New kid on the blockchain
Aug 30th 2017
Ask a friend to name a cryptocurrency and chances are they’ll say Bitcoin.
But can they name a second? Probably not, yet there are around 900 cryptocurrencies out there in the ether, with more being created all the time.
So far Bitcoin’s dominance has seemed pretty secure, but there is another ‘crypto’ gaining ground: enter Ethereum.
Ethereum is an open software platform using blockchain technology to enable developers to build decentralised applications. This includes the currency, ether, now the second highest valued digital money after Bitcoin.
So, is Bitcoin spent? And will Ethereum’s ether become the next big thing? We asked three of the UK’s top cryptocurrency experts for their views ether, and on cryptocurrencies in general.
“Bitcoin will be the main cryptocurrency for some time.”
Dr Catherine Mulligan, Co-director of Imperial College Centre for Cryptocurrency Research
The cryptocurrency space is exploding, but I think Bitcoin will be the main one for some time. It mainly provides a digital currency programme, whereas Ethereum is a powerful programming environment where contractual agreements can be embedded into the blockchain. Ethereum therefore offers more functionality that can be utilised for interesting projects. In Germany, it was used to create an automated contract negotiation system for charging of electric vehicles. However, due to the nature of its programming environment, it is a lot less secure.
There are rumours Bitcoin started here in the UK, so I don’t think we should be too surprised that the UK has a buoyant cryptocurrency sector. We have led in financial services and technology for the last 20 years, plus we have very strong fintech and regtech sectors.
Some kind of regulatory environment would be desirable to build on the work that has been done on cryptocurrencies here already. The UK government is looking into this, but other countries are moving fast. For example, since April, Japan has provided a stable regulatory environment.
These are exciting times because we are seeing the emergence of a new form of economic structure. Power is now connected to computers and digital technologies. Previously it was access to land, and subsequently capital. Now, we are entering a period where computational capacity is used to create wealth. As for whether Ethereum’s ether catches up on Bitcoin, we will just have to wait and see.
“Ethereum is a different paradigm.”
Elias Haase, Founder of B9lab Academy
Currency affects our lives, but we have very little say on fiscal policy. You can’t fork [change the direction of] the euro. With this technology you can, and I think that is positive and exciting.
Ethereum is a different paradigm to what has come before. One of its key ideas is that if a transaction is just a chunk of data, we can add code to it. Bitcoin seems to be developing into a store of value, whereas with Ethereum we don’t really know what it can do yet, so it is hard to judge what its future will be.
London has this overlap between finance and technology. The fintech sector is relatively strong, plus you have access to lots of developers and institutions. The Ethereum Foundation had offices here when they were building the first version. It’s an interesting thing because lots of areas, including Zug in Switzerland (also known as Crypto Valley), Dubai, Canada and the UK are jumping on this.
At B9lab we have been offering training in cryptocurrency since 2015. It is always framed around education. There’s an online academy and we provide offline courses for large corporations.
Cryptocurrency is not a game. The implications can be quite severe because we are building a technology that allows humans to delegate their own abilities outside of their own influence. Systems that can’t be stopped by any court in the world can be built. That is quite radical and is why we need to make sure people are well trained to mitigate potential damage.
“There is vast untapped potential for more locally-focused and locally-issued currencies.”
Jem Bendell, Professor of Sustainability Leadership at University of Cumbria
As a globally distributed operating system using a blockchain format, Ethereum is entirely different to Bitcoin.
I think cryptocurrencies will become mainstream because they offer opportunities banks cannot. The success of new projects, in terms of capital raised at pre-launch or launch, depends as much on PR and marketing as it does on either the technical merits or likely future utility.
The main benefits of cryptocurrency at present are experienced by those involved in tech startups in the field. The future impacts will be significant for incumbent businesses in many sectors and pose interesting challenges and opportunities for governments. There is a concerning lag in policy on how to shape this field of innovation for positive societal outcomes.
The Institute for Leadership and Sustainability’s free online course on the nature and future of money seeks to broaden understanding so that currency innovation can be influenced by a wider set of interests than entrepreneurs, venture capitalists and banks. There is vast untapped potential for more locally-focused and locally-issued currencies to support communities.