What Is The Difference Between Ethereum And Bitcoin?

ethereum blockchain

While the identity of Satoshi Nakamoto might be a subject of great debate, nobody is questioning the origins of Ethereum. George Gilder, in his book Life After Google: The Fall of Big Data and the Rise of the Blockchain Economy, tells the story of how Ethereum was created.

Vitalik Buterin is the founder of the Ethereum blockchain. Born in Russia in 1994, Buterin immigrated to Canada when he was six. Some sources claim that Buterin has an IQ of 257, arguably making him a genius. He learned to speak fluent Mandarin at home in just a few months. He is already considered to be one of the most remarkable teenage entrepreneurs and "is the peer of any venturer in the history of Silicon Valley," according to Gilder.

Buterin has a deep mastery of business and economic concepts. While attending the University of Waterloo, he caught the attention of Peter Thiel and the 1517 Fund. The 1517 Fund invests in high school and college-aged company founders to counteract, as they perceive, stifling conformity of colleges and universities and indoctrination of students into a particular way of seeing the world. Buterin dropped out of college and became one of the first Thiel Fellows.

Buterin was first introduced to bitcoin by his father. Several years later, he became a bitcoin evangelist, writing for a publication Bitcoin Magazine. Initially, he believed bitcoin's most significant potential was as a currency. However, during a trip to Israel in 2013, he met with entrepreneurs who were creating coins with special purposes that could be used in new markets, such as financial contracts, smart contracts, and exchanges of liquid tokens.

The trip inspired Buterin to invent a new blockchain for an unlimited range of smart contracts. While developing a new blockchain called Ethereum, Buterin also created a new programming language, called Solidity, a new currency, called ether, and a new business model for fundraising. Joe Lubin, the co-founder of Ethereum, predicted that Ethereum would be an Internet without "a single powerful entity that controls the system or controls gatekeeping into the system." Wired magazine speculated that smart contracts "could lead to the creation of autonomous corporations."

Ethereum was designed to decentralize the Internet. The platform is meant to be used for smart contracts, investment vehicles, token issues, and, as Wired had speculated, autonomous corporations. By May 2018, Ethereum's coin, ether, had a market capitalization of $60 billion. The platform has also stimulated a myriad of entrepreneurial creativity. Buterin has directed and launched more than a thousand new company projects. The total funds raised for those projects and others on Ethereum have exceeded eight billion dollars.

"In the history of enterprise there has never been anything like the launch of Ethereum," observes Gilder. At times, the value of ether has grown faster than the value of bitcoin. The difference between the bitcoin and Ethereum blockchains from Gilder's perspective is: "bitcoin focuses on security and simplicity while Ethereum focuses on capability and functionality."

Ethereum is transforming many industries. Smart contracts will likely have a massive impact on bankers, lawyers, and accountants. As Buterin remarked, "The Internet tended to displace workers doing routine work on the edge of the system; the blockchain tends to disintermediate executives in the center."

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