“PLEASE DM A SLOCK.IT MEMBER ASAP!!!” he continued, addressing stakeholders in a blockbuster venture codeveloped by the company, the DAO (pronounced like the Chinese philosophical tenet), which had been hailed as the most successful crowdfunded project of all time. Three people replied immediately: “Uh oh.” “What is going on?” “Oh shit.”

Green waited another half-hour before adding, “We aren’t sure what is happening but the DAO is in an emergency situation.”

The letters in DAO stood for decentralized autonomous organization, and the idea was that the startup would be a new type of corporation—built on the technology that powers cryptocurrencies, such as Bitcoin—with algorithms executing the strategy instead of human managers. Specifically, its coders intended the DAO to function like a venture capital firm—a kind of Kickstarter-like Kleiner Perkins.

A month earlier thousands of investors had plowed some $160 million into the experimental company. Their contributions were made in Ether, a year-old digital currency (and rival to Bitcoin) that they had exchanged for virtual tokens. The DAO’s creators had designed the software to execute the will of its token holders, based on a tally of their collectively computed votes.

The investors had been assured the money was safe when they deposited it in the DAO. The network powering it was “more secure than every bank put together,” Stephan Tual, one of the DAO’s originators as well as a cofounder and the chief operating officer of Slock.it, had boasted during the project’s funding campaign.

But now a hacker had broken in and was in the process of pilfering their funds. Green recommended that constituents spam the network—clogging its pipes—to slow down the thief. “Yeah sorry guys. this is not a drill,” Green added lamely.

In the chatroom, emotions ran high. “Are we fckd?” one person asked. “Man what a epic failure,” ranted another. “I’m in the bathtub, about to throw a toaster in!” said a third. Another person summarized: “:fire: :fire: :fire: :fire: NOBODY PANIC :fire: :fire: :fire: :fire:” Many drew comparisons to Mt. Gox, a Japanese virtual-currency exchange—once the largest of its kind—that had collapsed in a catastrophic $460 million hack two years prior. Were they now watching the DAO implode too?

By the time Slock.it had regained control the next day, the hacker (or hackers) had stolen more than $50 million—nearly a third of the DAO’s funds. As people scrambled to make sense of the calamity, one name rang out in the forum. “Where is Vitalik?” asked one. “Wake up vitalik,” pleaded another. “Vitalik, our alien overlord, please save us.”

“Calm down,” came a reply. “Vitalik is working on it.”

A month after the hack—and mere days after presiding over a controversial vote to initiate a “hard fork” process that would recover the DAO’s stolen funds and make whole its backers—Vitalik Buterin is listening impassively to a guy wearing a beanie cap shaped like a Pokémon dragon. “This is a really tricky game,” says the man in the hat, an assistant professor of computer engineering, as he excitedly begins to lay out a complicated logic puzzle. But before he can get too far, Buterin quietly interrupts with a clever solution. “Oh,” says the Pokémon prof, crestfallen. “That’s actually pretty cool.”

Buterin (No. 31 on 2016 40 Under 40 list), a 22-year-old coder, is visiting the Cornell University campus for a boot camp organized by IC3, or the Initiative for Cryptocurrencies & Contracts, an academic consortium that researches peer-to-peer payment systems. Roughly two-dozen programmers are gathered around a long conference table inside Gates Hall (as in Bill and Melinda), the brand-new, steel-plated home to Cornell’s computing and information science departments. The air is thick with talk of “stochastic dominance,” “Merkle trees,” and “zk-SNARKs.”

Although he’s among the youngest in the room, Buterin is indisputably the star of the group. He is, after all, the wunderkind creator of Ethereum, the network on which Ether runs. And Ether is now the biggest rival to Bitcoin, the $10 billion cryptocurrency that mysteriously burst onto the scene less than a decade ago.

