Born January 31, 1994, in Russia, Vitalik Buterin is the Founder and chief scientist of the Ethereum project. Just like Bitcoin has its mythical figure that is Satoshi Nakamoto, Vitalik is the skinny, geeky-looking techie behind Ethereum.
But don’t let the cute cat T-shirts fool you, Vitalik was introduced to Bitcoin in February 2011 when he was 17, and at that time no one at his age had even a remote idea what cryptocurrencies were. Initially, his father was more interested DLT and cryptocurrencies, whilst Buterin didn’t think much of it.
After hearing about it, repeatedly, he eventually got interested in it — so much so, in fact, that he quit playing World of Warcraft and got possessed by the potential power of this new technology.
Even as a child, Vitalik showed an interest in maths and programming. He had the ability to add three-digit numbers in his head twice as fast as the averagе human being, which might have set him aside as an oddity.
He was later placed in a class for gifted children in his elementary school in Canada, where his parents emigrated when he was six. At this point in time, some rumors about him had started that will as it turned out, and those would follow him for the rest of his life.
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Some people were saying that he had learned to speak fluent Mandarin in just a few months, that all of his worldly possessions could fit into one suitcase, that he was an autistic wunderkind, and perhaps one of the most bizarre of stories is that he had once eaten an entire lemon without removing the rind.
Commenting on the rumors about his childhood years,
Can you notice the sarcasm hidden in those words?
In his University years, he started writing forum posts for 5 Bitcoin per piece, which then was close to 4 dollars. In fact, what started as a hobby soon grew into a forty-hour-a-week obsession that will eventually lead him to take a life-changing trip to a bitcoin meetup in San Jose, California.
He remembers those days very well, “That moment crystallized it for me. It really convinced me that, hey, this thing’s real and it’s worth taking a risk and jumping into it. So I did.”
Soon after, in 2013, he dropped out of University and dedicated his life to the cryptocurrency community.
Vitalik Buterin is now considered one of the most serious and influential minds of the cryptocurrency world, and his views are highly regarded and extend their reach beyond the cryptocurrency community, grabbing the attention of some of the world’s most powerful policymakers.
After the St. Petersburg International Economic Forum in 2017 he met with President Putin, which was followed by a statement from the President’s official website stating:
Bitcoin Magazine is the oldest and most established magazine regarding Bitcoin, blockchain technologies, and the digital currency industry in general. In 2012, which is centuries ago in crypto time, Vitalik Buterin co-founded the magazine after his blogs caught the attention of Mihai Alisie, a Bitcoin enthusiast from Romania.
Vitalik was multitasking big time when he took the position of head writer. He was taking five advanced courses at the University of Waterloo, all the while working another part-time job for the cryptographer Ian Goldberg.
The collaboration with Mihai Alisie turned out to be very fruitful; the magazine issued a print edition which was sold at Barnes and Noble and mailed to subscribers worldwide. In January 2015, Bitcoin Magazine was acquired by BDC Media who also publishes yBitcoin, Let’s Talk Bitcoin and Distributed.
Their collaboration and friendship didn’t stop there, as Mihai later became one of Ethereum’s founders and vice president of the Ethereum Foundation.
Birth of Ethereum
When designing Bitcoin, Satoshi Nakamoto managed to remove the “third trusted party” out of the equation of global payment systems by recording transactions on a distributed ledger operating under the proof-of-work consensus algorithm. The transactions were handed over to а network of unified computers which all work together and run interoperable software to secure and verify payments.
The idea of using blockchain technology to secure and verify payments, and theoretically to usе it for more complex transactions between the payer and the payee, has been present even before the birth of Ethereum. The problem with Satoshi’s creation was that, due to security reasons, Bitcoin’s protocol was written in such a way that it intentionally limits the complexity of the possible operations that the protocol could execute.
However, Buterin realized that he needed to write a Turing-complete programming language which can be used to create a new kind of blockchain technology. In simpler words, a ledger that supports the creation of all sorts of applications.
The Ethereum white paper explains the idea of an all-new blockchain network.
He published his idea in the Ethereum white paper without much confidence. In fact, he expected the professional cryptographers to roast his project and pick it apart piece by piece.
This was essentially the birth of Ethereum – an open-source, public, blockchain-based distributed computing platform featuring smart contract (scripting) functionality. It was the start of the ICO craze, and the largest fail of a crowdfunding campaign in history – the DAO.
Simply put, enabling innovation by the creation of all sorts of crypto projects with their own tokens is what made Ethereum special. It gave birth to a whole new industry.
There are more than 18,000 Tokens issued thus far, and although everyone is aware that most of them are outright scams and get-rich-quick schemes, the mere volume and diversity of ideas speaks for itself.
