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Profile: Vitalik Buterin

The creator of the Ethereum block-platform and the second most popular crypto currency, cooperating with authorities and companies.

Vitalik Buterin. Photos from Ethereum's personal archive
Vitalik Buterin. Photos from Ethereum’s personal archive

On June 25, the Ethereum platform airspace crypto currency value fell for a short time, rose back, and then began to fall again. Since the unusual behavior of the course was the result of false information about the death of the creator of the crypto currency Vitalik Buterin.

Over the past few years, the 23-year-old programmer has directed the searchlight of the block-industry industry, creating, as many believe, a revolutionary platform. Having survived the “ideological war”, Buterin and his team made one of the leading crypto-currencies from the etherium by 2017, for which the “miners” buy video cards, and from Ethereum – an ambitious blockade site that, with the support of governments and companies of different countries, can be a step towards New economic era, where the Internet will be at the head.

Origin of the idea

Vitalik Buterin was 19 years old when he formulated the concept of Ethereum. He was born in 1994 in the city of Kolomna, and in six years he moved with his parents to Canada. Since childhood, fascinated by mathematics and computer technology, from 2007 to 2010 he spent a lot of time in the MMORPG World of Warcraft. Like a million other people, the game took a lot of time from the programmer, but when the publisher of Blizzard changed the damage level of the “Pulling Life” spell from one of Butcher’s favorite heroes, he dropped the game.

The programmer was looking for new entertainment, and in 2011 found one in bitcoin. First, the crypto currency seemed to him an insignificant project, but a few weeks later he got a job at his first job – the Bitcoin Weekly site, where he wrote articles about the crypto currency. For an hour, he received about $ 1.5, and a little later founded the publication Bitcoin Magazine .

He managed to enter the University of Waterloo, but he spent more and more time on crypto projects. In 2013 he worked on them up to 30 hours a week, lost interest in studies and dropped out of the university. And at the end of the year, the bitcoin course took off on a large scale , capturing the attention of the IT industry.

On this wave, Buterin went to travel the world, attending various conferences on bitcoin and helping various open source projects. In 2014, he won the World Technology Awards, bypassing Mark Zuckerberg. And later received a grant for 100 thousand dollars from the fund of the founder of PayPal Peter Till. With this money, he planned to create a project, the idea of ​​which he formulated for several years.

Creating Ethereum

Buterin liked bitcoin, but the crypto currency, according to the programmer, had too limited functionality. It was not a developed system, but only an unusual way of transactions. The programmer also saw in the crypto-currencies and the technology of the blockade, on which bitcoin works, there is much more potential.

Blocking is a technology of data storage, where any information is recorded, as it were, “closes” on the previously created data block. You can not change at least part of the data, otherwise it will lead to an error in the entire branch of the block. To ensure that the block system and the crypto-currencies based on it work, decentralization is needed – that is why the data blocks are stored in different places, for example, for miners. This is required to ensure that the attacker can not change all copies of the blockage at a time.

So the technology of blockage is arranged. The most understandable principle of its operation is described on the example of a notebook for debt receipts. With the help of a blockbuster, you can always find out the true owner or sender of money, since the entire transaction and forwarding chain is stored in blocks. In theory (and somewhere already in practice), this system simplifies state and private registries, notary functions, cadastral disputes and other things related to the transfer of money. Simply put, technology greatly simplifies the bureaucratic system.

Block work schedule. Click to enlarge image
Block work schedule. Click to enlarge image

By 2017, the value of the blockade has been described many times, but at the end of 2014 much less people knew about this potential. Among them was Buterin. His idea was to create a platform, in fact, a new branch of social networks that would store and protect market data of companies, banks and infrastructure facilities, working on a decentralized system, and with a ” smart contract » (Smart contracts). She was responsible for simplifying remittances and any transactions involving money.

It was necessary to tell the world about the platform and to achieve that the number of operations on it grew. It took time. Some immediately understood the idea and believed in it. But there were those who called us crooks, and the project – unrealistic, because they believed that it was technologically impossible to implement it.

Vitalik Buterin, co-founder of the Ethereum block-platform

Buterin described the concept of Ethereum to friends, after which new participants were involved in the development, and the project was made public. The programmer noted that the most difficult stage of the work was the creation of a block system from scratch, the possible holes of which had to be regularly checked and closed. This took the team much more time than Buterin and the three co-founders of Ethereum planned: Mihai Alisie, Anthony Di Iorio and Charles Hoskinson.

In early 2014, the team founded Ethereum Switzerland GmbH in Switzerland. Buterin explained : the authors of the project decided to open a head office in Switzerland, because there are many banks and financial institutions that technology may be interested in, plus liberal laws in relation to crypto-currencies.