Since its launch last year, the total value of Ether has rocketed from nothing to nearly $1 billion, easily outpacing every other virtual-coin contender. (There are hundreds.) Yet the promise of the technology Buterin has built extends far beyond its possibilities as a speculative digital currency. Ethereum’s boosters believe the network could someday power a host of decentralized applications—censorship-free social networks, public utility ride-hailing apps, crowd-sourced prediction markets and investment firms, even governments.

Buterin’s creation is already making inroads beyond the coder set. Fortune 500 companies have begun trials with the technology. Last year Samsung and IBM (IBM) launched a project to coordinate Internet-connected devices, like washing machines and lightbulbs, over an Ethereum-based network. At the beginning of this year 11 banks—including Wells Fargo (WFC), Barclays (BCS), UBS (UBS), Credit Suisse (CS), and HSBC (HSBC)—ran a financial services pilot program using Ethereum. Microsoft (MSFT) and Deloitte have been facilitating experiments on the network too.

“I’m very excited about Ethereum,” says Chris Dixon, a general partner at Andreessen Horowitz, a venture capital firm in Silicon Valley that got into the Bitcoin game early on. “It’s probably the most exciting thing that’s happened in the whole space in a couple of years.”

Mark Russinovich, chief technology officer of Microsoft Azure, the tech giant’s cloud arm, echoes Dixon’s enthusiasm. “What’s great about Ethereum is that it is open, flexible, and can be customized to meet a customer’s needs,” he says.

If it sounds as if Ethereum is destined to be Silicon Valley’s latest billion-dollar startup, however, think again. Because Buterin isn’t your typical entrepreneur. He isn’t backed by VC money and he isn’t even based in the Valley—in fact, he’s a vagabond who more or less lives out of a backpack and crashes on couches wherever he happens to be coding. Rather than setting himself up for an IPO payday in the future, he has structured his “startup” as a nonprofit foundation based in Zug, Switzerland. In his role as Ethereum’s chief scientist, Buterin looks to Linus Torvalds, the firebrand inventor of Linux, an open-source computing system that powers many operating systems today, as inspiration.

In that sense, Buterin represents a challenging archetype for the banks and investors lining up to invest in the potentially world-altering technology underlying cryptocurrencies: the unprogrammable programmer.

BOLD VISION: Buterin wants to use his technology to radically re-architect the web, upending the current power structure. In the near future, he believes, entire companies could be controlled by crowdsourced algorithms rather than executives.Photograph by Julie Glassberg for Fortune

He certainly doesn’t come across as Wall Street’s ideal business partner. On the day I meet him, Buterin, tall and skeletally thin, is wearing a wrinkled T-shirt promoting open-source software and a pink-and-purple-striped Swatch wristwatch with a smirking Cheshire cat on its face. He tends to reply to questions in a voice so measured that it almost sounds computer generated.

But if his affect is flat, Buterin’s ambition is anything but muted. He says his ultimate goal is to use Ethereum to radically re-architect the web—taking power away from traditional brokers and delivering it to the masses. Of course, if his revolution succeeds and Buterin’s technology achieves mass adoption, his plan will have the added benefit of enriching him and other Ether holders.

Before he can upset the world order, though, Buterin must prove that developers can use his technology securely—a legitimate question in the wake of the hack of the DAO, which was constructed on his network. Much of the excitement in the tech community has been shifting toward Ether in recent months and away from other digital monies, like Bitcoin. But in the volatile, idealistic world of cryptocurrencies and their creators, allegiances can change rapidly.

The digital currency movement achieved liftoff at a moment when the global financial system appeared to be on the verge of collapse. On Nov. 1, 2008, just weeks after Lehman Brothers went under and kicked off a worldwide market crisis, a bulletin appeared on an esoteric mailing list that was a favorite haunt of cryptography enthusiasts. “I’ve been working on a new electronic cash system that’s fully peer-to-peer, with no trusted third party,” wrote a newcomer to the thread alongside an abstract and a link to a nine-page academic paper. He called the creation Bitcoin.

