Three years ago in crypto

Among those who wanted to overcome the apparent shortcomings of bitcoin was Vitalik Buterin. Having started as a student teenage reporter of bitcoin news, he had unsuccessfully proposed additional scripting possibilities for bitcoin. He had then developed a new dimension for decentralisation via the Ethereum system. After publishing a white paper in 2013 and hosting a crowd sale in 2014, Ethereum went live on the 30th of July 2015.
This open-source, distributed computing platform offered a new digital currency called Ether, but also a radically different capability. It enabled transactions with digital tokens and the use of blockchain technology as a basis for distributed software applications, also known as Dapps, such as irrefutable ‘smart contracts’ between two or more parties.
The breakthrough of Ethereum was in building a solution that extended decentralisation from virtual currencies alone to distributed transactions and exchanges of virtually any kind. It was also in building a solution that became popular with individuals and organisations alike. Making available a fully functional distributed operating system (a ‘Turing-complete’ Ethereum Virtual Machine or EVM). Ethereum also ushered in ‘tokenomics’. In this expanded universe, tokens extended the concept of value beyond that of the basic digital coin.
Tokens could now represent contractual rights, permission to access to different resources, proof of ownership, and even physical objects. Programmers could work consistently with tokens, thanks to Ethereum’s token standards. The best known of these standards was ERC20 (‘Ethereum Request for Comment’ 20), later to be at the heart of many initial coin offerings (ICOs). This was effectively the start of ‘Crypto 2.0’, the next phase of decentralisation using cryptography for autonomy and security — and the implications went far beyond just the financial industry.
Where bitcoin uses an international network of public nodes to transfer monetary value, Ethereum uses such a network to also run programs or scripts. These scripts can be written to perform just about any action that a standard computer can. They have the added feature of being recorded on an underlying blockchain, i.e. a distributed ledger of which copies are held by multiple, independent computers. In the same way that falsifying bitcoin transactions on their blockchain is practically impossible, Ethereum scripts cannot be tampered with either. Scripts perform exactly as they have been originally written. They can also automatically trigger actions like shipping goods or unlocking access to resources, after confirmation of an event such as receiving payment or authenticating a user’s identity.
This is an excerpt of Robert Küfner’s forthcoming book, “The Crypto Decade” a comprehensive review of the ten year since the release of Satoshi Nakamoto’s white paper. If you happen to be in Berlin, join us for the launch party on Thursday, September 20, 2018. Please read also:
If you found value in this article, please “clap” (up to 50 times).
This article is part of our Tokyo FinTech Publication, please follow us to read more from our writers, like hundreds of readers do every day. Should you live in Tokyo, or just pass through, please also join our Tokyo FinTech Meetup.