Difference Between Ethereum and Bitcoin
Bitcoin’s design is made for it to serve as a form of payment or, as some may argue, a store of value, whereas Ethereum functions as a platform through which people can create smart contacts and run applications. Ethereum and Bitcoin fundamentally both rely on the blockchain technology, however, the application of it is very different.
The “smart contract” is a concept introduced by Nick Szabo in 1996 and that’s what sets apart Ethereum from other types of cryptocurrencies.
He explained it better at a DC Blockchain Summit:
So what are some of the practical implications of this technology? Well, let’s say for example that you’re in a hurry and you need to book a room on Airbnb. All you have to do is make a reservation with the owner of the place and get on your way.
When you get to the apartment building, you’ll find a lock on your room that runs a smart contract. The contract code relies on if-then statements; if you deliver the agreed amount of currency (ether), then a smart contract is generated and the protocol automatically sends a digital key to the mobile phone that gives you access to the “smart-lock” on the door.
Every step of the smart contract is recorded on the public blockchain, and it’s available for everyone to see and verify. This essentially eliminates the need to meet the owner in person to do the exchange; it’s a win-win situation, saving time and effort for both you and the owner.
To be clear, this is just one basic example of how this novel technology could change the way we operate in the world. The use cases are literally limitless.
Vitalik’s Political Views and Influence
When Vitalik was asked which political writers he’s interested in, he listed Mises, Hayek, Friedman, Sowell, and Rand. We can assume that his views are libertarian, as they are somewhat similar to the previously mentioned major libertarian thinkers.
Furthermore, the views expressed on his blog, in his interviews, and his tweets, reflect his libertarian stances. He’s a hard-core believer in Laissez-faire capitalism and free markets..
Standard libertarian rebuttal applied to "see, prediction markets don't work!": it's not like any other institution did substantially better
— vitalik.eth (@VitalikButerin) November 10, 2016
The first thing that comes to mind when we think about free market capitalism is profit. But mere profit is not what Vitalik has in his mind when he speaks about free markets. He believes that the free gives entrepreneurs the adequate platform to let their creativity loose and contribute something meaningful to the world.
Of course, being aware of the by-products of capitalism and the greedy nature of human beings, he warns the crypto community that “If all that we accomplish is lambo memes and immature puns about “sharting”, then I WILL leave.”
*All* crypto communities, ethereum included, should heed these words of warning. Need to differentiate between getting hundreds of billions of dollars of digital paper wealth sloshing around and actually achieving something meaningful for society. https://t.co/aNpEnBNGsA
— vitalik.eth (@VitalikButerin) December 27, 2017
This warning shouldn’t be taken light-headedly. We’re creating the future of a decentralized world and profits should be a result of this process, not the aim of it. Vitalik’s influence in the community is also something that shouldn’t be underestimated, in fact, the death hoax example should give you an idea of exactly how influential this guy is in the crypto space.
In June 2017, Vitalik Buterin supposedly died in a car crash. Every major cryptocurrency news site started spreading the rumors with all kinds of clickbait headlines popping up everywhere in the crypto space. After the dust settled, it soon became clear that it was all just a hoax started by members of the 4chan forum.
You may ask “Why is that information important, what does this have to do with anything?” Well… We’re witnessing a lot of celebrity death hoaxes on a regular basis, but this one is quite interesting because of one peculiar thing. The “news”, which spread like wildfire, spiralled down the Ethereum price from $300 to $230. Here we can clearly see the correlation and the importance between the cryptocurrency and its founder.
Another day, another blockchain use case. pic.twitter.com/OyHzdhEeGR
— vitalik.eth (@VitalikButerin) June 26, 2017
The tweet that Buterin published to quell the false rumors shows him holding a new case for blockchain and cites a new piece of data from Ethereum. His way of holding up today’s piece of paper.
Vitalik’s Views on Decentralization
With the sudden rise of cryptocurrencies, we are only beginning to grasp the possibilities of decentralized applications. Decentralized forums, exchanges, file sharing… Almost anything that up to today relied on third trusted parties and ran on centralized servers can now be decentralized.
People are getting excited over the idea of shared economy, and there are big banks and companies like Uber, Microsoft, and others, who are already exploiting this idea. Decentralization is one of the strongest features of cryptocurrencies and, needless to say, Vitalik as one of the “leaders among equals” regularly shares his thoughts about this subject on his blog.
When people talk about software decentralization, Vitalik states that there are three separate axes of centralization/decentralization that they may be talking about:
1. Architectural (de)centralization — how many physical computers is a system made up of? How many computers breaking down at a single time can it tolerate?
2. Political (de)centralization — how many individuals or organizations ultimately control the computers that the system is made up of?
3. Logical (de)centralization — does the interface and data structures that the system presents and maintains look more like a single monolithic object, or an amorphous swarm? One simple heuristic is: if you cut the system in half, including both providers and users, will both halves continue to fully operate as independent units?