Buterin (left) with Ethereum team members. Photos of Mihai Alize
Buterin (left) with Ethereum team members. Photos of Mihai Alize
The idea of ​​the Internet platform, built on the technology of blocking and smart contracts, which almost completely excludes the human factor and accelerates the monetary processes, attracted much attention. In the summer of 2014, the team of Buterina and their project Ethereum gathered more than 31 thousand bitcoins on croweding. In exchange, users received 60,000 ether tokens (Ethereum crypto currency), something like shares that do not give the right to manage. Exchanging bitcoins, Buterin rescued $ 18 million, which he invested in the development of the protocol. In July 2015 the platform was launched.

The team limited the capabilities of the ether (Ethereum unit) so that it could be exchanged for only bitcoins or vice versa. Other crypto-currencies were not used. In addition, the functions of the platform added the ability to create your own program or crypto currency. The benefit was that the authors of the new crypto currency can use the functions of Ethereum, including Smart Contracts.

Ideological war

In less than a year, in the spring of 2016 Ethereum was rapidly gaining popularity among both private companies and start-ups. The platform was still considered a field for risky experiments. One of them was The DAO, a blocking project using the Butcher system.

April 30, the authors of the decentralized development announced the collection of funds for the launch of the service. In the technological media, the project was described as “an ambitious economic organization that offers full transparency, unprecedented flexibility and autonomous management with the use of a detachment.” By May 21, the project received 154 million dollars and more than 12 million airs ($ 50 million at the time of the course).

To guide the platform, which expected to collect only $ 5 million, this crowdaming campaign has become a significant success. Block-protection Ethereum seemed reliable to authors, and from day to day they were going to invest money in the development.

However, the situation got out of control. Unknown hacker found in the source code of The DAO loophole, through which he managed to deflate 12 million ether from the startup account. About six hours, the authors of the project tried to block the hole in the system: they could not enter their profile, the site constantly fell-up. Only the protection system Ethereum saved the company from a momentary collapse: it is possible to withdraw the crypto currency only after a specific period of time – just over a month.

The creators of The DAO had 34 days to figure out how to return money to real owners.

Reputation The DAO and Ethereum found themselves in a difficult situation. The decentralized system, which was considered so secure, allowed an attacker to steal a huge amount, but no one knew how to recover it. In the meantime, the authors tried to come up with a solution, the rate of the etherium fell rapidly: for a couple of days the price dropped from 22 to 12 dollars.

Blokchan – a very new technology, its capabilities are not fully understood, so when programmers tried to track the hacker’s data on transactions, it was almost impossible. The authors managed to find only the long and encrypted address of the attacker, and only from it had to be repelled.

The DAO leadership attracted to the FBI investigation in New York and Boston, but the intelligence services failed to find an intruder. The members of the Ethereum community searched the hacker, but they also failed to track down the thief. The only assumption about the hacker, which managed to do – he acted not alone, but as part of the grouping from Switzerland. The very same attacker published an open letter, where he stated that he acted within the rules of the service and did not violate anything.

A month after the crisis began, on July 20, the authors of The DAO had two options for solving the problem, one of which was proposed by Buterin. Head Ethereum wanted to use the method of ” soft fork ” – the freezing of all stolen funds with the subsequent rollback of the block of blocking until the moment of breaking.

Buterin at a conference devoted to the blockade. New Delhi, 2016 year. Photo of Blockhain Storm
Buterin at a conference devoted to the blockade. New Delhi, 2016 year. Photo of Blockhain Storm
Since the structure of Ethereum is decentralized, all changes to the system are introduced only through community voting. Bouteria was supported almost unanimously, but within the organization and in the community there was controversy over the second option – “hard fork ” – updating the Ethereum protocols and dividing the system into two “universes”. Despite protests, the management decided to use this, more radical approach.

In one case, hacking never happened, and the stolen money remained on people’s accounts. In another “universe” hacking occurred. The trick was that the “hacked” version had to disappear after the patch of the system. But when the division was over, the authors faced a new problem – the community broke up into two camps: some resigned themselves to the advent of the second “universe”, while others said it was a violation of the standards of decentralization and the concept of blockade.

This ideological war led to the fact that the community members continued to mine in the original “universe”, where the breaking occurred. Soon, she gained too much value to remove it, and a group of volunteers led by a man under the pseudonym Arvicco ( rumored to be living in Russia) created Ethereum Classic, the second crypto currency in the platform. Now the price of its token is about 19 dollars. The price of the updated Ethereum, in which hacking never happened – about $ 300.

