Ethereum
Vitalik Buterin and the Birth of Ethereum
In the fall of 2013, a nineteen-year-old Canadian programmer sat down to write a document that would reshape the cryptocurrency industry. Vitalik Buterin had spent the previous two years immersed in Bitcoin — writing for Bitcoin Magazine, traveling to developer conferences, and thinking hard about what a blockchain could do beyond transferring currency. By November 2013, he had crystallized an answer: a blockchain with a programming language built in, capable of running any computable program. He called his proposal Ethereum.
What followed was not just the launch of a new blockchain. It was the creation of a new category — programmable money, or more precisely, a programmable world computer — that would attract billions of dollars, thousands of developers, and a decade of innovation.
The Bitcoin Magazine Years
Buterin's path to Ethereum began with Bitcoin. In 2011, at seventeen, he encountered Bitcoin through his father, Dmitri, and became fascinated by the economics and technology simultaneously. He started writing about it and co-founded Bitcoin Magazine in 2012, becoming one of its first full-time writers and editors at an age when most of his peers were still in high school.
Bitcoin Magazine was not a trivial publication. It covered technical topics with genuine depth, and Buterin's articles demonstrated that he understood Bitcoin at the protocol level — the cryptography, the economics of mining, the nuances of the scripting system. He was not a hobbyist writing about prices; he was a serious student of the technology.
This deep engagement with Bitcoin is what led him to understand its limitations. Bitcoin has a scripting language, but it is deliberately restricted — it cannot loop, it cannot maintain state, it cannot implement the full range of financial logic that a general-purpose programming language can express. These restrictions are intentional safety measures, but they mean that complex financial applications cannot be built directly on Bitcoin.
The Colored Coins Limitation
Before proposing Ethereum, Buterin was involved with "colored coins" — a proposal to use Bitcoin's existing scripting system to represent arbitrary assets on the Bitcoin blockchain. A colored coin is a specific satoshi (Bitcoin's smallest unit) that has been designated as representing something else: a share of stock, a unit of gold, a claim on real estate.
Colored coins could work for simple asset issuance and transfer, but they hit a wall when you tried to build more complex financial logic on top of them. You could transfer a colored coin representing a stock share, but you couldn't write a decentralized exchange, a lending protocol, or a prediction market using Bitcoin's scripting primitives. The language simply wasn't expressive enough.
Buterin proposed adding more expressive capabilities to Bitcoin's scripting system. The response from Bitcoin's core developers was essentially: no. Bitcoin's conservatism about changing its consensus rules — a conservatism that many view as a strength — meant that the kind of radical expressiveness Buterin was proposing would not be added to Bitcoin. He needed a different approach.
The 2013 Whitepaper
In November 2013, Buterin wrote the Ethereum whitepaper and circulated it to a small group of friends and developers. The response was immediate and enthusiastic. The document described something that felt simultaneously obvious in retrospect and genuinely novel: a blockchain that included a Turing-complete virtual machine — the Ethereum Virtual Machine (EVM) — capable of executing arbitrary code stored on-chain.
The core insight was simple. Bitcoin's scripting language limits what you can do on the blockchain for safety reasons. But what if instead of restricting the language, you restricted execution through gas — a metering system that charges for every computational step and terminates any computation that exceeds its gas limit? Turing completeness becomes safe when you can always bound execution cost.
The whitepaper described contracts — programs stored at blockchain addresses — that could hold funds, respond to transactions, modify state, and call other contracts. This was not a modest proposal. It was a claim that any computable financial logic could be implemented as a trustless, censorship-resistant program running on a shared global computer.
The Key Sections
The whitepaper methodically builds the case for Ethereum. It describes a state machine where the state is a mapping of addresses to accounts, and where transactions trigger state transitions by executing EVM bytecode. It specifies how gas pricing works, how contracts are deployed, and how value flows between accounts.
