Blockchains 101: Ethereum

Master of Smart Contracts

Introduction

Ether (Ticker: ETH) is the native digital currency of the Ethereum platform.

The Ethereum network went live on July 30, 2015, with 73 million Ether pre-mined (distributed to initial ICO participants, founders and core developers) which is still today a source of controversy. Ethereum was the first cryptocurrency to perform an ICO.

Ethereum Artwork

Description

Ethereum is supported in part by the Ethereum Foundation, a non-profit organization that is part of the larger Ethereum ecosystem including enterprise Ethereum consortiums like the Ethereum Enterprise Alliance.

GPU (Graphic cards) mining rig for Ethereum

ETH1.0: Mining (Proof of Work)

On Ethereum, the mining process and transaction fees revolve around a conceptual token called gas. Miners set the price of gas and can decline to process a transaction if it does not meet their price threshold. Gas prices are denoted in gwei, which are worth 0.000000001 ETH.

Transactions on ETH takes about 10 seconds to complete (blocktime), compared to the 10 minutes of Bitcoin.

ETH2.0: Migration to Proof of Stake (PoS)

By allocating a “Stake” of their ETH to a Masternode (min 32 ETH), any participant can become a validator and pretend to earn a share of the block rewards and transaction fees.

In July 2020, a testnet (Beta) of a PoS side chain for ETH called Beacon went live and after a couple months of testing. It opened to stakers in middle November. By December 1, the minimum staking requirement allocated to Beacon was met, automatically triggering the launch of ETH2.0 network.

Ethereum price action since 2015 (TradingBull mobile app)

Distribution and supply model:

There is no hard cap (max) on the total supply of Ethereum and the future supply will depends on future decisions of stakeholders through the consensus, involving the Ethereum Foundation, the Ethereum community and ETH holders.

Tokens

ERC20 tokens are used as cryptocurrencies by projects in order to raise funds or to tokenize real assets (stocks, properties…). Nowadays, due to the open source structure of smart contracts, the costs and technical difficulty to create a token on the Ethereum blockchain are relatively low.

ERC20 tokens on Ethereum are non-natives, which means they are not required for the Ethereum blockchain to operate (which is not the case for the native ETH token). Consequently, tokens do not have their own blockchain infrastructure but use Ethereum or other major blockchains instead, making it cost effective solution for different projects to deploy.

Another popular form of token is the ERC721 non-fungible token standard which allows to make every single token unique and often representing the ownership over something collectible such as artworks, game characters and items, and more recently, celebrities. ERC721 is a more advanced token type than ERC20 (In that it requires higher coding skills to deploy).

https://wixlib.com/2020/04/16/build-a-dapp-using-ethereum-and-angular-6/
Build Dapps on ETH with Angular 6 (Wixlib.com)

dApps

Other applications

Creating a new Ethereum wallet on the popular MyEtherWallet platform

Storage and wallets

Keeping cryptocurrencies on centralized crypto exchanges and other selling platforms being considered the riskiest since the large volumes of bitcoin stored may attract hackers’ interest.

Technical specificities:

  • Type: Native Coin
  • Total Supply: No hard Cap (not limited)
  • Subunit: 10–9 (gwei)/ 10–18 (wei)
  • Consensus: Proof of Work (PoW)/Proof of Stake (PoS)
  • Algorithm: EtHash
  • Encryption: Keckack
  • Blocktime: 13 seconds
  • Coding languages: Go, Rust, Solidity, C#, C++, Java, Python
  • Open source: Yes
  • Privacy: Pseudonymous (low)
  • Current version: Muir Glacier (#9,2M)
  • Previous versions: Olympic (pre-release) — Frontier (#0) — Ice Age (#200K) — Homestad (#1,15M) — DAO Fork (#1,92M) — Tangerine Whistle (#2,463M) — Spurious Dragon (#2,675M) — Byzantium (#4,37M) — Constantinople (#7,28M) — Istanbul (#9,069M)
  • Next Version: Serenity (ETH2.0)

Documentation:

TradingBull.io

TradingBull.io

Telegram community: https://t.me/TradingBull_DA

Twitter: @_Digital_Assets

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