Do you want to know more about one of the most popular cryptocurrencies in the world? Let’s look at the top 10 facts about this Blockchain asset and the new era of cryptocurrencies that came after it.
Ethereum is a cryptocurrency developed by Vitaly Buterin in 2014. The concept of Ethereum, like other similar promising projects, appeared long before the “crypto boom”, and the developers did not expect super profits.
The history of Ethereum is fascinating and has many interesting moments that not everyone knows.
Although Ethereum is nominally a cryptocurrency, its main function was to provide and support the smart contracts. The modern version of Ethereum has grown as a platform, and now anyone can create a distributed system on its base.
ETH used to support the DAO, which was meant for decentralised and independent investment management. Omitting the details of the DAO service, it is worth noting that it had serious security holes. As a result, an unknown hacker was able to steal over 3.64 million ETH from the blockchain.
The security hole was closed and the funds were frozen. Yet, Vitaly Buterin decided to roll back the blockchain and create a hard fork to get the funds back.
This point follows as a logical continuation of the previous one. The blockchain rollback caused not only the fraudster failing, but also miners and holders losing their money. This led to affected miners and investors who did not agree with such a policy forming their own cryptocurrency, ETC.
In 2020, ETH and ETC projects are developing almost in parallel. Although ETC does not claim to be a leader, it is implementing similar technologies in sync with its “big brother.”
When Ether began to develop, its key technologies were mining and Proof of Work. It was a temporary solution to attract miners who were supposed to keep the network up and running. Moreover, a switch to PoS emission was planned soon.
Thus, Vitaly’s concepts were aimed at stopping dependence on the developers of video cards and Asic processors.
Attempts to switch to Proof of Stake were made back in 2017 and then continued in 2018. However, Ethereum has not still switched to a hybrid emission system yet, even in 2020.
Perhaps, the Berlin updates expected in 2020 will provide another opportunity to abandon the services of “miners”. Some economists doubt the possibility of such a transition, since the main ETH holders will not support such a decision, because they believe that with the transition to PoS, the price of the coin will drop several times.
Considering more than half of modern ICOs are built on ERC-20, this will not only influence the parent cryptocurrency, but also significantly reduce the followers’ capitalisation.
When the Bitcoin network was created, no one could have imagined that the asset would gain such phenomenal popularity. That is why the issue was technically limited to 21 million coins. An exponential decrease in the reward for a mined block should make the formation of the last block technically impossible.
The efforts of the miners have exceeded all expectations. Already in 2013, when Ethereum was just gaining momentum, a team of Canadian programmers decided to make the emission infinite.
Now this does not surprise anyone, but Ethereum was the first coin with an endless emission, which made a splash. Especially when you compare it to the first generation forks.
Although the Ethereum network is completely decentralised unlike Bitcoin, it has a central development team who are also the largest holders in the blockchain.
This led to the consolidation of funds and the centralisation of development. As mentioned earlier, Buterin almost single-handedly made the decision to rollback the blockchain. Most key actions continue to be “pushed” by the developers to this day, that rightfully irritates the public. But this also has an advantage. All responsibility for development on the network lies with its leadership. Investors trust Ethereum because developers do not hide behind aliases and are responsible for their work.
It is difficult to overestimate the importance of the Japanese animator, director and manga artist — Hayao Miyazaki. In part, one of his works, “Laputa: Castle In The Sky”, served as an inspiration for Buterin.
One of the anime heroes used the magic crystal Aethereum, which made it possible to extract energy from the air. The crystal of the flying stone was not only a source of energy, but also indicated the path to the cherished goal of the heroes.
Thanks to ease of development and another wave of popularity for cryptocurrencies, thousands of products began to develop at the same time on ERC-20.
On the one hand, this resulted in a crazy inflow in terms of capitalisation, and the growth rate of the coin was phenomenal (ten times higher than that of BTC in any historical period). This also played a cruel joke with Ether.
Simultaneously with the fall of Bitcoin in 2018, 90% of scam ICOs built on ERC-20 collapsed. This caused significant damage to the reputation of Ether and its technologies.
And now more than half of the existing Blockchain networks are capitalised through “smart gas”, which once again proves the benefits of smart transactions. The unique technology makes it possible to automate not only financial, but also most everyday issues.
The main goal of Ethereum as a service was to conduct smart deals. Today, few people think about it, but smart contracts were supposed to completely automate any transactions by excluding intermediaries such as banks.
In fact, such interaction is based on a script that allows you to make a transfer with a minimum commission if certain conditions are met. The implementation of a smart contract is able to completely eliminate the human factor from financial transactions, thereby optimising the entire system. Estonia became the first state to introduce smart contracts into the healthcare system. All patient cards at public hospitals and clinics are now recorded on a common blockchain. Smart contracts allow you to renew and close certificates of incapacity for work, as well as re-write prescriptions for drugs.
The personality of the main project developer, Vitaly Buterin, is also crucial in order to understand the development of ETH.
Vitaly began work on the project when he was not even 18 years old.The first implementation took place in 2013, when the founder of the service was 19 years old. At such a young age, Buterin was able to programmatically implement a complex economic system, which gave a phenomenal impetus to the idea of conducting financial transactions thanks to smart contracts. These are the most complex calculations, building a separate ecosystem, integration with the fiat sector, and the ability to implement any concepts of ETH scripts.
As you know, any project undertaking cannot be perfect. So, on the basis of Ethereum, but with a significant revision, three years after the launch, EOS was launched. This project is a logical continuation of Buterin’s achievements in conducting smart contracts. Today, both services are in a competing phase, but EOS couldn’t exist without Ethereum.
Another event occurred during the crypto boom and the rise in the price of ETH over USD $1,000 per gas. This popularity has created a shortage of Geforce GTX 10-series graphics cards. At their peak, their sales exceeded 60% of the total graphics chip turnover. Nvidia has even released a number of cut-off cards designed specifically for mining.
Interestingly, cards of the 10th series for mining, with a certain modification, can become a high-performance option which can be purchased at the same budget for gamers. Today they are difficult to obtain, but the Nvidia p106-100 model is only 4% weaker than the standard GTX 1060 at a price almost twice as low as its “factory brother”.
The first version was called Frontier. The developers did not guarantee the safety, anonymity and performance of the network during the alpha testing period.
Most of the upgrades are aimed at fixing security issues and Ddos attacks against the WAN.
ERC-20 is the first decentralised exchange to provide even price correlation without intermediaries. Besides, its performance is still in question, and as a result of the entry of large players, large drops in quotations periodically occur.
ETH is one of two cryptocurrencies shaping the market. Depending on the level of its capitalisation, prices for all forks and subsidiary blockchains, created according to the principle of ERC contracts, change. Bitcoin remains the second cryptocurrency.
In 2019, the creators faced serious difficulties – American securities organisation filed a lawsuit regarding the operation of smart contracts. Since then, the name “smart deal” no longer appears in official Ether documents, but continues to figure as a stable expression among the community.
Of course, Ether is in many ways a legendary and even mythical project, despite its young age. It has certain scaling issues — the era of scam ICOs and conflicts with the DAO have damaged its reputation.
However, it cannot be denied that even if this type of decentralised distributed network does not become fundamental in the world of cryptocurrencies of the future, it has laid a solid foundation for all subsequent Blockchains and expanded the understanding of the use of the technology. Open source provides an opportunity for all crypto enthusiasts to try their hand at developing smart applications.