The shadowy persona, who signed off as “Satoshi Nakamoto,” had solved a long-standing conundrum in computer science known as the Byzantine Generals Problem. Building on the work of others, he proposed a decentralized system in which effectively no one could cheat. Nakamoto’s genius was to use a blend of cryptography, mathematics, and game theory to keep everyone honest. Instead of trusting the curator of some monolithic database to approve an all-knowing, all-seeing record of every payment transaction, why not distribute a copy of that ledger across everyone’s machine? Easier said than done—but Nakamoto’s system accomplished the feat.

Nakamoto’s prime innovation was the so-called blockchain—a new system for structuring data. As the name suggests, a blockchain consists of a series of linked blocks, or lists. Each block contains a record of time-stamped transactions—who paid whom, how much, and when. Everyone agrees upon the order, thanks to a clever combination of mathematics and economic incentives, and all transactions are mirrored publicly across its open network. Like the Internet, a blockchain aims to eliminate single points of failure; any one node could explode and the system would survive, accurately and intact.

Early on, Bitcoin had attracted a following of ardent cryptoanarchists, libertarians, and curiosity-driven technologists drawn to the separatist framework. By 2011, Nakamoto himself had mysteriously evaporated into the fogs of cyberspace. (He has yet to be identified despite a global media manhunt in recent years.) But interest in his creation was about to explode and attract the attention of a computer-obsessed teenager living in Toronto.

One day in February of 2011, Dmitry Buterin introduced his son to an intriguing development he had come across online: Bitcoin. Initially Vitalik didn’t show much interest. The idea of digital money sounded boring compared to World of Warcraft. And he didn’t share the same stringently libertarian values as his father. But after doing a little research on cryptocurrencies, Buterin adjusted his thinking. Maybe the math appealed to him.

Numbers had captivated Vitalik Buterin at an early age. As a child, Buterin didn’t spend much time socializing with other children. He stayed home with his grandparents while his father and mother studied computer science at a university in Moscow in the years following the Soviet Union’s collapse. Given Legos to play with, Buterin didn’t assemble miniature towers, animals, or people. Instead, he made numerals. When Dmitry bought his son his first computer at age 4, Buterin took to it instantly. “Excel was his favorite toy,” says Dmitry.

Dmitry, who had divorced Vitalik’s mother, moved to Toronto in 1999. Buterin followed a few months later. As time went on, things got easier for Buterin. He began coming out of his shell in high school, joining a debate team. But computers remained a central part of his life.

BOY’S BEST FRIEND: Growing up near Moscow, Buterin, the son of two was obsessed with numbers and was hooked on computers by age 4. “Excel was his favorite toy,” says his father.Photo: Courtesy of Dmitry Buterin

Once he understood Bitcoin’s potential, Buterin started looking for ways to earn some of the currency himself. He first wrote posts about the subject for a website in exchange for a meager sum of 5 Bitcoins apiece (then about $4 per blog post), but the site went belly-up. So he began writing two articles a week on aspects of the technology and its potential social impact, publishing a teaser paragraph on Bitcoin forums. He would put up his Bitcoin address—sort of like bank account information—and announce that he would release an article if he received enough donations. Steadily, the Bitcoin began rolling in.

Then, improbably, he launched his own magazine. In September 2011, a Romanian programmer named Mihai Alisie, then 23, suggested that he and Buterin, then 17, start their own publication. They founded Bitcoin Magazine, a print and online publication that has claimed, in the years since, a total readership of 1.5 million. Buterin wrote most of the articles. (The magazine is still published but by different owners.)

Buterin’s timing was perfect. Interest in Bitcoin began exploding. To take advantage of the opportunity, Buterin decided to drop out of school during his freshman year at the University of Waterloo. (He later received a fellowship from PayPal (PYPL) cofounder Peter Thiel.) The value of Bitcoin spiked along with the currency’s hype—rocketing from less than $1 in 2011 to nearly $1,000 in 2013. Entrepreneurs and venture capitalists began to see it as an opportunity to upend the entrenched financial sector. Banks began secretly exploring the technology too.

