The latest kid in town gunning for the position of ‘next big thing on the internet’ is a new network called Ethereum. I’ve been reading up on it lately, partly because I love reading about new ideas, partly because of it’s potential for social innovation (my buzzword of the week after spending time at the Unusual Suspects Festival) and also in part because the project’s branding is super, super slick:
Ethereum describes itself as:
A decentralized platform that runs smart contracts: applications that run exactly as programmed without any possibility of downtime, censorship, fraud or third party interference.
But what exactly does that mean?
Well it would appear that in many ways it is acting as nothing less than an alternative to the World Wide Web.
You mean a whole new internet?
No, the world wide web is a part of the internet. In the world wide web, all the information is stored on servers which are typically accessed using web browsers using a system called ‘Hypertext Transfer Protocol’ (you may be familiar with the letters ‘http’ – that’s what they stand for).
Ethereum works differently in that there is technically no need for servers. Instead, the network is distributed across all the computers belonging to the people using Ethereum.
In addition, Ethereum isn’t just designed to display pages of content. It wants people to create apps to use on it. Apps on the Ethereum network are known as DApps – short for ‘Distributed Applications’. These are programs that are connected to the internet that can handle transactions but which don’t require a server to be running somewhere in order to work.
Transactions carried out on the network are handled using blockchain technology, i.e. the same technology that keeps track of Bitcoins allowing Bitcoin transactions to be made.
Finally, the system is powered by a thing called ‘Ether’, which stresses heavily that it is not a cryptocurrency like Bitcoin. Instead it makes the analogy that if Bitcoin is like gold, then Ether is like oil – primarily a fuel and not a commodity. Every transaction that occurs within Ethereum requires a transaction fee (the lingo for this fee is ‘the gas’) which is paid for using Ether. Users also have the option to create their own cryptocurrencies.
Ethereum services will be made accessible by using a special browser called ‘Mist’ which will display both pages from the world wide web and also DApps from Ethereum.
What does this all mean?
Well it means that there are no middle men between the user and the DApp. This means that there is no need to go through a hosting provider (as you would for a website), a social network (as you would Facebook, Google or iOS apps), or a cloud computing service (as you would for other types of software) to provide or receive an online service. The plan therefore is that there are fewer barriers to entry for people wanting to provide services and services can’t simply be taken down if someone doesn’t like them.
Is that safe and ethical?
Um… I don’t know. The cynic in me is reminded of a few things that have been done on unegulated networks, such as BitTorrent, which is primarily used for the distribution of pirated software and movies, and the Silk Road, which was an online market place for drugs and weapons on the anonymous, heavily encrypted Tor network.
On the other hand, the potential for social networks not run by the information oligarchs of the world wide web like Facebook and Google is interesting. The idea of software and services that organisations can use without needing to sign up to third parties could change the way a lot of organisations are run. Most of all, the potential for creativity is there in abundance.
The platform also has a number of systems in place to prevent against fraud and to keep funds in escrow accounts to ensure that transactions are completed properly.
There are a number of organisations already using it: Augur promises to provide forecasting on politics, commerce and technology through the wisdom of crowds; Digix is an assett management organisation; WeiFund is a crowdfunding platform and HitFin trade derivatives. Even Imogen Heap has been taking an interest in it’s potential as a solution to copyright infringement. There are many more and that’s only 100 days after Ethereum’s release.
Who will be the Mario of Ethereum?
However, in order to be successful, Ethereum will need a Mario. I’ve used the Mario analogy to describe augmented reality before, and I’ll use it for Ethereum.
No one bought the Nintendo Entertainment System to play Duck Hunt. However, when people started to discover that Super Mario Brothers was a fantastic game, then people flocked to the shops to buy the NES, and once they had that, they started playing Duck Hunt as well as all the other games that were released for that platform.
In the same way, we won’t see Ethereum properly taking off until someone writes the program that will make them the Mario of Ethereum. Who will it be? What will it be? That’s what excites me about this project.