Vitalik Buterin,Smart contract,United States dollar,Cryptocurrency,Block chain (database),Bitcoin,Ethereum

2016 – a Year of Institutional Adoption, Hype and Drama for Blockchain

December 26, 2016

The world of blockchain based currencies and financial instruments is quite likely the most challenging field in business to summarize on a yearly time scale. It has the fastest changing ecosystem of companies and projects, with new cryptocurrencies rising up seemingly out of nowhere and disappearing just as fast. To unlock the Asian market, register now to theiFX EXPO in Hong Kong. At the same time the technology of the blockchain is also being used for disrupting many other sectors of the economy at such a speed that it’s hard to keep up with all the daily updates. For this we have chosen just four big stories that dominated the news this year and spanned 2016 as backdrop to everything else. Ethereum After a long period in which no altcoin got even remotely close to bitcoin in terms of adoption and market share, an innovative new contender emerged in 2016 in the form of the smart contracts cryptocurrency, Ethereum. On January 1st 2016 the price of Ether was around 93 cents, and its total market cap was just over $70 million. On March 31st the price of Ether was about $12 and its total market cap was around $910 million. This astounding growth forced ‘bitcoin only’ diehards to adapt to the new situation. By mid-June the price reached $19, the market cap of Ethereum topped $1.5 billion and it seemed that the creators of the smart contracts blockchain could do nothing wrong. But then the DAO came along. Looking to create an investment fund for early stage Ethereum ventures, such as its Ethereum Computer, created the DAO (Decentralized Autonomous Organization). During its 28 day crowdsale in May the DAO raised over $150 million in ETH from over 11,000 investors and the future couldn’t have looked brighter for, the DAO and Ethereum. In early June an Ethereum developer wrote publicly that he found a flaw that would allow hackers to target the DAO. On June 17th the attack began and the DAO was bleeding money fast. Reacting fast, the creator of Ethereum, Vitalik Buterin, called on everyone to spam the system to prevent any further transactions from taking place and called on miners to increase the gas price. The attack indeed stopped but not before the hackers siphoned away 3.6 million ETH. After the DAO debacle, the Ethereum blockchain underwent a hard fork under the leadership of Vitalik Buterin, as a measure to reset the system to its state before the DAO hack, but a renegade group of users refused to honor the new branch and splintered off. Now the Ethereum community is split between the official Ethereum (ETH) and the new ‘Ethereum Classic’ (ETC) with many accusations of foul play from both sides. Due to this the market value of Ethereum (ETH) sits at just $635 million at the end of 2016. Even with Ethereum Classic (ETC), which controls a market cap of $91 million, the two cryptocurrencies combined are nowhere close to the pre-DAO value. ICOs One of the most interesting and important stories in the blockchain sphere that remains almost completely under the radar of mainstream financial newspapers is how entrepreneurs created an alternative path to raise public funds with...

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