Funded by the surging value of his Bitcoin earnings, Buterin went on a world tour. He began living a peripatetic lifestyle, dabbling in projects here or there. For a while he stayed with a band of cryptoanarchists in an abandoned flat in Barcelona. “I actually got more skeptical of left-wing anarchism after spending two months there,” Buterin says. Everyone in the commune was responsible for collectively cooking dinner and lunch. But over time, says Buterin, people got lazy and blew off their assigned duties. “It made me realize that if you don’t have economic incentives or rules forcing people to do basic chores, then they’re not going to get done,” he says.

Buterin also began to recognize limitations in Bitcoin. As more people began using the currency, a problem became abundantly clear: The network didn’t scale. It could handle only seven transactions per second—far from what would be required if the system ever were to go mainstream. Visa (V), by contrast, processes thousands of transactions per second.

Aspiring developers also had to deal with an unfortunate reality: It’s pretty difficult to build an app on Bitcoin. The system’s primary role is being a secure means of transferring value, not being a system to create software. Nakamoto had deliberately constrained Bitcoin to make it less vulnerable. And its most influential core coders seemed uninterested in deploying quick fixes to the underlying problems.

An idea began to crystallize for Buterin. What if someone made a more generalized platform—one on top of which you could build any kind of financial derivative? He proposed the project to a group of coders he was working with, but they put him off. Says Buterin: “I remember thinking, ‘Screw that. I’ll do it myself.’ ”

So he put his ideas into an email and sent it to a small circle of confidants. By early 2014, he and a group of acolytes had begun building Ethereum.

From the outside, the office of ConsenSys looks more like a rehearsal space than a high-tech startup studio. Nestled between an organic-food market and a sushi restaurant in the hip Bushwick neighborhood of Brooklyn, the door is plastered with peeling stickers for obscure punk and indie rock bands. Upstairs, the open office space is packed with Ethereum application developers.

Photo: Cole Wilson—The New York Times/Redux

The incubator is the brainchild of Joseph Lubin, a software expert and onetime hedge fund manager. Lubin was crucial to helping get Ethereum off the ground. He provided some initial funding for the foundation. Lubin created ConsenSys earlier this year as a for-profit tech foundry operating in much the same vein as Betaworks and IdeaLab, except that it’s entirely Ethereum-focused.

Lubin says he caught the cryptocurrency bug for “existential reasons” after the 2008 economic meltdown. “I was pretty depressed about the state of the global economy,” says Lubin, who studied computer science and electrical engineering at Princeton. “When I read the Bitcoin paper, it seemed like we had a way to build an alternative system.”

Now he’s busy recruiting would-be bankers to help him and Buterin reinvent the architecture of industries ranging from finance to energy to health care. “Our goal is not to create a hierarchical command-and-control structure, but to stand up startups that stand on their own,” Lubin says.

ConsenSys is one of many companies working on Ethereum projects. Lubin’s organization has set up trials for automatic music royalty payments, persistent identity records, and solar energy trading tokens over a blockchain. Elsewhere, a startup called Augur is building an Ether-powered prediction market. And Santander Bank is collaborating with a company called Ether.camp on a new digitized form of cash.

Photos, Hearn: Daniel Auf Der Mauer—13 Photo/Redux;Masters: Mackenzie Stroh—Contour by Getty Image; Ludwin: Forbes Media LLC/Corbis via Getty Images; Armstrong: David Paul Morris/Bloomberg via Getty Images

Ethereum’s power lies in its ability to automate complex relationships encoded in so-called smart contracts. The contracts function like software programs that encapsulate business logic—rules about money transfers, equity stake transfers, and other types of binding obligations—based on predetermined conditions. Ethereum also has a built-in programming language, called Solidity, which lets anyone build apps easily on top of it.

