Is Ethereum "The World Computer"?

Exactly five years ago the blockchain Ethereum went online. In her book "The Infinite Machine", former Bloomberg journalist Camila Russo tells the story of how this ambitious project came about.

It is February 2014, eight men are sitting in a two-room flat near Zurich. They do not know each other very well. They don't yet have a very concrete plan of what they will create together, nor who will play which role. But here they are making a landmark decision.

It is the genesis of Ethereum, based on which the later second-largest cryptocurrency in the world will run. During the great crypto boom, nine out of ten of all ICOs were running Ethereum, estimates former Bloomberg journalist Camila Russo. "Ethereum is the Blockchain behind all the crypto-madness of 2017," she says.

Russo has worked intensively on Vitalik Buterin's invention and has now written a book about Ethereum. It will recount the beginnings of the project, which went live on July 30, 2015, exactly five years ago today. Finance Forward spoke with the journalist about her view of the Blockchain and its potential.

Ethereum is more ambitious than Bitcoin

In her book, Russo, who has spoken to hundreds of people from the Ethereum community - including the founding members - describes the time as follows: "They move from one Airbnb flat to the next, but the place they stay longest is a two-room flat thirty minutes south of Zurich by car. During the day, they romp around a small table by the kitchen, which is almost completely covered with laptops. They used every available chair in the house, including a small bench they brought from the living room, and crouch there with their elbows touching. They worked on the website and discussed things like the structure of the future organization, public relations in the community, and communication up to the crowd sale."

The spokesperson in Switzerland at the time was Vitalik Buterin, who had already put the idea on paper in 2013 when he was just 19 years old. He wanted to build a platform on which the administration of decentralized applications in a separate blockchain would be possible. A kind of new, democratized Internet, without censorship, without data transfer to third parties.

It was an unspecified pitch, but it was meant to be. Buterin was counting on every person on Ethereum being able to develop what they wanted. "Bitcoin was to decentralize and democratize the financial world. The vision behind Ethereum is to be able to offer exactly that for all areas of life," explains Russo. "So as a project, it's even more ambitious than Bitcoin."

Together with seven other Blockchain enthusiasts - Mihai Alisie, Anthony Di Iorio, Charles Hoskinson, Gavin Wood, Jeffrey Wilcke, Joseph Lubin, and Amir Chetrit, Buterin agreed to build Ethereum from the Swiss town of Zug. Alternatives would have been Singapore, the Netherlands and Canada, but Switzerland was particularly keen to attract innovative tech companies at the time. Zug is now also called Crypto Valley, in reference to Silicon Valley.

Can it function as a profit-oriented company?

The first few months in Switzerland, in particular, were the most formative time for the project says Russo. The individual positions of the founders had not yet been determined - and no one was paid a salary. The crypto-disciples worked only for the unwritten promise of getting some cryptocurrency that would be raised at a crowd sale. The team members paid rent and expensive lawyers out of their savings and used their credit cards to pay their daily expenses.

Right at the beginning, they had to decide that would determine the future of the project. Should the crypto-currency be created in a for-profit company - or from a non-profit foundation? "They had to decide whether their vision of a new Internet would be Google or Mozilla, a company with centralized management and predictable revenues, or a foundation that would help developers from around the world build Ethereum in a decentralized and organic way," Russo writes in her book.

The team had heated discussions, and in the end, it was all about the identity of the project, in which they sometimes invested a lot of money and energy. The underlying question was: Can a for-profit company really build a completely decentralized and organized product? After all, Ethereum was to become a democratic Internet. Can a company build that - or is it more credible and realistic than foundations?

One of the great blockchain hopes

After many arguments and discussions, which Russo describes in detail in her book, a decision was finally reached. "Ethereum will be a non-profit and open-source project", Buterin tells the rest of the team six months later in Zug. And so it happened, although some of the co-founders subsequently left Ethereum.

On 30 July 2015, the Ethereum platform went online. Since then, it has been an important part of the crypto-world. Buterin is now the only member of the founding team who is still actively involved in Ethereum; all the others left the platform, partly to build competing products.

The core essence of the project, which Russo tries to capture in her book: "There is an alternative way to organize things. One where people have more control over their finances, their data."

Her book, "The Infinite Machine" doesn't dwell on the technicalities, it's not a dry retelling of the origins of blockchain protocols. It tells the story of some young people who wanted their idea to fundamentally change - and improve - many aspects of our lives. And how they argued about it.

Meanwhile, Ethereum has become the most promising blockchain project for many enthusiasts. Russo estimates that more than 200,000 developers worldwide are working on projects that use Ethereum. "Regardless of whether it will still exist in a few years' time or not, Ethereum has already made great technological advances," she says.

Camila Russo's book "The Infinite Machine: How an Army of Crypto-hackers Is Building the Next Internet with Ethereum" was published on July 14 by the US publisher Harper Collins.

Summary by Robert Schwertner

CEO INNOMAGIC GmbH

Blog: cryptorobby.blog

Twitter: @cryptorobby_