Ethereum (ETH) Cryptocurrency and Blockchain Guide
What is Ethereum (ETH)?
Ethereum is a public, open-source, blockchain based software cryptocurrency platform and operating system with smart contract functionality that allows developers to build and deploy decentralized applications on its Proof-of-Work blockchain. The native cryptocurrency of Ethereum is called “Ether” and can be traded on cryptocurrency exchanges under the “ETH” ticker symbol.
Full name: Ethereum
Chinese Name: 以太坊
Ticker Symbol: ETH
Coin Price: Latest ETH Price
Founder: Vitalik Buterin
Prominent Group: Ethereum Foundation
Consensus Protocol: Proof-of-Work (PoW)
Speed: Around 15 TPS
Max Coin Supply： No limit
Block Explorer: etherscan.io
Ethereum’s founder, Vitalik Buterin was born in a Russian town of Kolomna on 31 Jan 1994 and emigrated to Canada with his parents at the age of 6. He developed an interest in programming and learned about Bitcoin from his father when he was 17 years old. Later, he spent a lot of time researching cryptocurrency technology on Bitcoin related forums and visited Israel in 2013 to explore the possibility of using blockchain for various applications.
Eventually, Vitalik Buterin realized that it is possible to create a new blockchain based operating system that can allow developers to build decentralized applications (dapps). He argued that the functionality of Bitcoin was limited and it lacked of a scripting language to develop applications. Hence, he shared his ideas with others and proposed developing a new blockchain ecosystem called Ethereum after discovering the name from a science fiction article on Wikipedia.
The Core Team
In January 2014, Vitalik Buterin and his core team consisting of himself, Anthony Di Iorio, Joe Lubin, Gavin Wood, Mihai Alisie and Charles Hoskinson announced the Ethereum project at the Miami North American Bitcoin Conference. Charles hoskinson left the team 6 months later after Vitalik announced that Ethereum would be a non-profit project.
In July 2014, the team held a crowdsale to sell Ethereum’s native coin, Ether (ETH), with an initial discounted price of 2000 ETH per Bitcoin (BTC). $18.4 million was successfully raised for development and was reportedly the third most successful crowdfunding campaign to date. Vitalik Buterin and his team managed to launch Ethereum with its live network on 30th July 2015.
The DAO Hack
On 17 June 2016, unknown criminals exploited one of the Ethereum vulnerabilities and stole 3.5 million ETH tokens (worth around $50 million USD) from The DAO accounts. The DAO (Decentralized Autonomous Organizations) was a venture capital fund that was stateless and developed by users on the Ethereum ecosystem. The DAO had earlier raised around $150 million funds reportedly from more than 11,000 members, becoming the largest crowdfunding project in history.
Although the Ethereum main development team was not involved with the DAO crowdfunding project, they had to deal with its mess. A debate commenced between the Ethereum community, the main development team and the DAO members if a coding hard fork should be executed to move the stolen ETH tokens to a new smart contract with the objective of restoring them to the rightful owners. Unfortunately, significant number of members opposed the hard fork and the participants could not come to an agreement.
The anti-fork members were partly from the Ethereum community and they strongly believed that blockchain should be immutable as well as “code is law”. The pro-fork members instead advocated on decentralized decision-making to solve problems and conflicts. A vote took place to finalize the resolution and the pro-fork camp won.
The anti-fork camp disapproved the verdict, continued to use the unforked Ethereum version and renamed it to Ethereum Classic. Classic miners gave birth to a new independent blockchain and a new cryptocurrency called Classic Ether (ETC) by mining the first Ethereum Classic block at block number 1920000. On the other side, the pro-fork camp implemented the hard fork at ETH block number 1920000 and restored the stolen tokens. As the majority, they were able to retain the Ethereum name for the ecosystem as well. For this reason, ETH and ETC blockchains are identical in every detail up until block number 1920000.
Ethereum uses the same Proof of Work (PoW) mining process and consensus protocol as Bitcoin. Miners compete with each other to solve mathematical puzzles, the winner will get to validate transactions and create a new block on the blockchain to earn new ETH cryptocurrency reward. Ethereum mining is mainly done with GPUs while bitcoin professional miners use ASIC mining rigs.
