Glacier Quarterly 3 - 2018

BLOCKCHAIN
The experiment needed some kind of
token to be transferred between the
parties on the network and a way of
getting new tokens into the system.
A simple monetary supply mechanism
was set up and the first tokens were
issued. They needed a name and
because they were digital (bits and
bytes) and were meant to represent
some kind of monetary token (coins)
they were simply called bitcoins.
The transactions were batched to be
processed. These batches were called
blocks of transactions and each block
was linked to the previous block to
create a chain of blocks filled with
transactions. Although the word
blockchain was never used in the
original whitepaper, this chain of blocks
became known as a blockchain.
‘Pizza Day’
The experiment continued for over a
year, with more and more people
becoming interested in this unique
way of transferring tokens. Some
people even started collecting tokens
and building up stores of bitcoins.
Eventually in May 2010, on what is
now known as ‘Pizza Day’, a bitcoin
collector called ‘Laszlo’ offered 10
000 bitcoins to anyone who’d deliver
two pizzas to his house. He was
hungry and even specified a couple of
preferences! (https://bitcointalk.org/
index.php?topic=137.0). Two pizzas
were in fact delivered and from that
moment on, bitcoins had a value. If
10 000 bitcoins could buy you two
pizzas, they were no longer worthless.
Trading starts
More and more people started
participating in this growing
experiment and soon exchanges
were created (or converted) to allow
people to trade bitcoins for fiat
currencies. The most infamous early
bitcoin exchange was the Japan-based
Mt. Gox (Magic: The Gathering Online
Exchange), which was actually an
online card trading platform that was
converted to trade bitcoins.
Human nature soon reared its ugly
head and in 2013 it was discovered
that most of the bitcoins supposedly
held in custody by the Mt Gox exchange
had in fact been stolen. The
price of bitcoin, which had soared to
more than $1 000 per bitcoin, now
dropped to a little over $100.
Ethereum
Around this time a Russian-Canadian
teenager called Vitalik Buterin started
putting together a white paper
describing a new kind of blockchain.
It used many of the concepts of
bitcoin, but where the bitcoin blockchain
was specifically designed
for running a ledger based on a single
token, Buterin wanted to extend
that to provide a platform where
developers could create different
In the not-toodistant
future,
a cross-border
payment won’t
take two or
three days
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