The world of cryptocurrencies and Blockchain technologies is fascinating, it sparks the curiosity of many, and it is often possible to understand its functioning if you have firm points on which to base your assessments. Precisely for this reason, it is essential to always take into account a well-known mantra of the crypto world “do your research.”
Studying and getting information is one of the first and most important habits that anyone who ventures into this world must have, and that’s why in this article, we intend to go deeper into the Ethereum topic, trying to find fixed points for its easy understanding.
Ethereum: An Insight Into The Crypto
Let’s start with the main information: Ethereum is a decentralized and global platform based on Blockchain technology; its native cryptocurrency is called ETH or Ether. Designed to be:
- Safe
- Scalable
- Programmable
- Decentralized.
Anyone can use this Blockchain to create different types of protected technology. Thanks to smart contracts, it is one of the most used Blockchains for creating NFTs and decentralized applications or dApps.
History Of Ether & Its Blockchain?
In December 2013, Vitalik Buterin, then 19 years old, published the Ethereum white paper. The young Russian-Canadian is then joined by a team of 7 other co-founders who will help him carry out this project.
From the beginning of 2014, the first ethers are put on sale to raise funds: bitcoins are then exchanged to obtain ethers.
With this fundraiser, the team raised more than 31,000 bitcoins for an approximate value of $18 million and an issue of 60 million ethers.
The Ethereum cryptocurrency was officially launched in July 2015. However, in July 2016, the network underwent an attack that successfully stole over 3.5 million Ether or 5% of its supply at the time.
From then on, a hard fork is set up to return the funds and cancel the fraud. However, a minority of users refuse this hard fork, and this is where Ethereum Classic ( ETC ) is born.
Today ETC has yet to be successful while ETH continues its development. Indeed, the latter’s price is 10x higher than its counterpart’s.
Tokenomics Of The Project
In total, 72 million tokens were issued in the genesis block, 60 million being distributed to the first contributors to the sale and 12 million kept for the development fund.
In January 2022, the network identified 120 million ethers already mined. Unlike Bitcoin, there is no maximum limit regarding the number of tokens.
However, with the London hard fork (EIP-1559) implemented in 2021, Ethereum introduces the notion of burning transaction fees.
Concretely, this makes it possible to destroy part of the ethers resulting from transaction costs. Eventually, the world will tend towards a possible deflationism.
What Technology Does Ethereum Use?
It is the Ethereum Virtual Machine (EVM) that runs all the programs running on Ethereum.
Solidity, a coding language very close to the C++ or Javascript format, is used on the network, two of the languages most used by most developers.
Like Bitcoin, Ethereum uses proof of work ( POW ) to validate consensus. Miners are thus rewarded with transaction and interaction fees and obtaining new, freshly mined ethers.
However, the imminent switch to Ethereum 2.0 will move the network from POW to POS (proof of stake).
Validators will thus have to block their tokens to validate new blocks. This big Ethereum update also introduces the concept of sharding. This advance will make it possible to parallelize transactions and multiply the network’s processing potential.
In theory, the flow could rise from the current 15 transactions per second to nearly 100,000 in the long term.
Ethereum 2.0? Stages Of Progress
Ethereum 2.0, aka Serenity, is a major, major update to the Ethereum protocol launched on December 1, 2020, and is divided into three phases: beacon chain, shard chain, and eWASM; let’s explore
Phase 0: Beacon Chain
Phase 0, which began on December 1, 2020, will consist of a transition between Proof-of-Work, which is a method of validating blocks of transactions using the computational power of machines, and Proof of Stake, which is a method of verifying blocks. ) is the transition between a transaction that consists of proving ownership of a certain amount of cryptocurrency. It works in parallel with the proof-of-work Blockchain to avoid disrupting the continuity of the chain.
Phase 1: Shard chains
The first phase is about implementing the chain of fragments that make the Ethereum network more scalable. Ethereum is currently limited to 7-15 transactions per second. Sharing divides data to speed up processing. For example, the Ethereum hash system might place all addresses starting with 0x00 in one part and all addresses starting with 0x01 in another.
Phase 2: EWASM
EWASM (Ethereum Web Assembly), based on Web Assembly, an open-source World Wide Web standard for application development, is an execution engine designed to replace existing Ethereum virtual machines that run smart contracts on the Ethereum network. This new engine boosts Ethereum performance and supports more languages for developing smart contracts (C, CC++, Javascript, Rust, etc.) currently limited to Solidity.
“The Merge”: transition from Proof of Work to Proof of Stake- the green era of Ethereum begins.
Pay attention to this number: 99.95%. At the moment of the world’s biggest energy crisis, it can at least represent a message of hope: savings in consumption for “mining Ethereum.”
In short, revolution. The scale is related to cryptocurrency and the environmental impact of Blockchain, which has long been considered one of the most long-standing problems to be solved for sustainability. Still, it is a peaceful moment for Bitcoin and other digital currencies.
A revolution in the name of “fusion” is understood between the old and the new system. Commenting on the process, Ethereum founder Vitalik Buterin compared his cryptocurrency to a giant spaceship whose hull and engine need to be replaced. Not only does the Proof of Stake protocol allow you to make swaps on the fly, but without losing power or height.
The Future Of Crypto Is Green!
This is a major transition that the Ethereum platform will be working on starting September 15th. Nicknamed “The Merge,” it was repeatedly delayed due to technical issues. This consists of switching the platform and its associated cryptocurrency, Ether, from a proof-of-work protocol to another proof of stake.
In other words, an eventual update of the parallel Blockchain enables the transition from PoW to PoS, an irreversible period in the history of Ethereum and perhaps Blockchain in general. It results from long discussions and years of research by Ethereum founder Vitalik Buterin and developer Vlad Zanvir, and it could have serious implications for the sector.