Why are all of these aspects essential for successful decentralized protocols? Vitalik would say that architecturally decentralized protocols, like the torrent networks, for example, are immune to government censorship and hacker attacks because they have no infrastructural central point of failure.
The fact that the torrent network is seamlessly running for more than 15 years just proves the point. In addition to fault tolerance and attack resistance, blockchains are politically decentralized which means that no one controls them. It’s a system of rules without rulers. And when you have “no one at the top” to steer the ship according to his whims, you end up with vastly cheaper “cruise trips.”
One of the biggest advantages of DLT in Vitalik’s opinion is that blockchains will empower the little guy and take power out of the whales in the market. In his interview for WIRED in 2016, Vitalik was quoted saying:
“I think a large part of the consequence is necessarily going to be disempowering some of these centralized players to some extent,” he says. “Because ultimately power is a zero-sum game. And if you talk about empowering the little guy, as much as you want to couch it in flowery terminology that makes it sound fluffy and good, you are necessarily disempowering the big guy. And personally, I say screw the big guy. They have enough money already.”
But although the main features of cryptocurrencies such as partial anonymity, freedom to enter and leave the market, zero governance and oversight, plus the fact that it’s made and maintained for the people and by the people, make them particularly attractive to individual users or small businesses, the big guys are joining the party in style. In 2017 news broke out that JP Morgan, Microsoft, Intel, CME Group, ConsenSys and more than two dozen other companies have teamed up to form The Enterprise Ethereum Alliance (EEA). The idea behind this coalition is to develop the foundations of a more “big business friendly” Ethereum protocol that will solve the blockchain scaling issues, enable post-trade settlements, payments between banks, supply chain tracking and so on.
Vitalik’s statement in the WIRED interview and the recent developments of 2017 don’t really fit in together, and he was in fact confronted about his statement in an interview he gave for Unchained in early 2018. When asked how the big guys forming the EEA fit in the picture, particularly in relation to his quote for WIRED, he said that he still maintains that the primary benefit of DLT is giving regular people access to finance, contracting and so forth, but that the big guys can certainly play a role in the game too. He’s glad that big players like JP Morgan and Microsoft recognize the value of this novel technology and that they’re starting to play with it, instead of against it. He believes that this will eventually be to everyone’s benefit.
Vitalik Buterin Net Worth
By now you’re probably wondering, how rich is this kid? At the age of 24 he is the head of the second most successful cryptocurrency project in the crypto industry, and with Ethereum’s market cap valued at just over $50 billion, he must be filthy rich, right? Well… You’re not wrong.
Thanks to Vitalik’s transparency, which is one of the most appraised virtues a leading face of a DLT project can have, we can quench the thirst of our feeblest, most basic desire to know how much money a person is worth! In February 2016, for the sake of transparency, while publishing a list of all of his formal commitments to crypto projects, a Redditor named MrSpecks asked a pretty straightforward question: “Does someone know how many ETH Vitalik and the other main founders have?”
MrSpecks, to everyone’s surprise, got the same kind of straightforward answer from Vitalik himself — “I received ~553,000 in the genesis premine and ~150,000 from the developer purchase program. I currently hold ~630,000 ETH.” And in spite of the fact that just two months later he liquidated about 25% of his cryptocurrency portfolio, that’s still a crazy amount of ETH.
Vitalik Buterin’s holdings are linked to two main addresses:
Due to the open and transparent nature of Ethereum’s blockchain, everyone can track (in real-time) how much ETH Vitalik holds at any given moment. As you can see for yourself, Vitalik is worth more than $175 million in ETH holdings alone. Not bad for a 24-year old, eh?
In times of scandalous ICO scams and various cryptocurrency Ponzi schemes, this level of organizational transparency is exactly what keeps this whole thing from crumbling down and losing all of its hard-earned credibility. The partially-informed mainstream media is still depicting cryptocurrencies as “the notorious dark web money,” and we, the proud members of the crypto community, need to step up our game and show the world that cryptocurrencies have legitimate, paradigm shifting implications and actual, real-world value.
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Final Thoughts and Recommended Reads
Whether you agree with Vitalik’s technical solutions and philosophical viewpoints or not, his brilliance cannot be denied. Ethereum is one of the most, if not the most revolutionary technology of our times.
A decentralized, Turing-complete virtual machine running smart contracts on blockchain technology is an idea that can be devised only by a mind of a genius. One article couldn’t possibly scratch the surface of Vitalik’s impact on the world, and at just 23 years of age.
In ten years time, this guy will be celebrated as one of humanity’s most prolific technological and economic thinkers and influencers alive.
His thoughts layed out in his blog article “Proof-of-stake design philosophy” are a must-read for anyone interested in the security and efficiency of DLT and consensus algorithms in general.
Happy learning! Feel free to share your thoughts in the comment section below.