Ethereum (Ethereum) is a platform for creating decentralized online services based on the blockchain based on smart contracts. Implemented as a single decentralized virtual machine. Ethereum was proposed by Vitalik Buterin at the end of 2013, the network was launched on July 30, 2015.
As an open platform, ethereum greatly simplifies the implementation of blockchain technology, which explains the interest from not only new startups, but also the largest software developers. Banks and airlines showed interest in the platform.
PURPOSE OF ETHERIUM
One of the key purposes of this platform is the generation of applications based on the principle of decentralization. The solutions that operate on the basis of the system have the following advantages:
-
security: the applied cryptography technology stands on the protection of applications from attacks by cyber criminals;
-
"Immunity" from making changes: after the creation of the contract, no one is able to modify its terms;
-
guaranteed performance of the created applications.
It is impossible not to mention promising startups that are being created on the basis of Ethereum. Thus, the Augur oracle platform managed to collect about 5.5 million dollars during the initial placement of coins at the start of the campaign. Her specialization is making forecasts for the result of certain events, after which the funds are transferred to the account of the winning party.
With the help of Ethereum crypto coins, you can pay or simply make a money transfer. Given the growth in the value of the coins of this crypto network, which, according to expert estimates, will continue in the next year, crypto coins may become a suitable asset for investment.
SMART ETHERIUM CONTRACTS
Smart contracts are the "secret ingredient" of Ethereum. The concept of smart contracts was proposed in 1996 by scientist Nick Szabo. Smart contracts are computer programs that control the transfer of digital currencies or assets between parties when certain conditions are met.
Smart contracts perform operations like if-then ("if ... then"). If, for example, a smart contract is used to operate a vending machine, it will look something like this: "If someone puts a dollar in the vending machine, the vending machine dispenses a can of Coca-Cola."
Ethereum provides the basis for these contracts while providing a level of functionality not available to most other cryptocurrencies. It is assumed that Ethereum will find applications in areas such as identification systems, insurance payments, etc. All this is possible thanks to smart contracts. They effectively support transactions and compliance in a fully digital environment. Ethereum can make our daily lives more efficient and cost-effective by automating various processes and eliminating intermediaries.
The main purpose of Ether (ETH) is the transfer of digital currency as an asset when performing the action enshrined in the Smart Contract. There are also Smart Contracts in Bitcoin, but in BTC their capabilities are greatly simplified.
Ethereum blockchain supports Smart Contracts. This is a predetermined irreversible action that will be automatically performed when a certain condition is reached. Smart Contract can be called an automatic and autonomous program that, once launched into the network, excludes outside interference.
An example of a Smart Contract is the outcome of a bet on the outcome of a football match. The creators of the contract put their Ether on two different teams in a scheduled match. After the creation of a Smart Contract, no one can make changes to its terms. After the end of the match, the program looks at the result and, according to the Contract, pays to one of the parties the total amount of the bet in Ether. The action is absolutely transparent and irreversible. Smart Contracts can be called the ideal system of contractual relationships between people. Moreover, this technology is limitless in its development in everyday life.
When creating Ethereum, the difficulties encountered by developers when working on a pure blockchain were taken into account. Any centralized systems and applications can be decentralized using Ethereum. The simplest examples are the issuance of loans and borrowings, the voting process, and intermediary services. Once again, no one can make changes to completed actions, not even the creator of the application. This excludes any corruption and fraud.
Developers often face limited functionality when building applications on a pure blockchain. The Ethereum platform, thanks to the unique technology Ethereum Virtual Machine (EVM), allows you to add any functions to the application, limited only by the developer's imagination. In addition, the platform, thanks to EVN, supports applications written in any program code.
MAIN DIFFERENCES BITCOIN AND ETHERIUM
Despite the fact that both cryptocurrencies are based on the blockchain, and at first glance are almost identical, there are significant differences between them. Let's consider the most important of them.
1. Maximum number of coins in circulation
The issue of bitcoins is specially "sharpened" so that the final volume of the mass of funds is equal to 21 million BTC by 2140. Ethereum does not have an upper threshold, being designed for unlimited production with an annual increase in the money supply by 18 million ETH.
2. Speed of operations
The block creation time in the Bitcoin system is 10 minutes, this speed reduces the attractiveness of coins in terms of liquidity. For ETH, this figure is 15 seconds. Subject to faster execution of transactions, higher cryptocurrency volatility is provided.
3. Purpose of creation
The purpose of the Bitcoin crypto network is to carry out monetary transactions between network users, this was the only purpose of its creation. Ether, on the contrary, was preparing the role of a platform for creating applications, in addition to launching the settlement unit of the ETH platform into circulation.
4. Owners of cryptocurrency
Currently, most of the bitcoins are owned by the miners who mined them. In the case of ether, we see a different picture: the bulk of this currency is in the possession of persons who bought coins in advance (let's not forget that Ethereum was financed through the procedure for the initial placement of coins between investors). But, according to forecasts, over the next five years, this difference may be leveled and the advantage will be in the hands of miners.
News | RUSSIA about Ethereum and Blockchain
A technology that can revolutionize the idea of the financial capabilities of cryptocurrencies. Ethereum is an advanced blockchain platform that allows anyone to create arbitrary decentralized applications that simultaneously have the properties of scalability, standardization, ease of development and interoperability.
ADVANTAGES AND DISADVANTAGES OF ETHERIUM
To begin with, let's talk specifically about ether - a token (cryptocurrency). Ethereum has no serious drawbacks in comparison with Bitcoin and other popular coins. Moreover, the network processes transactions quickly, potentially increasing the payment potential of ETH.
