The data is then copied by thousands of computers in the form of “blocks”. It is these lines of code that form the blockchain. To add a block, several machines must agree and solve a complex equation. A mathematical puzzle made to ensure network security. “At the start, it was above all a question of creating a decentralized network”, explains Jérôme de Tychey. More precisely, a “world computer” of which no group could take control, nor modify the code, without obtaining the consensus of all the other members.
Foundation status
A technological utopia? True to the spirit of the free internet, Ethereum’s source code is open. It doesn’t belong to anyone. “It is a garden in which each member is a gardener”, sums up the Ethereum foundation. Updates are decided collectively during major conferences, the “Devcon”, in which volunteer developers participate. But also companies, like ConsenSys. The last one took place in Bogota, Colombia.
To ensure that no one takes control, the realization of this project has been entrusted to a non-profit foundation based in Switzerland, on the shores of Lake Zug. Because Ethereum is not a business. “The foundation has no share capital, and therefore no shares, explains specialist lawyer Daniel Arroche, of the firm D & A Partners. This allows it to escape the regulations in force on financial securities. “
To date, the foundation is financed exclusively by the sale of its own virtual currency, Ether, from which it has accumulated a war chest. While its value did not exceed $0.42 in 2015, this digital asset invented by Vitalik Buterin is trading today at more than $1,300. “Ether has established itself as the second most used cryptocurrency behind Bitcoin”, confirms Vincent Boy, market analyst at IG France. A feat, while the crypto market is going through a long winter.
Dozens of start-ups hosted
Far from financial speculation, the Ethereum protocol serves as a support for most decentralized finance (DeFi) applications that allow borrowing or lending cryptocurrencies, but also to participate in autonomous organizations (DAO), some of which pursue philanthropic objectives or finance scientific research missions.
Among institutions, several central banks have already launched pilot projects to issue a digital version of their currency. Ethereum also hosts the projects of dozens of start-ups, such as that of the unicorn Sorare or the subsidiary of EDF, Exaion, in France. “Anyone is free to develop their projects there”, summarizes one of the members of the foundation, who prefers to remain anonymous like many of his followers.
It is also on Ethereum that more than 90% of the NFTs issued to date are based. These non-fungible tokens have been made famous by virtual works of art, such as the Bored Apes Yacht Club: the value of these images of monkeys has reached over $600,000. American rappers like Eminem or Snoop Dogg snatch them at a high price.
Read also The truth about the euphoria around NFTs
A speculative bubble contrary to the values defended by the ascetic Buterin. An idealist to the nail, the Russian-Canadian computer scientist had no intention of encouraging such speculation, nor of enriching anyone. “I have nothing against these monkeys, he regrets. I would only like them to be used to finance common goods.” In fact, the proposed applications – essentially financial – have largely deviated from the founding ideals.
Less energy intensive
Moreover, if Ethereum is open to all projects, it requires constant computing power. “A new block is validated every ten seconds”, details Antoine Estienne, developer and consultant on the blockchain. A capacity that currently limits its operation on a large scale. On December 9, it thus reached its peak of activity: in one day, 1.9 million operations were carried out. Result? Traffic jams are not uncommon here.
Computer enthusiasts are working to make this protocol more efficient. In September 2022, a first step was taken: from now on, there is no longer any need to have computers work against each other to validate new blocks. The “miners” – those who carry out the validation – undertake to advance 32 Ethers (about 47,563 euros, if we rely on its valuation in January) to carry out this work, and guarantee that no one cheats when new information is added to the database.
And it was time! Because the energy consumption of cryptocurrencies is one of the criticisms regularly addressed to the sector. This update, called The Merge, has already changed the situation. It makes Ethereum less electricity-intensive, making it one of the most virtuous blockchains alongside its competitors, Cardano or Solana. A “green option” that is now attracting more traditional investment funds, says a study by Bank of America.
But another hurdle still needs to be overcome. Because if Ethereum does not charge for its services, its operation has a cost. Each transaction involves fees. “It’s called gas”, deciphers Jérôme de Tychey. However, these commissions are currently among the highest on the market, ranging from 1 to 200 dollars per transaction. A point that should be fixed in the next update, The Surgeexpected this year.
Vitalik Buterin, an anti-Elon Musk
Do not rely on his adolescent air, nor his jerky delivery. At the age of 28, Vitalik Buterin is one of the most influential personalities in the crypto world. And of the richest: in November 2022, his fortune was estimated at $450 million, despite the fall in the price of cryptos.
Revered as a prophet, this precocious genius started computing at the age of 4 after being introduced to it by his father. With his family, he left his native Russia the following year for Canada, where he made the discovery of his life: Bitcoin. Buterin will challenge himself to improve the bitcoin protocol and create a blockchain where users can not only exchange currency, but also develop applications and execute automatic contracts (smart contracts). Her name ? Ethereum.
But Buterin refuses to have his name associated with it, as if he were the sole founder. “Vitalik does not seek the light”, confides to us one of his relatives. He only expresses himself through his work.” The little genius indeed remains attached to the collaborative nature of the blockchain and refuses to take responsibility for what happens there. “It’s the essence of a system where no one governs”, he justifies himself in a podcast. Consistency to the end.