Look Out Bitcoin, Here Comes Ethereum

New virtual currency is creating a buzz
By Arden Dier,  Newser Staff
Posted Mar 29, 2016 6:25 PM CDT
Look Out Bitcoin, Here Comes Ethereum
A Bitcoin token is seen in Sandy, Utah.   (AP Photo/Rick Bowmer)

Bitcoin hasn't quite soared the way many had hoped it would. Perhaps Ethereum will. The virtual currency has gained interest from IBM, JPMorgan Chase, and Microsoft "as a sort of Bitcoin 2.0," reports the New York Times. Created around 2014 by a 21-year-old college dropout, Russian-Canadian Vitalik Buterin, Ethereum is much like its rival, though the Times adds this caveat: "The system is complicated enough that even people who know it well have trouble describing it in plain English." Transactions are recorded publicly on a blockchain, which stores data without the need for a central repository. For the uninitiated, a blockchain is essentially "an indestructible, public, immutable ledger," explains a post at Inverse. "An unmodifiable record of what’s happened." Ethereum also supports "decentralized applications" and "smart contracts" that don't charge fees, Buterin tells CoinDesk. The idea is to eliminate middlemen.

The Times uses this example of how it works: Two people betting on a sports game could program their bet into the blockchain so that the money—or Ether units—would be automatically sent to the winner when the game is over. Inverse, meanwhile, thinks it's more than a digital currency in that it "takes the conceptual basis for (Bitcoin) and makes it applicable to just about anything." Investors seem enthused: The value of an Ether has jumped 1,000% to a peak of $12, bringing the value of all existing Ether to about $1 billion—second only to Bitcoin's $6 billion in the world of virtual currency. But Ethereum is very much in the early stages, and it remains to be seen how the complex software will stand up to security challenges and attacks that have hit Bitcoin and others. (Bitcoin's mysterious founder may have been unmasked.)

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