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When Vitalik Buterin, founder of the Ethereum blockchain platform, was about six years old, he already knew the value of Pi to about 30 digits.
“Here people teach children to memorise Pushkin poems; I learned 3.14159265359…” the 23-year-old programmer admitted, laughingly, to a packed audience at the Skolkovo Technopark on Thursday.
Hundreds of people came to the Skolkovo Technopark on Thursday to hear Vitalik Buterin speak. Photo: Sk.ru.
Years later, that interest and skill in maths and computer programming would lead Buterin, who was born in the Moscow-region town of Kolomna but emigrated to Canada with his parents as a child, to propose Ethereum as an open-source decentralized platform for apps running on the digital ledger blockchain.
The growing interest in and importance of that technology was palpable during Thursday’s event, dubbed “an open conversation with Vitalik Buterin.” When Buterin first visited Skolkovo last May for a blockchain conference, about 300 people came. Ethereum, which was launched in 2015 after a crowdfunding campaign that raised more than $20 million in the first two weeks, was then worth about $900 million. Today it is valued at $36 billion, and an estimated 700-800 people came to Skolkovo to hear Buterin speak, prompting a tailback of traffic leading up to the innovation city.
The programmer’s star status has reached the stage that he was recently the subject of a death hoax. “That was fun,” said Buterin of the false reports of his own death.
How blockchain conquered the world
The aim of last year’s event was to lay the foundations for a community in Russia of programmers and startups using blockchain technology, and that goal has certainly been achieved, both in terms of quantity and quality, Buterin and Skolkovo’s head of cloud and fintech, Pavel Novikov, agreed Thursday. The creation of a Russian Association of Cryptocurrencies and Blockchain was announced on Wednesday by German Klimenko, an advisor to Russian President Vladimir Putin, with the aim of integrating blockchain technologies into the state economy and legalising the use of cryptocurrencies.
Governments around the world are grappling to regulate digital currencies. Following earlier attempts to ban bitcoin, Russian authorities have now said they want to regulate – and tax – cryptocurrencies. Putin was the first head of state to meet with Buterin, the IT visionary noted Thursday.
Buterin, centre, leaving the Skolkovo Technopark flanked by Skolkovo fintech director Pavel Novikov (left) and Ethereum advisory board member Vladislav Martynov (right). Photo: Sk.ru.
When Buterin quit university studies in Canada several years ago to travel the world and see what kind of blockchain projects existed abroad, the community in Israel was the most impressive, he recalled.
“They understood even back then that blockchain could be used not just for cryptocurrencies, but for many other applications,” he said.
Now blockchain technology is being used in a whole spectre of areas, from finance and digital security to crowdfunding and land and legal registries. It is expected to be used increasingly in mortgage and loan records, in public records such as birth and death certificates and passports, and for voting and medical records.
John Schmidt, director of aerospace and defense at the innovations consultancy Accenture, said at this year’s Paris Airshow that blockchain was the next great innovation in aeroplane maintenance due to its detailed data of factors such as engine usage.
"Blockchain is in effect a single federated ledger that everybody who uses and touches that engine could use it as a single point of truth of what has happened to the engine," said Schmidt.
Buterin writing a message for pupils of the Skolkovo International Gymnasium, which reopens in new, purpose-built facilities for the new school year on Sept. 1. Photo: Sk.ru.
Proving the impossible
When Buterin wrote a white paper in 2013 proposing a “next generation smart contract and decentralised application platform,” there were those who doubted it could work, he recalled.
“The first person to think it was impossible was me,” he said. “It seemed like the idea, if it were possible, was clearly really cool, but no one had done it anywhere before. I thought there must be a reason for that.”
Buterin and his co-founders went on to prove that it was more than possible, and just two years after its launch, Ethereum is valued at $36 billion. Buterin was included in Fortune Magazine’s 40 Under 40 list last year. Yet there are still those who believe that cryptocurrencies and blockchain are overhyped. In Russia, where memories of the gigantic – and disastrous – pyramid schemes of the ‘90s are still painful for many, there is scepticism surrounding the technology, even among some young entrepreneurs.
“There is an opinion that it’s all a pyramid, that it all rests on faith, and if the faith disappears, there’ll be nothing left,” said Vladislav Martynov, a member of Ethereum’s advisory board.
“That’s not the case … There are concrete things, assets, that guarantee the value; it’s not a bubble. Firstly, it’s very serious technology, which people didn’t even believe in recently. It has appeared, and it works, and it’s an asset. Secondly, is the team. Many said it was impossible to create a universal blockchain platform, people said it was impossible to do it that quickly, and the team headed by Vitalik has done it. He proved it’s possible, and that’s also an asset.”
Buterin's note for Skolkovo Gymnasium pupils: "Vitalik was here." Photo: Sk.ru.
The alliances being forged between major banks and corporations to test blockchain technology, and the funds being allocated to test versions of national cryptocurrencies are also assets, said Martynov, along with the many startups springing up in this field.
“The funds collected by ICOs [initial coin offerings in cryptocurrencies] are growing quickly, and they are also an asset. Yes, there’s a lot of speculation [on cryptocurrencies], the rate will rise and fall, but not because there are no assets.”
In answer to a question about startups or any other company planning an ICO, Buterin had just one piece of advice.
“If your team are crooks, please don’t hold an ICO,” he said.
Following a question and answer session with Buterin, four Skolkovo startups using blockchain technology were given five minutes each to present their solutions to Buterin and Martynov for feedback. They were Scorista, which has devised a decentralised credit bureau for cryptobanks; Brainysoft, which allows people to send secure international payments using blockchain while adhering to the national regulations of the countries in question; Loyken, a blockchain-based loyalty network devised by Koshelok, the same team behind CardsMobile; and TalkBank, a “robot/chatbot bank” in which customers perform all transactions via existing messenger apps such as Telegram, and which uses blockchain technology to keep records and create a unified banking system for different countries.
Buterin said the projects were interesting and had potential.
The event “In Conversation With Vitalik Buterin” was sponsored by Tinkoff Bank and Sberbank Technologies.