Friday, 27 October 2017

Ethereum - don't do what I did

Ethereum, Bitcoin and other cryptocurrencies are increasingly in the news. You may see in this an opportunity to get in on something that may turn out to be big (or all manner of mishaps may happen to it). However it's interesting enough to put an amount of money into it that wouldn't hurt you much if you lost it all.

Ethereum is interesting because it's not just an alternative currency (although it has value), it's a platform on which what are called 'smart contracts' are written. The idea is to write contracts in code on top of the blockchain (ethereum's existing distributed ledger) making contracts enforceable automatically and (presumably) avoiding the necessity of going to law in the case of disputes. That is, both the rules and the execution of the contract are encoded, and the code is tamper-proof, so no external arbitration is required. That's the theory anyway, and it does depend crucially on the code not having exploitable loopholes.

Anyway, long story short, it might be a good although high-risk investment. In my naivete I went to the official site at on the basis that this is all new and there are no doubt some scams out there, so might as well go to the source. If you scroll down you will see that you can download the wallet free. A wallet is somewhere you can keep cryptocurrencies. Using the wallet I purchased a modest quantity of ether (the cryptocurrency). From my experience with Bitcoin I did not expect the amount to show up in my wallet immediately, as these things generally take between a few minutes and an hour. I ran the thing day and night from 11 September until I gave up on 9 October and my ether still did not appear in my wallet. This was because the software was still trying to synchronise with the entire blockchain.

At various points I went to the user community discussion forum discussing this very problem. Although people were mostly kind I was told more than once that this was not the correct forum. I could not understand why people were spending any time on this piece of software that clearly wasn't working for any of them. Anyway I persisted and eventually a user gave me enough information to rescue my ether to the point where if I want to convert them back to regular money I probably can.

So if any of this makes any sense to any of you, take heed, and if you want to play around with this, don't invest a lot of money in it until you understand what you are doing.

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