Ethereum Basic Knowledge

Ethereum Basic Knowledge

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It is time to discuss the second-largest blockchain platform behind Bitcoin: Ethereum and its token Ether. In this article, we will dive into general differences, ERC20 code, and future trends of this network.

So, what is Ethereum? It is a platform offering to create decentralized applications (dapps), and ether playing as an internal token, which helps to run decentralized apps. The capitalization of Ethereum exceeds $35 billion and is available on the majority of exchanges.

 

A decentralised application is an open-source app where the presence of intermediary is not required as blockchain solves this problem. The assertive point of decentralised application is the ability of users to directly participate in the performance of a program, and for providers to execute better service.

 

The Ethereum system is based on ‘smart contracts’, which means those that are given automatically executed codes when conditions are met. These smart contracts are operated on the blockchain, and cannot be modified, changed, or deleted after execution.

 

The standard of such smart contracts is called ERC20, which is generally a set of conditions required to comply with by future tokens. That means that there will be a fully transparent open-network technology based on Ethereum blockchain. For now, there are 6 conditions in ERC20, which every system need to match in order to get the standard.

 

You can purchase ether on almost every exchange platform, but there are significant differences between Ethereum and Ethereum Classic. Back in 2016, users found and exploited a weakness in the platform, which led to the loss of $50 million in ethers. After community vote, users agreed to the need of hardfork in order to fix the issue, but some expressed reluctance to the change. Later, this reluctance led to the creation of Ethereum Classic run by a different team.

 

At present, Ethereum supports mining in its traditional sense, but during 2018 users should expect to switch from proof-of-work to proof-of-stake system. This will shift conventional understanding of mining to another level. Proof-of-stake will allow having faster, more secure, and more efficient transactions between clients.

 

As in the case with Bitcoin, you can have several wallets to store ethers. You can have software wallets, which require the installation of applications. This option has a mid-security as individual devices can become a subject to hackers. One more option is an online wallet, which is even less secure, but more comfortable to work with. The most secure wallet, for now, is a hardware wallet (which can be a USB flash drive, hard drive, or any other memory storage device).

 

In mid-2018, some experts expressed an opinion of Ethereum-based ICOs switching to a different framework in future. EOS air drops will become a more popular business model, as it offers both investors and projects more opportunities through free distribution of tokens/coins. Whether it will be true or not, today we can face some companies selling their crypto through the different system.

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