Ethereum Classic supporters presentation room. Photos of Ethereum Classic
Ethereum Classic supporters presentation room. Photos of Ethereum Classic
The blame for the theft was laid on The DAO, supposedly the team of programmers made a mistake in the code, which led to the crisis. This was recognized by some of the company’s participants. After losing user money, many systems that exchange crypto-currencies for fiduciary (ordinary paper) money, have excluded DAO from their registry.

From that moment the rate of the token began to fall, now it costs less than a dollar. As for the burglar, he took about $ 50 million at the rate for October 2016 from the original “universe” (according to another version, the hacker stole about $ 100 million).

The failure of the DAO project, which received such wide support, showed the supporters of the blockade vulnerability platform. Despite decentralization, hackers managed to find vulnerabilities. And the crisis of opinions that unfolded after the break-in was an unprecedented proof of the unpredictability of crypto platforms and Ethereum.

Ethereum connection with Akasha project

In April 2017, Buterin stated that the platform team was trying to maintain neutrality and did not give estimates regarding other crypto-currencies and teams. However, the platform cooperates with various companies, including Akasha.

In May 2016, the founder of Bitcoin Magazine and Vice President Ethereum Mihai Alisie introduced Akasha, a decentralized social network like Facebook, where people communicate, leave comments and put each other’s huskies. Buterin acts as a project advisor, he works on the Ethereum system and the Inter Planetary File System (IPFS) – p2p-hypermedia protocol by the type of torrent trackers.

Mihai Alize (center) with the Akasha team. Photos from Alize's personal twitter
Mihai Alize (center) with the Akasha team. Photos from Alize’s personal twitter
According to Alize, Akasha will solve the problem of manipulating ratings and content, when in social networks special companies create armies of bots or non-existent subscribers, or publish unconfirmed false information. That is, it can be assumed that this will help in the fight against fake news, a phenomenon that began to be discussed after the US presidential election in November 2016.

Files and records of Akasha users are not stored on servers and are protected by blocking protocols. In it, you can conduct transactions using the Ethereum crypto currency, including receiving payments for posts and downloading content. At the same time, Buterin noted that it is not necessary to consider the social network as a way of earning.

In addition to fighting bots, the authors of Akasha intend to defeat the problem of “the fragility of stored information” on the Internet, including websites, documents, e-mail archives or video. These data can easily be removed by the government or corporations, or they can simply disappear, because the owner of the hosting will stop paying for the content of the resource.

The next time you see page 404, remember that this is in itself a small tragedy. This can be compared to how if our collective brain had lost some of its memory. We live in an information age that is subject to censorship and digital amnesia. This affects every user on the network.

Mihai Alize, creator of Akasha and co-founder of Ethereum

A vivid example of the repositories of once remote resources is However, this is also only a centralized server, which the government of some countries, including Russia, has already blocked. Akasha should become a decentralized storage infrastructure.

Many details of the project are not yet known, but a full list of the development stages of the service is listed on the official website. Now the service is available in the alpha version, its interface resembles a hybrid Medium and Facebook. The official release of the application is scheduled for the end of 2017.

Ethereum in China

The first hint of plans to extend Ethereum to the Chinese market, where it is difficult to get to Western projects, happened around 2015. Then it becameknown that Buterin teaches Chinese. Since then, the situation has changed dramatically. In May 2016, the co-founder Ethereum joined the Chinese alliance ChinaLedger Alliance, created to promote the technology of blockade in the country. Among the members of the company are the Chinese Mint, the largest Chinese subsidiary of Alibaba Group, Baidu, Meituan and Peking University.

In May 2017, one of the three leading Chinese companies for exchanging crypto currency, Huobi, officially added Ethereum to its roster. To this decision, according to the leadership of the exchanger, they came amid a rapid rise in the cost of the etherium.

Buterin currency long been popular in Asia, including Japan and South Korea, but now the head of Alibaba intend to integrate Ethereum in Alipay service, which is used by about 450 million people in the country. At the moment, the largest exchange market Ethereum is South Korea with more than 19% of the world market share. If China’s interest in the site continues, it can quickly cut off the Korean stake.

Ethereum another link with China is based on the Singaporean startup TenX, who spent his June 24 ICO – something like crowdfunding based cryptocurrency. The idea of ​​the project is to store on a conventional debit card a crypto currency, not ordinary money.

Two months earlier, the company said that it received a million investments from the Chinese venture fund Fenbushi Capital, co-founder of which is Buterin. At the same time, the creator of Ethereum claimed that he did not invest personal money in a start-up, only stock. It is noteworthy that he forbids start-ups to publicly tell that he consults them, but in the case of TenX acts openly.

“Alliance of Entrepreneurs”

In March 2017, several block-start-ups, research groups and representatives of the largest technology companies in the world formed the non-profit organization “Entrepreneurs Ethereum” (Enterprise Ethereum Alliance). It included , among others, Cornell University, Toyota Group, Microsoft, Intel, Samsung SDS and the National Bank of Canada. In total, the number of initial participants was 116 institutions from different countries.

