** Introduction **
Ethereum is one of the most popular cryptocurrencies. Due to its functionality, it was once called "Bitcoin 2.0". The project was initiated by the Russian programmer Vitalik Buterin, who, inspired by blockchain technology used in the Bitcoin network, wanted to create a decentralized application design network. At the time of developing Ethereum, Vitalik was only 22 years old. The Swiss network company Ethereum Switzerland GmBH took care of the network design. Funds to start the project were raised by selling the first ETH tokens on a crowdfunding basis through ICO. The collection lasted 42 days (from July 20, 2014 to September 2, 2014). During the first 14 days, 2000 ETH was received for each BTC issued. Later, this value decreased linearly to 1337 BTC. Finally, 31,529 BTC was collected, which was the equivalent of USD 18,439,086, and investors received a total of 60 million. ETH. Currently, after the division of the network, which is the result of the hard fork carried out in 2016 and the lack of agreement between all network users, we have two currencies: Ethereum (ETH) and Ethereum Classic (ETC). Ether, unlike Bitcoin and many other cryptocurrencies, has no limited supply (number of units), which means it is inflationary. There is no typical maximum block size in the Ethereum block network (e.g. 1 MB in BTC). Instead, each block requires a specific amount of Gasu, which determines the computing power needed to complete the transactions it contains. A simple transaction (ETH transfer) requires a minimum of 21 thousand Gas, while more complex operations related to smart contracts and decentralized applications are much more resource-consuming and need more Gas units to implement.
Constantinople Hard Fork was approved by developers on August 31, 2018. The changes were expected to come into force in October, however, a major consensus error was noted in the test network called Ropsten. Hard fork postponed. On December 7, 2018, it was announced that the changes would take place in 2019. The developers decided that the Constantinople update would be carried out at transaction block 7,080,000. The implementation of the update was once again suspended because a critical security vulnerability was detected inside one of the planned changes. ChainSecurity audit indicated that there was a vulnerability in the update code that allowed users to steal funds. Thus, the implementation of the hard fork has been postponed.
Changes to be implemented with Constantinople:
EIP 145 - technical update. It is associated with more efficient information processing in smart contracts. Generally, it does not arouse any controversy;
EIP 1052 - is responsible for the optimization of code implementation in the case of complex smart contracts, thanks to which only the most important contract codes are checked at random, not the whole. Will improve developers' work on smart contracts;
EIP 1283 - also applies to smart contracts, as it introduces a modified GAS fee structure for developers. It is to lead to a reduction of fees where no real operations took place or where they involved the use of small resources. This will reduce the costs incurred by developers when creating smart-contracts. In the future, it is planned to introduce fees for users storing their data on blockchain (rent fees);
1014 - this is a change developed by Vitalik himself. It aims to improve the scalability of Ethereum - i.e. a significant increase in the number of transactions processed per second (t / s) based on the so-called state channels and transactions carried out outside the main blockchain (offchain). As a result, the network's capacity and capacity will increase. Buterin sees this as the future of the project and the entire market;
EIP 1234 - update causing the most controversy, because it reduces the pay for mining the block from 3 to 2 ETH, but at the same time delays the "mining difficulty bomb" by 12 months. Originally, the goal of the creators of the Ethereum project was to switch from reaching consensus within PoW to PoS - the so-called Casper. The author of EIP 1234 - Afri Schoedon, called him "the best proposition to stabilize emissions while delaying the bomb." Opponents of reduced pay for mining the block are afraid that lower profits will lead to centralization of the Ethereum mining sector, which may also be caused by the widespread use of specialized ASIC units in the process of mining
** Idea **
Ethereum is not just cryptocurrency. It is a whole platform based on Blockchain technology, which, apart from the possibility of using it as a means of payment, allows anyone who wants to create an application and make it available. It serves, among others for concluding smart contracts and creating applications using a decentralized peer-to-peer network. This network consisting of nodes created by users is called EVM (Ethereum Virtual Machine). It enables crowfunding through ICO (Initial Coin Offering) and the creation of decentralized and autonomous organizations (DAOs). While Bitcoin offers a single application, Ethereum serves users as a platform to run any number of decentralized applications. The possibilities of the platform itself are therefore practically unlimited. The token that is the means of payment is 1 Ether (1 ETH).
** ** Competing projects
Ethereum is currently facing such projects as EOS, NEO, Cardano, Aeterenity, ICON, Lisk, Stratis and Waves - these are definitely advanced projects, and these are only some of ETH's direct competitors.
** Use of the ETH coin **
Ethereum is used to conclude Smart Contracts and create decentralized applications. The Ethereum protocol is an excellent environment for creating new and innovative solutions for companies wanting to ensure maximum security resulting from decentralization and ease of restoring the database.
** ** Mining
Method of creating new coins: Ethereum is based on the PoW (Proof of Work) protocol. The Ethash algorithm allows mining on both GPU and CPU. In the future, Ethereum is to be extracted using the PoS (Proof of Stake) method. The change is to ensure greater scalability and security of the cryptocurrency. The Casper algorithm is responsible for this, the introduction of which is planned for mid-2019. Currently, the prize for digging the block for miners is 3 ETH, but after implementing the hybrid Casper FFG protocol, it will be reduced to 0.6 ETH, and every 50th block in the network will be confirmed by so-called Validator using the Proof of Stake consensus algorithm. Validators will also receive a reward for the block - it will initially be 0.82 ETH, ultimately seeking a reduction at the time of full implementation of Proof of Stake.
** ** Summary
Due to the key importance of Ethereum on the cryptocurrency market, it seems perfectly normal to compare ETH with even BTC or Ripple. Both are based on blockchain technology, which assumes the formation of block chains one by one. These are certainly revolutionary tools, however, it should be remembered that Bitcoin blockchain has only one application in its offer - concerning cryptocurrency. In turn, Ethereum serves all users, being a platform to run any number of decentralized applications. This also makes it a network with virtually unlimited possibilities.
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