Somewhere in the middle of the Pacific Ocean is a tiny tropical group of islands called The Yap Islands. They’ve been inhabited by a native tribe since ancient times, and this remote community provides us with an interesting episode in the history of money: they used money made from limestone, i.e. they paid each other in stone money for centuries.
Bitcoin’s technology is a revolutionary invention because previously the reliable operation of a virtual monetary system without a central institution couldn’t be guaranteed. Bitcoin has proved over the last eight years that this is possible. Despite its innovation, however, it has a number of weak points.
One of the most interesting innovations of the past years has been the creation of the “world computer”, the Ethereum, which enables the signing of smart contracts. By further developing bitcoin’s technology, it creates a virtual interface on which participants who want to do business with each other can enter into contracts. The contracts are then implemented automatically; there are no options for subsequent tricks or manipulation.
According to Aristotelian physics, rest is the natural state of bodies. Their motion requires constant force. This thesis was sustained for two thousand years, which is not surprising since this was the general direct experience. A stone that has rolled away stops and chariots are kept moving by the pulling force of horses.
One and a half years ago, Superblog readers were presented with an investment opportunity that is worth 25 times more today in dollar terms. What is ether? What is the source of its value? How is it better and different than bitcoin? How did we get here and what can we expect for the future? These are the questions I am attempting to answer below.
Satoshi Nakamoto published his theoretical white paper explaining the mechanism of the bitcoin in October 2008. Although the paper is only 9 pages long, it describes one of the most significant inventions in recent years, the blockchain technology responsible for the authentic clearing of bitcoin transactions.