Coin Story: Ethereum

Coin Story: Ethereum

Coin Stories coinstory News
01/19/2018 by admin
904
I’m like my name… the gas…the fuel…you can’t get by without me… I am so young and yet people need me to do complex work… because I’m a geek…I know so much about computers…like my creator Vitalik…he used to play with Excel spreadsheets when he was four…Ready for my story?   Ether (ETH) is best
Ethereum 1

I’m like my name… the gas…the fuel…you can’t get by without me… I am so young and yet people need me to do complex work… because I’m a geek…I know so much about computers…like my creator Vitalik…he used to play with Excel spreadsheets when he was four…Ready for my story?

 

Ether (ETH) is best described as a necessary element – a fuel – for operating the Ethereum blockchain. It is used as an incentive to ensure that developers write quality applications and that the network remains secure and healthy. Ethereum (the blockchain) is a platform allowing developers to build next-generation applications using smart contracts – contracts that are written in a code If this happens, that will happen. Ether is different from Bitcoin: while Bitcoin is used as digital money, Ether is used for creating smart contracts. Ethereum is often referred to as a supercomputer that allows users to run any code they want. Smart contracts can be used for a variety of different transactions (e.g., derivatives, futures, options), simple consumer transactions, Internet of Things data exchange and automatic payments. For example, a smart contract can transfer the home ownership to the buyer and the funds to the seller after the deal has been agreed upon without the need of an intermediary to execute it.

 

The Ethereum Foundation (registered in Zug, Switzerland) was co-founded in 2014 by Vitalik Buterin, an early Bitcoin enthusiast, Dr Gavin Wood, a computer scientist and an inventor of Solidity, the Ethereum smart contract language, and Joseph Lubin, a Canadian entrepreneur. Since 2014 the Etherem blockchain has been used to develop many decentralised applications and DAOs (decentralised autonomous organisations) and has become the main platform for launching ICOs (initial coin offerings). Augur, BAT, Golem and Status are examples of applications run on Ethereum. In mid 2016, the DAO, a decentralised crowdfunding platform, was launched, where investors could have proportional decision rights on the investment decisions. It was the largest crowdfunding platform at the time (it raised some $160 million), but an attacker exploited a vulnerability in the code and syphoned away $50 million worth of the native token. The proposed solution was to hard fork the cryptocurrency to recover the funds, which resulted in two Ethereum blockchains – Ethereum (ETH) and Ethereum Classic (ETC). The latter is also traded on exchanges.

 

Currently Ether (ETH) is mined (i.e., it uses the proof of work consensus algorithm), but it will be moving to a proof of stake, which means that a node will validate transactions depending on how much Ether the node holds. It is the second largest cryptocurrency behind Bitcoin and has so far provided investor returns in excess of Bitcoin. What drives the value of Ethereum? While there is no limit on Ether supply, inflation will be decreasing with the transition to the proof of stake. Like with any cryptocurrency, including Bitcoin, value is driven by usage, so scaling Ethereum in future to ensure it can handle more transaction is critical to its success. Ethereum is popular with developers (of the top 20 blockchain applications 15 are built on Ethereum) and with many large companies and banks (incl. Microsoft, BP, Intel, Toyota and UBS) who are experimenting with the technology.

 

 

References and further reading:

Maas, T. (2017) Understanding Ethereum – A Complete Guide. https://hackernoon.com/understanding-ethereum-a-complete-guide-6f32ea8f5888

Antonopoulos, A. (2017) Mastering Ethereum.

EthList: The Crowdsourced Ethereum Reading List https://github.com/Scanate/EthList/blob/master/README.md

Add a Comment

This website uses cookies and asks your personal data to enhance your browsing experience.