Last night, a company called Ethereum began selling the first batch of its cryptocurrency, called ether.
As of 10 a.m. Wednesday, investors had already bought $US2.6 million worth.
We’re living in a time when an app that just says Yo is worth $US10 million, so this shouldn’t be too surprising.
But the digital currency world has been anticipating the first ether sale for more than a year and regards Ethereum’s creator, Vitalik Buterin, as potentially the most important person in cryptocurrency since Satoshi Nakamoto.
The goal of Ethereum is to decentralize everything using blockchain technology. We talked a few months ago about what the futuristic version of this could look like. It’s similar to the internet of things, having all your machines talking to one another so that you can have driverless taxis figuring what to charge you based on how much traffic there is and how fast you need to get where you’re going.
Ethereum seeks to cut out banks, stock exchanges, and even lawyers and replace them with a blockchain, a decentralized ledger of transactions.
Individuals or companies will be able to issue “smart” shares or contracts on Ethereum’s blockchain that give a user pre-programmed rights or capabilities. Gil Luria, Wedbush Securities’ digital currency expert, told us in an email that some Ethereum applications could include exchange-less derivatives trading, “smart” escrow services, and predictions markets.
Ethereum’s ether will eventually be mined like Bitcoin, as a way for rewarding people for devoting immense amounts of computing power to making the whole system work.
“Without the requirement of payment of ether for every computational step and storage operation within the system, infinite loops or excessive storage demands could bog down ethereum and effectively destroy it,” Ethereum says on its website.
The ether sale is allowing investors to lock in supply at a known price now, with the rate set at 2,000 ether to 1 bitcoin, or $US620.
Buterin, a Canadian barely 21 years old, was talking up Bitcoin when the cryptocurrency was still wondering in the wilderness. He founded Bitcoin Magazine and published some of the most incisive pieces on what cryptocurrencies could do beyond simply serving as money. All that rumination eventually inspired Buterin to create his own, modified version.
“Ethereum has vast potential, whereas Bitcoin won’t ever do anything well beyond implementing a currency,” programmer Nick Szabo, another early Bitcoin proponent who’s recently begun tweeting after an extended absence from the internet, told us in an email several weeks ago.
Luria says there are “many more” Ethereum applications “that we have to think about.” In other words, Ethereum’s immediate use remains mostly limited.
But for those who missed out on getting in on Bitcoin early, Ethereum’s launch represents something of another chance.