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Bitcoin: Blockchain and Bitstamp Add Ethereum

Aug 17, 2017

Ethereum, a cryptocurrency network and rival to Bitcoin, continues to gain steam in the virtual money world.

Two of the longest-operating cryptocurrency businesses said Thursday they will customers to start buying, selling, and exchanging Ether, the cryptocurrency associated with Ethereum. The companies are Blockchain, a London-based Bitcoin wallet provider, and Bitstamp, a Bitcoin exchange based in Luxembourg.

The move signals a growing acceptance of Ethereum, created in 2014 by Vitalik Buterin, a Russia-born programmer who appears on this year's Fortune 40 Under 40 list (you can read more about him here). Ethereum has been responsible for a massive explosion in enthusiasm for cryptocurrency and digital token assets this year.

The cryptocurrency market has soared to more than $140 billion in terms of total value from under $20 billion at the start of the year. Ethereum now represents about $28 billion of that value versus Bitcoin's nearly $71 billion, according to data from CoinMarketCap, a site that tracks the sector.

Industry watchers have warned that the market for cryptocurrencies has all the trademarks of a bubble, but this has not diminished the excitement of its boosters.

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At Fortune's Brainstorm tech conference in Aspen, Colo. this summer, Peter Smith, Blockchain's CEO, said that he had only recently warmed up to Ethereum. In an email to Fortune following today's news about his company's adoption of Ethereum, he said: " The Ethereum community, ecosystem and technology has really matured over the last year, so we felt confident introducing it to our users. We're excited about Ethereum's potential."

In addition, Blockchain has partnered with Shapeshift.io, a cryptocurrency exchange based in Switzerland, to allow customers to trade between Bitcoin and Ethereum more seamlessly.

Nejc Kodrič, Bitstamp's CEO and co-founder, echoed Smith's sentiment about the growing demand for Ether. "Ether has shown significant promise, driving customer demand for inclusion in our exchange," he said in a statement provided to Fortune.

Kodrič said that customers would be able to trade Ether on Bitstamp with no transaction fees until Oct. 1. He added that there would be "steep discounts" until next year, too.

Some cryptocurrency companies have been treading cautiously when it comes to adopting new virtual currencies, careful to shore up their security before adding new assets (Bitstamp was hacked to the tune of $5 million in 2015) and to avoid ruffling the feathers of regulators. Indeed, the SEC recently sent a warning shot over the bow of the exuberant sector, making known that it intends to apply existing financial laws to the booming market.

Coinbase, the most well-established crypto broker in the U.S., began allowing customers to buy, sell, and store Ether a year ago. The company recently became the first cryptocurrency unicorn, meaning a startup valued at $1 billion or more, after raising $100 million in funding earlier this month. (You can read about Brian Armstrong, Coinbase's CEO, on this year's 40 Under 40 list. He shares the No. 10 spot with Buterin.)

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