ETH vs BTC
The difference between Ethereum and Bitcoin is block creation time. Bitcoin’s block creation time is limited at 10 minutes while Ethereum’s block creation time is around 14 seconds. BTC founder, Satoshi Nakamoto designed Bitcoin to have block creation target of 10 minutes for allowing the blockchain more time to propagate new block to the entire network before creating another block. Bitcoin’s block creation time of 10 minutes is to prevent block orphaning on the blockchain by invalidating one of the block if two or more blocks are found at the same time.
Ethereum on the other hand allows orphaned block to be accepted into the blockchain which will result in faster block creation time. Miners who include orphaned blocks will get slightly more block rewards but lesser rate of return for mining a more difficult block that will result in a longer chain. Some Bitcoin supporters argued that faster block time results in a less secure network and that a single bitcoin confirmation is more trustworthy as compared to an Ethereum confirmation.
Ether, popularly known as the fuel that runs Ethereum, is a cryptocurrency generated by the Ethereum platform on the blockchain. Ether’s abbreviation is ETH and it can be used as a form of cryptocurrency payment made by the clients of the platform to the machines executing the requested operations. Ether's block time creation is around 14 to 15 seconds, compared to 10 minutes for bitcoin.
Ether coins had the second largest cryptocurrency market cap of more than $27.9 billion USD with a total coin circulating supply of around 106 million as of 03 June 2019. At present, there is no implemented hard cap on the total supply of Ether.
Ethereum blockchain based programs are referred to as smart contracts and participants will need to initiate transactions to create and use these smart contracts. Gas is designed to counteract network spamming and pay for transaction fees with Ether (ETH) on the Ethereum ecosystem. Gas exists only inside of the Ethereum Virtual Machine (EVM) and is not an actual token, meaning no one can own, for example, 2000 or 4000 gas. When a participant submits a transaction, he/she pays for gas units in terms of ETH by specifying how much ETH tokens to pay per gas unit.
Do note that ETH coin fluctuates in price but price of different services in terms of gas units stay the same. Some users argued that the system should just measure the cost in ETH directly, but cryptocurrencies including ETH, fluctuates in price too rapidly. Separating the computation price from the ETH price will free the system from changing the operation cost every time the Ether price change.
Users who pay higher gas fees will be prioritized by miners to verify and complete their transactions earlier. Miners will understandably pick the transactions with the highest fees first because they need to make a living too. If a user offers a transaction price that is too tiny in amount, his/her transaction may not be included in the blockchain.
Smart Contract Languages
ERC-20 Technical Standard
ERC-20 is the technical standard used by all smart contracts that are using the Ethereum blockchain. ERC-20 technical standard defines a complete list of rules that all tokens must comform to within the Ethereum ecosystem. ERC-20 token standard became popular with organizations that were looking to raise funds through Initial Coin Offering (ICO) crowdfunding. The reason is that ERC-20 technical standard is not complicated to be deployed and there is interoperability potential with other Ethereum token standards. Among the most well-known ERC-20 token sales were launched by the EOS and Tron teams to raise funds for their cryptocurrency and blockchain developments.
[Rating: 4.0 ]
★ ★ ★ ★ ★
In Vitalik Buterin I trust. He is a genius. When everyone in the world is still figuring out who Bitcoin’s MIA founder is, Vitalik is still kicking and influencing the blockchain technology, he is the biggest name in the crypto world and the best person to address all crypto problems. I am 100% convinced that he and his ETH invention will make the world a better place.
Jordanlma (15/08/2018 11:44:41 AM):
Ethereum Network is rather slow, I need to wait quite long for every executed actions on its ledger especially for its games. EOS is so much faster and provides a more seamless experience. I am more confident in eth’s security and decentralized strength but its speed is not there yet. Until the development team increases its speed, its adoption is not going anywhere.
NeoSkywalker (07/07/2019 5:21:55 PM):
★ ★ ★ ★
I played 0xUniverse, love it! Probably one of the most successful games created from the Ethereum platform. This is so much better than Crypto Kitties and has a lot of potential. Keep up the good work!
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