Bitcoin makes it possible to send money around the world with no fees, banks or governments required. Buterin, now 23, has upped the ante envisioning a way to apply that idea to everything else and usher in Web 3.0, the looming decentralized version of the Internet, the possibilities of which are limitless
A small group gathered at Pauper’s Pub in Toronto’s Annex neighbourhood on a Saturday afternoon in November 2012 to talk about Bitcoin. Anthony Di Iorio, now a well-known serial entrepreneur, had organized the get-together, having recently heard the gospel about the then-little-known cryptocurrency and become a convert. Concerned about the health of the financial system, he sold his Toronto rental properties, purchased some bitcoins and was looking for like-minded people to share his newfound zeal.
Di Iorio created the event on the site Meetup.com: “This will be the first Bitcoin meetup in Toronto. Let’s just get together and see what happens.” A handful of people he had never met signed up. One pale and gangly attendee said no thank you to the beer, pub food and most social interaction. His name was Vitalik Buterin and he was a first-year student at the University of Waterloo in southwestern Ontario, where he was studying computer science. “He didn’t talk much. There was no real conversation with him. He was just literally shaking,” Di Iorio says. “Over the meetups we got to know him better.”
Turns out, Buterin wasn’t your average shy teen computer whiz. The year before with a friend from Romania, he had founded the print publication Bitcoin Magazine. Buterin was building a name for himself among the cryptocurrency community. A few months after that gathering in Toronto, he dropped out of university to travel the world and write for the magazine full time. A year later, Di Iorio was still hosting the meetings, though at a different venue with more space for a bigger crowd and a projector. But now when Buterin came, he talked about a new idea. Bitcoin had made it possible to send money around the world with no fees, banks or governments required; he had come up with a way to apply that idea to everything else and usher in Web 3.0, the looming decentralized version of the Internet, the possibilities of which are limitless.
A farmer in Iowa could instantly collect on an insurance contract that promised to pay him a certain amount in the event rainfall failed to reach an agreed-upon level in a season. A rental car could link up with a driver’s smartphone and start its ignition through an app once she paid the daily fee, and then cease to unlock or start once the rental contract expired. People could earn money by renting out their hard drives to a decentralized cloud storage service such as Dropbox.
Such contracts can’t be done with bitcoin or mere currency. Bitcoin was made possible by an innovation called blockchain, a secure ledger of transactions kept by computers around the world that can be trusted because the ledger can’t be easily modified. But Bitcoin’s scripting language can only be used for certain types of transactions. Buterin proposed building a new blockchain-based system called Ethereum with a programming model developers would find familiar, easy to understand and facilitated by a coding language capable of theoretically solving any computational problem. Ethereum had the potential to eliminate the need to trust a single company, person or government to keep massive amounts of money and data safe and secure.
Di Iorio told Joseph Lubin, another Canadian entrepreneur interested in Bitcoin who was living in Jamaica at the time, to come to a meeting to learn more about Buterin’s idea. Like Di Iorio, he was looking for a new project to invest in. After reading a white paper Buterin wrote on Ethereum in 2013, he realized he had found it. “It basically enabled me to understand how we could crystallize all the potential we saw and many other people saw in Bitcoin,” Lubin says. “It really provided a mechanism for how we could, quote, ‘decentralize all the things.’”
Within three-and-half years, Ethereum would be worth US$7 billion. The term “blockchain” would be more than just a hot corporate buzzword, and the world’s largest companies and financial institutions would be experimenting with Buterin’s technology. And the shaking, awkward teen would emerge as a respected world leader in cryptocurrency. But first he had some work — and some learning — to do.
Vitalik Buterin was born in Kolomna, Russia, an ancient city about 100 kilometres southeast of Moscow. His parents moved to Toronto from Moscow in 1999, just before his sixth birthday. By then, Buterin had already taken to computers, playing with Excel on an old PC at the age of four. His father, Dmitry Buterin, remembers his son writing a complex document called the Encyclopedia of Bunnies at the age of seven. “Basically, he came up with this whole universe that is populated by bunnies, but it’s all governed by very strict formulas,” says Dmitry, an I.T. professional who recently co-founded a blockchain startup incubator called Blockgeeks Lab. “It was all full of math and charts and calculations.”
Years later when Buterin told his father he was thinking about dropping out of university to travel the world and learn about Bitcoin, Dmitry says he was all for it. “’I told him, ‘You know what? If you stay, you will have a very nice, guaranteed job at Apple, Google, whatever. You’ll make $100,000, probably more,” Dmitry says. “’If you drop out, it will be different, more challenging in life. But you will learn so much more than you learn in university. It’s fine if you do that.’ And he did that.” Buterin dropped out in 2013 and travelled to Israel, Amsterdam and San Francisco to write for the magazine and work on various cryptocurrency projects.
Buterin released the Ethereum white paper in November that same year and had a founding team in place a few weeks later. The team consisted of Di Iorio, Bitcoin Magazine co-founder Mihai Alisie, Amir Chetrit — whom he had worked with in Israel on a Bitcoin project called ColoredCoins — and Charles Hoskinson, an American mathematician who had founded an initiative to bring cryptocurrency to the mainstream called the Bitcoin Education Project. At 38, Di Iorio was the oldest by about a decade.
