Alex Tapscott is chief executive of NextBlock Global
Bitcoin is the mother of all cryptocurrencies, and the most famous of them. Created by a person or people using the pseudonym Satoshi Nakamoto, it defined the algorithms that enable the transfer of assets from one party to another without an intermediary, such as a bank.
This helped to kickstart what we call the blockchain revolution. Yet despite its staggering growth – up 500 per cent in the past five years alone – bitcoin is likely to be eclipsed by an upstart called Ethereum that was developed by a twentysomething Torontonian.
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Ethereum's cryptocurrency has a name – ether – that most people have never heard of, outside of a chemistry lab. The total market value of all ether in circulation is $25-billion, not too far below bitcoin's $42-billion. Ethereum now has "the flippening" in sight, that moment in time when its value surpasses bitcoin's, something unthinkable only a few months ago.
Is ether simply riding the bitcoin wave of popularity as speculators flood the market for cryptocurrencies? After all, bitcoin's value has soared from $963 at the beginning of the year to $2,550 today, blowing past my own 2017 price prediction of $2,000.
Perhaps the culprit is Russian President Vladimir Putin, who some believe is buying up ether for himself or even building a digital ruble on top of Ethereum. These rumours started after Mr. Putin met with Ethereum's founder, Russian-Canadian Vitalik Buterin, at the International Economic Forum in St. Petersburg last month. Though the meeting may have piqued Mr. Putin's interest – and the opportunities for blockchain and central banking are indeed profound – the headlines in Vanity Fair, Bloomberg, and others about his master plan are probably overstated.
Something more fundamental is going on here.
Ether's value will surpa...