy?

I didn't when I first saw the photo, but I am familiar with the name...

Vitalik Buterin

The mastermind behind Ethereum.

Today's issue of the Financial Post has a great write up on Vitalik, Ethereum and the events and people surrounding the start of Ethereum in November 2013. That is when Vitalik wrote his Ethereum white paper.

Some excerpts from the article that I found interesting and informative:

"A small group gathered at Pauper’s Pub in Toronto’s Annex neighbourhood on a Saturday afternoon in November 2012 to talk about Bitcoin...One pale and gangly attendee said no thank you to the beer, pub food and most social interaction. His name was Vitalik Buterin and he was a first-year student at the University of Waterloo in southwestern Ontario..."

Vitalik was just 19 at this time. His white paper was published a year later!

"A few months after that gathering in Toronto, he dropped out of university to travel the world and write..."

Dropped out of college?? Who would've guessed?? #sarcasm

"Bitcoin had made it possible to send money around the world with no fees, banks or governments required; he had come up with a way to apply that idea to everything else and usher in Web 3.0, the looming decentralized version of the Internet, the possibilities of which are limitless."

A couple of paragraphs later...

"Buterin proposed building a new blockchain-based system called Ethereum with a programming model developers would find familiar, easy to understand and facilitated by a coding language capable of theoretically solving any computational problem. Ethereum had the potential to eliminate the need to trust a single company, person or government to keep massive amounts of money and data safe and secure."

Imagination, creativity, vision, technical skill...quite a combo!

" His parents moved to Toronto from Moscow in 1999, just before his sixth birthday. By then, Buterin had already taken to computers, playing with Excel on an old PC at the age of four."

There's your Excel connection.

"Years later when Buterin told his father he was thinking about dropping out of university to travel the world and learn about Bitcoin, Dmitry says he was all for it. “’I told him, ‘You know what? If you stay, you will have a very nice, guaranteed job at Apple, Google, whatever. You’ll make $100,000, probably more,” Dmitry says. “’If you drop out, it will be different, more challenging in life. But you will learn so much more than you learn in university. It’s fine if you do that.’"

Well said, Mr. Buterin, well said.

The article continues on with the period during and after the release of the Ethereum white paper. Several people other than just Vitalik were Ethereum founders and what they all envisioned it to be was not unanimous.

"They had long, agonizing debates about whether Ethereum should be modelled after Google, a giant for-profit corporation, or Mozilla, the not-for-profit foundation that makes the open-source Firefox browser."

This and other problems intensified to the point:

"To sort out their differences, the team met in person at a rented house in Zug, Switzerland...Buterin’s conviction that Ethereum should be run as a non-profit won out, shattering the dreams of some of the more business-minded co-founders."

Then Vitalik had to grow up quickly.

"After getting his way in Zug, he discovered the fate of the project rested on his shoulders. “I realized I was the one who had the ability to make a decision,” he says. “I really felt like, ‘Oh my God, a lot of this is actually on me.’”

During the first half of 2014 there were plenty of challenges for Vitalik and the remaining founders, especially money. The group was going into debt to pay for lawyers and other overhead, but they did not want to bring in outside investors.

Then, the masterstroke happened.

"Ethereum’s legal team was finally confident it had found a way to avoid regulatory problems. Instead of selling equity or debt, Ethereum offered a product: Ether, the Bitcoin-like cryptocurrency built into the platform. In order to avoid overloading the system and incent developers to write efficient code, all transactions and applications built on Ethereum require ether to run."

Issuing Ether allowed the group to stay out of regulatory crosshairs and give developers an incentive to make Ethereum useful and sustainable for all.

The crowdsale of Ethereum commenced with every 2,000 Ether available for 1 bitcoin. After 42 days, the group raised 31,000 bitcoins or $18 million. The market value of Ether is now in excess of $200 million.

It hasn't been all smooth sailing since the crowdsale, of course.

"it has yet to change the world. There are few Ethereum-based applications that an average person who doesn’t know how to code would find useful. The experiments being conducted by major companies and banks have mostly been restricted to tests and proofs of concept. More technological breakthroughs are needed to allow Ethereum to handle the volume of data processed daily by today’s centralized Internet juggernauts."

Still, the college drop out remains positive.

"Within five years, he thinks Ethereum will have launched some major applications that will be useful to large groups of people, bringing us closer to the crypto-enthusiast’s dream of “decentralizing all the things.”

Keep it, Vitalik!