By January 2014, the time had come to meet face to face. Everyone bought plane tickets. Chetrit made T-shirts. The team rented a house full of bunk beds in Miami in advance of the North American Bitcoin Conference and got to work building the Ethereum project and, just as importantly, spread the gospel.
Gavin Wood, a programmer from the U.K. who later signed on as a founder of Ethereum, had already been turning Buterin’s white paper into functioning code during his Christmas holiday. By the time he got to the house in Miami in late January, he was ready for some intense coding sessions with fellow developers. Instead, he found a party. Even though bitcoin had fallen to a little more than US$800 from a high of US$1,127 in November, it had been worth less than US$100 as recently as August 2013. The Bitcoin community was feeling rich. “The parties were pretty extravagant — rooftop bars along Miami beach, that kind of thing,” Wood says. “For me at least, coming from a little northern town in England, it was pretty crazy.”
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Ice sculptures and dancing girls, however, weren’t enough for Bitcoin’s nouveau riche. They were on the lookout for the next big thing to invest in. A lot of them were looking at Buterin and seeing dollar signs. In normal circumstances, investors would not be begging a 19-year-old dropout, whose sole business experience consisted of running an obscure magazine out of his parents’ house, to take their money. Buterin may not have matched the image of a typical businessman, but he did fit another stereotype: the teen computer geek with a billion-dollar idea. The prospect of getting in early with the next Steve Wozniak or Mark Zuckerberg was highly appealing.
One night at the conference, Buterin gave a talk where he laid out his vision, wearing a black Ethereum T-shirt and speaking in an intense monotone. He received a standing ovation and was greeted by a lineup of people waiting to talk to him as he left the hall. His status as the prophet of cryptocurrency’s next big thing had been officially established.
With buzz building and dozens of people flowing through the rented house in Miami daily, Ethereum officially added three more founders: Wood, Joseph Lubin and developer Jeff Wilcke. Lubin, who had previously run a hedge fund and worked at Goldman Sachs, remembers worrying that some people were getting a bit carried away. “We were thinking about which island we should buy, because we needed a place for this new society to take hold. We were a little bit giddy,” he says. “A few of us … started thinking, ‘Hey, wait a sec.’”
One very good reason to “wait a sec” was to make sure they were complying with securities regulations. Taking money from unaccredited U.S. investors could open them up to charges from the U.S. Securities and Exchange Commission. “We thought it was possible we would land at JFK on a certain day and the FBI would tackle us to the tarmac,” Lubin says.
A small group gathered at Pauper’s Pub in Toronto’s Annex neighbourhood on a Saturday afternoon in November 2012 to talk about Bitcoin. Anthony Di Iorio, now a well-known serial entrepreneur, had organized the get-together, having recently heard the gospel about the then-little-known cryptocurrency and become a convert. Concerned about the health of the financial system, he sold his Toronto rental properties, purchased some bitcoins and was looking for like-minded people to share his newfound zeal.
Di Iorio created the event on the site Meetup.com: “This will be the first Bitcoin meetup in Toronto. Let’s just get together and see what happens.” A handful of people he had never met signed up. One pale and gangly attendee said no thank you to the beer, pub food and most social interaction. His name was Vitalik Buterin and he was a first-year student at the University of Waterloo in southwestern Ontario, where he was studying computer science. “He didn’t talk much. There was no real conversation with him. He was just literally shaking,” Di Iorio says. “Over the meetups we got to know him better.”
Turns out, Buterin wasn’t your average shy teen computer whiz. The year before with a friend from Romania, he had founded the print publication Bitcoin Magazine. Buterin was building a name for himself among the cryptocurrency community. A few months after that gathering in Toronto, he dropped out of university to travel the world and write for the magazine full time. A year later, Di Iorio was still hosting the meetings, though at a different venue with more space for a bigger crowd and a projector. But now when Buterin came, he talked about a new idea. Bitcoin had made it possible to send money around the world with no fees, banks or governments required; he had come up with a way to apply that idea to everything else and usher in Web 3.0, the looming decentralized version of the Internet, the possibilities of which are limitless.
A farmer in Iowa could instantly collect on an insurance contract that promised to pay him a certain amount in the event rainfall failed to reach an agreed-upon level in a season. A rental car could link up with a driver’s smartphone and start its ignition through an app once she paid the daily fee, and then cease to unlock or start once the rental contract expired. People could earn money by renting out their hard drives to a decentralized cloud storage service such as Dropbox.
Such contracts can’t be done with bitcoin or mere currency. Bitcoin was made possible by an innovation called blockchain, a secure ledger of transactions kept by computers around the world that can be trusted because the ledger can’t be easily modified. But Bitcoin’s scripting language can only be used for certain types of transactions. Buterin proposed building a new blockchain-based system called Ethereum with a programming model developers would find familiar, easy to understand and facilitated by a coding language capable of theoretically solving any computational problem. Ethereum had the potential to eliminate the need to trust a single company, person or government to keep massive amounts of money and data safe and secure.
