In one of his speeches, Steve Wozniak said that the chain of Ethereum blocks can be compared in importance with Apple. It sounds impressive, but if everyone knows about the bitten apple, then with the crypto-currency etherium and its network, the general public is hardly familiar. What is this platform, why is it so important, and how its token can shift bitcoin from the podium?
How did the etherium appear?
The name of Vitalik Buterin became known to the Russian masses after his speech at the St. Petersburg International Economic Forum, as well as intimate conversations with Russian officials and personally Vladimir Putin about the future of the Crypto-currency. But he has known the community of crypto-enthusiasts for a long time.
The Canadian of Russian origin became famous among like-minded people back in 2011. Then he became one of the founders and authors of the first printed edition of the blockbuster and crypto-currencies Bitcoin Magazin. Publications in the magazine Buterin was not limited and in late 2013, he proposed the concept of a platform for creating decentralized applications. With this platform, it became possible to expand the functionality of the network by supporting the scripting language.
But the community did not support Vitalik’s innovative idea, and so he decided to launch his own crypto currency. In a few months, the enthusiast assembled the team and, together with colleagues, organized the ICO, during which start-ups received funding of 31,000 bitcoins or about $ 18.5 million.
The first version of the Ethereum system the world saw on July 30, 2015. At first glance, it differed little from the network of cryptozolot and the mechanism of its operation. This is the same blockage with coin mining and the ability to quickly make a transaction with coins for a small commission, the size of which is set by the user himself. The miners are still doing the validation of the network blocks and get paid for it. Ephyrums can also be used as a means of payment in a regular store, but this is not a key goal of the existence of its network.
What can Ethereum do?
Strictly speaking, he himself does not do anything special. But everyone can use it as a giant decentralized virtual machine. In other words, in order to get all the advantages of a block to solve your problems, you do not need to create your own network. You can use the finished system Ethereum.
Manage its resources allow smart contracts. This is code written in the original Solidity programming language. The developer sets the script, built on the principle of “if something”, and the nodes of the blockade execute this program in an automatic mode with the recording of the results of each operation on the network.
This innovation allowed the creation on the basis of Ethereum applications that work strictly in accordance with the established algorithm without failure, censorship, fraud and third party participation. If one of the nodes that execute the smart contract stops working, the stability of the application as a whole will not affect it in any way. Data obtained as a result of the implementation of the smart contract, too, remain unchanged. Together with the entire block, they are reliably preserved due to the distribution between thousands of nodes.
The functionality of the Ethereum network allows:
- Form complex smart contracts for the management of supply chains.
- Run various applications, from utility programs to games.
- Turn any types of assets into tokens, including precious metals and stones.
- Create user authentication services, authenticate documents, etc.
- Organize a decentralized asset exchange.
In theory, Ethereum can even launch an e-voting system in political elections. True, no one has done this yet.
How did Ethereum provoke a boom in the ICO market ?
Not everyone knows about this, but the etherium is not the only crypto currency that works on the Ethereum blockhouse. Everyone can create their own tokens on its basis. This is another key feature of smart contracts. True, the release of their own user coins should provide for a fixed number of coins, and can not be dropped.
For all tokens, the ERC-20 standard is installed. It contains a set of rules for creating coins based on Ethereum. Their compliance is necessary for the normal interaction of tokens with the system. Why do you need to know this? For example, then, that it was the introduction of the ERC-20 standard that provoked an explosive growth in the number of block-startups in 2016-2017 and turned this subject from underground into a popular one.
It was relatively easy and cheap to create your own coins. Young projects seized on this opportunity as a way to quickly and cheaply launch their applications with original tokens and raise funds for company development (ICO). They sell their coins to investors in the same way that ordinary enterprises with shares do, but only for a digital currency.
What is the value of the crypto currency etherium?
Bitcoin is often called a financial bubble, referring to the fact that it is not provided with anything. The question is controversial, but similar statements about the etherium are difficult to find. Why?
February 28, 2017 was announced the creation of a non-profit organization Enterprise Ethereum Alliance, which is now exploring the use of blocking Ethereum for corporate needs. But pay attention to the members of this alliance! It includes Intel, Microsoft, JP Morgan and several other major technology companies and financial institutions.