Buterin’s allies say these features make Ethereum superior to Bitcoin. “Currency alone doesn’t buy you the ability to create new social structures,” says Vinay Gupta, an Ethereum project manager best known for inventing the hexayurt, a makeshift shelter that dots the landscape at the Burning Man festival each year. “Once you add smart contracts, you get the ability to organize the world in new ways, and that’s where things get more interesting.”

Bitcoin loyalists argue that Ethereum’s fatal tradeoff is that it’s not as secure, and they point to the DAO hack as Exhibit A. Even in the Bitcoin community, though, there’s some envy for the flexibility of Buterin’s creation. “Ether is getting a lot of attention because we’re not being allowed to scale fast enough,” says Roger Ver, nicknamed “Bitcoin Jesus” for being one of the cryptocurrency’s earliest and most vocal promoters. “The same thing happened with Friendster and MySpace. They had a bad user experience, weren’t able to upgrade the servers and software fast enough, and everyone migrated to the next thing.”

“It hurts me to say that,” Ver adds.

The hack of the DAO was potentially a major setback for Ethereum. But Buterin says he didn’t get too worked up at the time. He was in China and was engrossed in trying to fix things. “I personally, generally, don’t really feel much emotion if there’s some problem and I’m actively solving it,” he says.

The fallout from the cybertheft is ongoing, however. And the solution that Buterin ultimately implemented has caused a bizarre schism in the Ethereum community.

After much debate, Buterin and his team proposed that Ethereum deal with the DAO theft by conducting the so-called hard fork. Essentially, they would rewrite the code in the transaction ledger and electronically retrieve the stolen DAO tokens. The hacker would be unable to exchange his purloined stake, and DAO investors could get their money back in Ether. When it was put to a vote, the hard fork passed. And some 85% of the Ethereum network implemented it.

But the other 15% rebelled. They decided to break away from the Ethereum network on principle and form their own, new version of the blockchain, calling it “Ethereum Classic.” In pulling off the hard-fork fix, these purists argued, Buterin and the other stewards of Ethereum had contravened a fundamental blockchain tenet: the sanctity and irrevocability of the public ledger.

In their view, the hacker had rightfully succeeded by way of a “legal loophole” in the DAO’s buggy software. So on the Ethereum Classic blockchain, the hacker has retained his or her riches. (Although the value of the haul is much less than at the time of the hack. Ethereum Classic recently traded at about $1, vs. $12 for regular Ethereum.)

This is all confusing to say the least. And the feud has the potential to scare off potential partners at a crucial stage of Ethereum’s development.

“I think the fact now that there is Ethereum and Ethereum Classic, and that people continue to mine both, is unfortunate,” says David Treat, global head of Accenture’s (ACN) capital markets blockchain unit, whose team continues to use the Ethereum code base in their work with clients, like big banks. Yet Treat doesn’t hold the tenet of blockchain immutability dear. From his perspective, clients will one day need to correct potential mistakes on blockchain ledgers. “If and when something goes wrong, who has the right and ability to make a change? How does that change get made?” he asks. These are questions that should be addressed well ahead of time, he argues.

Buterin is working on solutions that he believes will prevent major hacks in the future—like software debuggers. He describes the DAO attack as a “rite of passage” for Ethereum. As was a second major attack on the network in late September, on the eve of an Ethereum conference in Shanghai.

Given the breaches, it’s fair to wonder: Will Ethereum and other blockchain networks ever be trusted enough to replace our current financial system? Buterin believes it will take a few years, but he’s patient. “The main advantage of blockchain technology is supposed to be that it’s more secure, but new technologies are generally hard for people to trust, and this paradox can’t really be avoided,” he wrote in an email from China. “We have to just live through it.”

Correction: An earlier version of this article incorrectly stated that Adam Ludwin, CEO of Chain, was an investor in Uber.

A version of this article appears in the October 1, 2016 issue of Fortune.