Di Iorio told Joseph Lubin, another Canadian entrepreneur interested in Bitcoin who was living in Jamaica at the time, to come to a meeting to learn more about Buterin’s idea. Like Di Iorio, he was looking for a new project to invest in. After reading a white paper Buterin wrote on Ethereum in 2013, he realized he had found it. “It basically enabled me to understand how we could crystallize all the potential we saw and many other people saw in Bitcoin,” Lubin says. “It really provided a mechanism for how we could, quote, ‘decentralize all the things.’”
Within three-and-half years, Ethereum would be worth US$7 billion. The term “blockchain” would be more than just a hot corporate buzzword, and the world’s largest companies and financial institutions would be experimenting with Buterin’s technology. And the shaking, awkward teen would emerge as a respected world leader in cryptocurrency. But first he had some work — and some learning — to do.
Vitalik Buterin was born in Kolomna, Russia, an ancient city about 100 kilometres southeast of Moscow. His parents moved to Toronto from Moscow in 1999, just before his sixth birthday. By then, Buterin had already taken to computers, playing with Excel on an old PC at the age of four. His father, Dmitry Buterin, remembers his son writing a complex document called the Encyclopedia of Bunnies at the age of seven. “Basically, he came up with this whole universe that is populated by bunnies, but it’s all governed by very strict formulas,” says Dmitry, an I.T. professional who recently co-founded a blockchain startup incubator called Blockgeeks Lab. “It was all full of math and charts and calculations.”
Years later when Buterin told his father he was thinking about dropping out of university to travel the world and learn about Bitcoin, Dmitry says he was all for it. “’I told him, ‘You know what? If you stay, you will have a very nice, guaranteed job at Apple, Google, whatever. You’ll make $100,000, probably more,” Dmitry says. “’If you drop out, it will be different, more challenging in life. But you will learn so much more than you learn in university. It’s fine if you do that.’ And he did that.” Buterin dropped out in 2013 and travelled to Israel, Amsterdam and San Francisco to write for the magazine and work on various cryptocurrency projects.
Buterin released the Ethereum white paper in November that same year and had a founding team in place a few weeks later. The team consisted of Di Iorio, Bitcoin Magazine co-founder Mihai Alisie, Amir Chetrit — whom he had worked with in Israel on a Bitcoin project called ColoredCoins — and Charles Hoskinson, an American mathematician who had founded an initiative to bring cryptocurrency to the mainstream called the Bitcoin Education Project. At 38, Di Iorio was the oldest by about a decade.
By January 2014, the time had come to meet face to face. Everyone bought plane tickets. Chetrit made T-shirts. The team rented a house full of bunk beds in Miami in advance of the North American Bitcoin Conference and got to work building the Ethereum project and, just as importantly, spread the gospel.
Gavin Wood, a programmer from the U.K. who later signed on as a founder of Ethereum, had already been turning Buterin’s white paper into functioning code during his Christmas holiday. By the time he got to the house in Miami in late January, he was ready for some intense coding sessions with fellow developers. Instead, he found a party. Even though bitcoin had fallen to a little more than US$800 from a high of US$1,127 in November, it had been worth less than US$100 as recently as August 2013. The Bitcoin community was feeling rich. “The parties were pretty extravagant — rooftop bars along Miami beach, that kind of thing,” Wood says. “For me at least, coming from a little northern town in England, it was pretty crazy.”
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With its virtual token called Kin, Kik thinks it's found a new way to monetize the Internet that could challenge Facebook, but entering the frothy world of initial coin offerings comes with some big risks
Read More >
Ice sculptures and dancing girls, however, weren’t enough for Bitcoin’s nouveau riche. They were on the lookout for the next big thing to invest in. A lot of them were looking at Buterin and seeing dollar signs. In normal circumstances, investors would not be begging a 19-year-old dropout, whose sole business experience consisted of running an obscure magazine out of his parents’ house, to take their money. Buterin may not have matched the image of a typical businessman, but he did fit another stereotype: the teen computer geek with a billion-dollar idea. The prospect of getting in early with the next Steve Wozniak or Mark Zuckerberg was highly appealing.
One night at the conference, Buterin gave a talk where he laid out his vision, wearing a black Ethereum T-shirt and speaking in an intense monotone. He received a standing ovation and was greeted by a lineup of people waiting to talk to him as he left the hall. His status as the prophet of cryptocurrency’s next big thing had been officially established.
With buzz building and dozens of people flowing through the rented house in Miami daily, Ethereum officially added three more founders: Wood, Joseph Lubin and developer Jeff Wilcke. Lubin, who had previously run a hedge fund and worked at Goldman Sachs, remembers worrying that some people were getting a bit carried away. “We were thinking about which island we should buy, because we needed a place for this new society to take hold. We were a little bit giddy,” he says. “A few of us … started thinking, ‘Hey, wait a sec.’”
One very good reason to “wait a sec” was to make sure they were complying with securities regulations. Taking money from unaccredited U.S. investors could open them up to charges from the U.S. Securities and Exchange Commission. “We thought it was possible we would land at JFK on a certain day and the FBI would tackle us to the tarmac,” Lubin says.
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