The Alliance consults and develops with Ethereum private block platform, which each organization will then receive for personal use. In addition, community members monitor the platform and advise on security issues. The development of software based on Ethereum deals with Microsoft. These will be closed versions of the platform, which will be created specifically for each institution. Beta version of the service already uses the Chinese mint and the largest in terms of assets American bank JPMorgan.

Department for the development of the blockbuster program based on Ethereum in Microsoft. Photo by The New York Times
According to the chief architect of the blockbuster at Microsoft, when the conversation about the technology of “Smart contracts” occurs somewhere, people first of all mention the possibilities of Ethereum. In January 2017, the largest consulting company Accenture said that blocking technology can save banks from $ 8 to $ 12 billion a year (about 30% of total costs) that could be spent on infrastructure costs. Accenture is a member of the Ethereum alliance.

However, so limited prospects are still hampered by the limitations of the platform. According to Buterina, Ethereum does not yet have the opportunity to offer services to millions of users. In addition, not all people and organizations are ready to publish their transactions on the Internet, and in such cases, the team will have to create additional Butterina encryption keys.

Ethereum in Russia

Russian authorities and banks are interested in the capabilities of the Ethereum block-technology already after the platform’s heyday. In 2016, Sberbank announced that it had used the functions of the Buterson platform for the first time to issue a power of attorney and work with the account on its basis. Head of the state bank German Gref and the head of the Central Bank Elvira Nabiullina spoke about the possibilities of the block and Ethereum positively.

In 2016, the Central Bank even announced the launch of the MasterChane platform, which will allow future market participants to exchange information in a closed blocking service. Technology research was conducted together with representatives of Sberbank, Bank Otkritie, Alfa Bank, Tinkoff and QIWI. In September of the same year, Gref argued that the large-scale application of technology will not begin until the end of 2017 or the beginning of 2018.

In May 2016 it became known that Ethereum plans to open a research center for blockade technologies at the Skolkovo Innovation Center, which supports scientific developments in energy, energy efficiency, space, biomedicine, nuclear and computer technologies.

Buterin with co-founder of Yota Devices companies Vladislav Martynov. Photos from Ethereum's personal archive
Buterin with co-founder of Yota Devices companies Vladislav Martynov. Photos from Ethereum’s personal archive
In February 2017 it was reported about the plans of the Moscow authorities use blokcheyn in voting “active citizen”, but in the State Duma decided that today the use of neural networks and blokcheyna to monitor the elections can not meet the safety standards.

In April 2017, it became known about the government’s plans to use blockade and machine training in drafting laws, and in May, Buterin said that blockbuster technology has prospects in Russia and that it will help in the fight against corruption. On June 3, the founder Ethereum discussed the possibilities of a blockade with Vladimir Putin.

Earlier, Buterin said that in Russia the company is trying to popularize the technology of blocking, to stimulate Russian software companies – Acronis, Kaspersky Lab, Yandex and others – to lay Ethereum support in future versions of products. In addition, Buterin hopes to stimulate the development of Russian developer communities, so that small startups are more interested in blocking.

Buterin at the conference Ethereum Russia 2016 in Skolkovo. Photos of BitsMedia
Buterin at the conference Ethereum Russia 2016 in Skolkovo. Photos of BitsMedia
But in addition to formal agreements with the government and companies, Ethereum has another way out to the Russian audience. From the beginning of March to June 13, the etherium has risen in price by 24 times, and Russian miners are probably partly involved in these changes. In early summer, many Russian stores almost disappeared from the sale of video cards , and the prices for them for a month and a half rose twice. Vendors and specialists in the stores admitted that the mines with the help of “farms” video cards etherium, and not bitcoin.

To all appearances, this is due to the fact that the bitcoin has become too unprofitable: the calculation of the hash amount takes too much electricity, the costs of which are sometimes difficult to cover. Ethereum is considered the second most popular crypto currency.

Buterin himself recently commented on his old judgment about the technology of the blockade, including through which the market capitalization of Ethereum is more than $ 4 billion. Even before the platform was created, he was surprised how such a system can work, and the figures in the computer make a profit. Since the creation of his own platform, after going through many difficulties, he found the answer to the question.

I would say so: their [numbers] cost depends on what people think about them. It’s such an emotional moment. Just like the square meter of land in one place is much more than in the other. There is no one reason why the cost is such, and not the other. It’s just that the market has already formed and people trust the currency of our platform – this is probably all that is needed.

Vitalik Buterin, co-founder of the Ethereum block-platform
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