Crucially, the whitepaper also describes applications. This was not an abstract technical document — it showed what Ethereum could be used for. Financial derivatives, decentralized autonomous organizations, on-chain governance, non-fungible tokens representing real-world assets, decentralized storage and computation. The applications section reads today like a prophecy: nearly every major category of blockchain application in 2024 was anticipated in Buterin's 2013 whitepaper.
The Co-Founders
Ethereum was not a solo project. Buterin's whitepaper attracted a remarkable group of co-founders who brought complementary skills.
Gavin Wood, a British computer scientist, wrote the Ethereum Yellow Paper — the formal technical specification of the EVM — and created the first Ethereum implementation in C++. He later invented the Solidity programming language, which became the dominant language for Ethereum smart contracts, and went on to found Polkadot.
Joseph Lubin, a Canadian entrepreneur with a background in finance and technology, brought organizational and business-building skills. He later founded ConsenSys, the largest Ethereum development company.
Anthony Di Iorio had been instrumental in connecting people in the early Canadian Bitcoin community and helped fund early Ethereum development. Charles Hoskinson, who later founded Cardano, was involved in the early months before a parting of ways with Buterin over the question of whether Ethereum should be a for-profit or non-profit entity. Mihai Alisie, Amir Chetrit, and Jeffrey Wilcke rounded out the founding group.
The diversity of the founding team — academic, entrepreneurial, technical, organizational — reflected the scope of what they were trying to build.
The 2014 Crowdsale
In July and August of 2014, the Ethereum Foundation conducted what was then one of the largest cryptocurrency crowdsales in history. Buyers sent Bitcoin and received Ether (ETH) in return — 60 million ETH distributed to crowdsale participants, with an additional 20% retained by the foundation for development.
The crowdsale raised approximately 31,500 Bitcoin, worth about $18 million at the time. The funds allowed the team to hire developers, run infrastructure, and organize the months of work required to build a production blockchain from the whitepaper's specification.
The crowdsale was also legally novel territory. The Ethereum Foundation took the position that Ether was a utility token — access to computation on the Ethereum network — rather than a security. This framing would be debated and litigated for years afterward across the entire cryptocurrency industry.
dao-hack">Mainnet Launch and the DAO Hack
Ethereum's mainnet launched on July 30, 2015, in a release called "Frontier." The network was functional but raw — intended for developers rather than general users. Subsequent releases (Homestead, Metropolis, Constantinople, and later the Merge) added stability, features, and eventually the transition from proof-of-work to proof-of-stake.
The first major crisis came in 2016. The DAO, a decentralized autonomous organization running on Ethereum, had raised $150 million in Ether when an attacker exploited a reentrancy vulnerability in its smart contract code and drained approximately $60 million worth of ETH. The Ethereum community faced an unprecedented choice: let the theft stand (preserving the principle of code immutability) or hard-fork the blockchain to reverse it (preserving the economic interests of DAO participants).
After intense debate, the community voted to hard-fork. The minority who rejected the fork continued the original chain as Ethereum Classic. This event remains the most significant philosophical controversy in Ethereum's history, touching fundamental questions about whether "code is law" and whether a blockchain's social layer can or should override its execution layer.
Buterin's Continued Role
Unlike Bitcoin's anonymous Satoshi, Ethereum's founder is a constant public presence. Buterin continues to write extensively about Ethereum's direction, publishes research on cryptography and mechanism design, and engages with critics directly. His blog posts and forum comments often arrive ahead of formal proposals and shape the direction of protocol development.
The Ethereum community's relationship with Buterin is complex. He is not a dictator — Ethereum's development is distributed across many organizations and individuals — but his influence on technical direction is substantial. He has been unusually willing to acknowledge his own mistakes, including his early proposals that were later revised, and to credit others for key contributions.
Buterin dropped out of the University of Waterloo's computer science program in 2014, supported by a Thiel Fellowship, to work on Ethereum full-time. He was twenty at the time. The whitepaper he had written at nineteen launched an ecosystem that, a decade later, processes billions of dollars in transactions daily. It is one of the most consequential technical documents produced by a teenager in history.