There are no problems in order to buy this cryptocurrency or exchange it for other coins. However, from an economic point of view, ether has several disadvantages. First, it is the course and the mechanisms that influence it. If in the case of Bitcoin we can talk about market formation of prices, then in the case of Ethereum there is a direct relationship with the success of the platform itself. Should someone release an improved version or find a flaw in Ethereum, it will bring down the value of tokens.
Secondly, there is no emission ceiling. This "depreciates" the cryptocurrency and makes us talk about a possible transition to Proof-of-Stake or the development of a mechanism for burning tokens.
BENEFITS
Versatility - supports various programming languages and algorithms of different complexity, and smart contracts are used in different areas;
Flexibility - the platform is open to improvements, upgrades, updates;
Publicity - Ethereum has a leader in the person of Vitalik Buterin, details of updates and innovations are announced in advance;
Accessibility - Ethereum is an open platform for developing decentralized applications. And almost anyone can act as a developer.
LIMITATIONS
Centralization - although Ethereum positions itself as a DAO (decentralized autonomous organization), but the case with the network hard fork in 2016 shows that the platform has elements of centralization;
Vulnerabilities - The DAO case shows that the platform can "skip" imperfect projects;
Documentation - Developers complain about the lack of clear documentation, which makes it difficult to interact with the platform.
ERC20 is the name of a set of standard requirements for those looking to issue a new token on the Ethereum blockchain. ERC stands for Ethereum Request For Comments.
Introduced in late 2015, ERC20 requirements were unofficial guidelines until they were formalized on the Ethereum GitHub page. The main purpose of ERC20 is to ensure that Ethereum-based tokens behave in a predictable manner throughout the ecosystem, that decentralized applications and smart contracts interact in the same way across the platform, and that all tokens comply with a fixed security standard. In general, we are talking about standardization.
Given the sheer number of ICOs running on Ethereum, it should come as no surprise that a standard was required. As of January 2018, there are more than 21,000 smart contracts for ERC20 tokens, and it is standardization that guarantees their stable operation on the Ethereum network.
REASONS FOR POPULARITY AND PROSPECTS ETHEREUM
Many people underestimate the moment when the full version of the Ethereum network (Homestead) came out. This became the starting point for the entire cryptocurrency market and triggered a boom that has been going on for several years. The Ethereum platform allowed the development of decentralized projects in a distributed ledger using smart contracts. And in fact, it became a catalyst for the inflow of investments (ICO) into the crypto world and as a result of a serious growth in the exchange rate of major currencies.
Ethereum allows you to use the blockchain for more than recording and storing transaction data. She opened it to new areas, laying the building block for a potential IT revolution. A revolution that will decentralize a number of processes and abolish mediation in many areas. This is why Ethereum is so popular. And the fact that the network is constantly evolving only adds to its prestige.
A new era of Ethereum will come with the transition to the Serenity version. Before that, the release of Metropolis is also planned. However, it is in Serenity that the transition from PoW to PoS is being implemented, which should reduce the costs of maintaining the network and protect it from the notorious “51% Attack (when 51% of all cryptocurrency belongs to one owner). In addition to this, an option is being considered with scaling the network by sharding, that is, dividing it into smaller parts.
If the new items are successfully implemented, then this will be positively reflected on the ether rate. Some experts suggest that ETH has the potential to overtake Bitcoin. True, the Ethereum team is not chasing the status of the main cryptocurrency on the market. Their main goal is to develop the platform, create mechanisms to combat inflation of the internal token. This token, according to Buterin, should carry a real value, and not be the subject of speculation. This is another direction in the development of the ether.
The Ethereum blockchain with smart contracts is the prospect that makes ETH attractive in terms of investment. The future will show how powerful the platform will become. But even now such giants as Microsoft, Santander, JP Morgan, Intel, Sberbank believe in it. All of them are part of the Enterprise Ethereum Alliance, actively exploring the use cases of blockchain in their work.
Ethereum can already be considered an insanely successful project, and there is no doubt that one of the most innovative teams in cyberspace is working on it.
Cryptocurrency markets have been hit by a severe downturn in recent months. Under these conditions, manufacturability, efficiency gains and real-world problem solving are of particular value.
As long as Ethereum keeps its brand. If you need proof, consider the following:
-
As Ethereum-based tokens rise in value, the underlying platform's assets rise as well.
-
Many entrepreneurs and developers need gas to use the network, and this organically stimulates the demand for ETH and increases its value.
-
Several large companies like JPMorgan Chase, BBVA, Accenture, Microsoft, and Intel have come together to form a group called the Enterprise Ethereum Alliance (EEA) that focuses on developing applications using the Ethereum blockchain.
-
As the use cases for dapps continue to expand and the technology grows to meet demand, Ethereum is taking advantage of this trend to expand its network.
-
The Ethereum community brings together bright, talented and intelligent people. It is not as prone to hype as the communities of many other blockchain projects.
This list allows us to conclude that Buterin's team will be even more successful in the future. However, skeptics are of the opposite opinion. They make the following arguments:
-
Ethereum will not be able to deal with network congestion fast enough and will lag behind the competition.
-
Vitalik Buterin is a “point of failure”. As the public face and driving force behind Ethereum, he is almost irreplaceable. If something happens to Buterin or he just decides to abandon his brainchild, this can kill the project.
-
Many of the use cases for Ethereum (and its dapps) are theoretical or impractical. There is a version that the Ethereum team is looking for contrived problems in order to fit "beautiful" solutions to them.
-
The climate in the community can deteriorate. Ethereum has already gone through one hard fork, and it is possible that others await it in the future. The consequences of this are difficult to predict, but discord in the community hit Bitcoin hard at the time.