Yesterday, at midnight (CEST), Ethereum launched the presale of its much-anticipated, platform-specific altcoin, ether.
The surprise announcement caused something of a stir in the community and the response has been extremely positive, with over 7 million ether (ETH) sold after approximately 12 hours.
Switzerland-based Ethereum and The Ethereum Project have made headlines this past year as potentially exciting examples of ‘Cryptocurrency 2.0’, a term that refers to new applications built upon block chain technology.
Ethereum is both a platform and a programming language that is aimed to make it possible for developers to build and publish applications that do not require trust in third parties to run.
Ether is commonly referred to as the ‘cryptofuel’ that runs the applications on Ethereum’s decentralized network. In practice, ether will be required by anyone wishing to build upon or use the Ethereum platform, and are, at this time, mostly suitable for people looking to develop or distribute decentralized applications
People have been waiting since Ethereum’s announcement in January at Miami’s North American Bitcoin Conference to purchase the tokens.
Funding development
According to Ethereum, those purchasing ether now will lock in their supply at a known price, even though the actual coins will not be available until the genesis block is mined, sometime in the winter of 2014-2015.
While this makes this sale look like a crowdfunding operation, the company maintains it is a pre-sale event for a product, with funds going towards financing the continued development of the software platform.
“You are trusting us to take the bitcoin and use it to develop Ethereum,” said Buterin. “But we hope that after watching our development for six months you have been convinced that we are technically capable of pulling this off.”
Ether can currently be purchased at a set rate of 2,000 ETH per 1 bitcoin. The price will stay at this rate for two weeks and then linearly decrease in value down to 1,337 ETH per BTC. The sale will last 42 days in total.
Ethereum has made it clear that ether is not to be viewed as an investment like bitcoin and offered the following disclaimer on its blog:
˝Ether is a product, NOT a security or investment offering. Ether is simply a token useful for paying transaction fees or building or purchasing decentralized application services on the Ethereum platform; it does not give you voting rights over anything, and we make no guarantees of its future value.˝
Block chain vision
Ethereum is the brainchild of Vitalik Buterin, a former college student who, fascinated with bitcoin, spent a year traveling around the world and learning about the possibilities of the technology.
Buterin saw that all the various block chain projects were focused on developing altcoins with varying features, but that this was a limitation of the block chain’s potential. So he eventually came up with Ethereum, which offers a way for people to connect through trustless distributed applications on its own block chain.
Besides Ethereum, Buterin has been involved in several notable projects including Bitcoin Magazine, Dark Wallet and KryptoKit. He was also recently awarded a Thiel Fellowship, with an accompanying $100,000 to put towards his current and future projects.
The company’s primary base is in Zug, Switzerland, but it has additional bases in Toronto and London, with more to come. The organization spans the globe, however, with communities and meetups in Canada, the US, Asia and even Africa. “We are a geographically distributed organization,” Buterin explained.
The choice to base Ethereum in Switzerland was an easy one: the country is known for its cryptocurrency-friendly regulatory environment and accessibility to government officials.
Image via Ethereum