Wall Street and tech start to move past bitcoin

Ethereum, the development of which CNBC reported on in 2014, is a decentralized platform running on its own blockchain (not bitcoin’s) that allows for developers to create blockchain-based applications. The Ethereum Foundation emphasizes on its website that ether is not meant to be competition to bitcoin, nor is it “intended to be used as or considered a currency, asset, share or anything else,” but that desire has apparently been ignored. The dramatic price increase shows that some are speculating on ether, and a recent New York Times report called Ethereum a “rival virtual currency” to bitcoin.

“I’m excited about Ethereum, I’m excited about the community,” Silbert said, but he acknowledged that he is concerned about the dramatic price increase. “Quite a bit of speculative trading is going on in ether without there yet being a way to calculate the fundamental intrinsic value of it.”

If those buying ether believe it will be used as fuel to pay for new applications’ computing costs, it’s unclear how much will be needed in this early stage of the ecosystem’s development, Silbert said, so valuation is impossible. On the other hand, he added, the use-case for ether as a better means of exchange than bitcoin does not yet exist, and there’s been no decision on the final system of supply (unlike the bitcoin protocol), so it’s risky as a speculation.

Still, those buying up ether are not the first to see potential in the Ethereum platform.

One source with knowledge of Ethereum’s beginnings told CNBC in 2014 that some investment offers valued the project at about $500 million, and that Google Ventures was one of the interested parties. “That’s a big number, isn’t it? That’s an impressive number?” Ethereum’s then-chief communications officer Stephan Tual said about the figure, adding that “I don’t think the concept would work if we had accepted money.”

IBM, Microsoft, JPMorgan, Barclays, UBS and others have been tied to projects using all or part of Ethereum’s technology.

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