Why is this important in terms of the value of the etherium? The fact is that in the existence, practical application and development of the Ethereum platform, not only the crypto community is interested, but also a huge army of network users. And among these most users are giant companies with colossal capital.
Access to the resources of the detached unit is not provided free of charge: for each transaction you have to pay a commission. It is measured in units of gas (gas). For all computing operations, a fixed rate is set depending on the complexity. But you need to pay for this gas in the airs, and the cost of each unit of “fuel” is set by the user himself. The more the price of execution of a smart contract, the higher its priority and processing speed.
So, every user of the Ethereum block account needs to have the necessary amount of crypto currency etherium. With the growing number and complexity of applications running on the network, the natural demand for her native token also increases. High interest in the project from large corporations and expansion of the practical application of Ethereum make the etherium more popular and valuable.
What will happen to the etherium course?
In 2018, the Chinese Center for Information Industry Development began to publish its rating of public detachments. Analysts estimate 28 top decentralized networks on three criteria: innovation, technology and application. And the first place researchers from China give the platform Ethereum, while bitcoin, for example, could take only the 13th position.
This suggests that the potential of the project is far from exhausted, and there are still no dignified competitors. The number of those wishing to use the resources of the finished decentralized network is increasing at an increasing rate, and most of them choose Ethereum. Therefore, the demand for crypto currency is great and tends to grow.
A sharp rise in the price of a coin is hampered by a continuous and unlimited emission. If the production of bitcoin is guaranteed to stop at around 21 million, then the mining of etheriums does not have such a limit. However, the volume of production, that is, the number of new tokens in the coming years will fall. This is due to global changes in the protocol Ethereum.
The developers outlined a gradual abandonment of the usual mining in favor of confirming transactions based on the Proof of Stake algorithm (proof of the share). This will help improve network scalability and transaction processing speed, and will slow the production of new etherium coins. That is, the growth in demand for a token (coins) promises to significantly exceed the volume of their release. The consequence of this will inevitably be an increase in the price of coins.
As far as the etherium course will grow in the coming years, no one will say with certainty. Reddit co-founder Alexis Ohanyan, for example, believes that in 2018 he will reach $ 15,000 and beat bitcoin. The forecast is very optimistic, considering that the etherium lags behind the cryptozolite by more than 1000%. But in the perspective of 2-3 years this scenario seems quite real.
Does this mean that you need to urgently quit buying an etherium? Not really. First, it suffers from a relatively low transaction processing speed. The load on the network is rapidly increasing, and there is not enough resources. Developers are working on solving this problem, but the ideal solution is not yet available.
Secondly, the Ethereum network has serious competitors. For example, the EOS platform has similar functionality, but its creators, according to their own assurances, found successful ways to eliminate the “childhood diseases” Ethereum. It’s funny that the EOS project originally created its own tokens and collected the investments using the block system of the etherium. Now, some call him the “killer” of the Ethereum platform.
This is not the only potential competitor of our hero. How successful are the rivals, and whether they can overcome Buterin and Co, is still unknown.
How to buy airwaves?
For rubles and other fiat money this crypto currency will be able to buy:
- Through the online exchanger. The key advantage of this method is simplicity, and the main drawback is not the most profitable course.
- On a P2P platform, for example, localethereum.com. It’s about buying coins directly from the owner through a service that serves as a depositary and an arbitrator. If the seller turns out to be dishonest, the platform will fulfill its obligations. To the security of the transaction, it is possible to find an offer with a sufficiently favorable rate of the koin.
- With the help of Telegram-bot. Services like ChangeBot work the same way as P2P platforms do.
- On a decentralized exchange. Only here you can buy a crypto currency at the market price, although we should not forget about the platform commissions. For rubles you will sell the etherium on Livecoin or EXMO.
To buy, store and transfer koin need a purse. On the official website, you can download a customer for a coin from its developers Ethereum Wallet. This is a desktop purse for those who are ready to sacrifice mobility in favor of security. If you need constant access to coins, it is better to choose online service myetherwallet.com or analogues.