Following the twitter poll, we will be bringing you our take on Ethereum $ETH. Let us know what you think and please like and share!
INTRODUCTION
Ethereum is well established as the second largest crypto platform with a current market capitalisation of around $30 billion (around 24% of the size of bitcoins market cap). There is so much to talk about with this project, so we will briefly discuss the basics, and then look in more detail at smart contracts and proof of stake consensus mechanism.
BASICS
Ethereum was invented by Vitalik Buterin who used the inspiration of bitcoin to expand the blockchain into more diverse areas. Buterin is a great sauce of knowledge in the crypto space so be sure to check him out! Let’s look at what Ethereum offers. If the vision of Bitcoin is to disrupt and revolutionise the financial world, then Ethereum attempts to do the same for countless other industries. This would be achieved mainly through the dream of smart contracts which attempts to bring the trustless nature of the blockchain to industries such as energy, supply chain and social media. Ethereum is designed to be open-source, so anyone can use it and develop their own platform from this. Many crypto projects use the Ethereum ERC20 tokens, these are tokens that are based on the Ethereum network, but become unique to the project.
PROOF OF STAKE
Bitcoin’s energy consumption is thought to be similar to that of Columbia and this is only growing as adoption increases. Ethereum agreed upon a vision which did away with proof of work (the solving of complex problems to mine and validate blocks) in favour of a system that uses stakes to solve the problem. With the proof of state mechanism, stakes are put forward to validate each block, and whoever has the largest stake effectively wins that block and is given the reward. This is an interesting split between Ethereum and Bitcoin, it appears like it is too early fall down in favour of either PoS or PoW, however the energy consumption of PoW is certainly a factor of some concern.
SMART CONTRACTS
This is a key feature of the Ethereum vision and looks to remove trust from contract agreements. This means that transfers can be made automatically upon the completion of some predetermined conditions. For example, musicians that are paid based upon the number of listens their songs get could be guaranteed to receive this automatically as people listen to their music. This programmability of the blockchain means that people can put their own creativity into the space and come up with some really interesting projects.
VERDICT
Ethereum was a groundbreaking project in expanding the horizons within the crypto space, this can’t be underestimated. Ethereum, for me, is essential to widespread adoption of cryptocurrency as it brings the blockchain to a much larger market. The main question mark of Ethereum’s future as second to Bitcoin depends on the preference of developers, will they stick with Ethereum or move onto newer platforms such as Neo or Tezos.
500 words isn’t much to talk about such a large project as Ethereum so ive listed some previous Alt500 articles and opinions from journalists in the space if you’re interested in learning more!
LINKS
Take a look at my previous article on MWAT for more information on how Ethereum based tokens can work: https://medium.com/@edward.davison.97/alt500-2-restart-energy-dc27f7258aa8
Ethereum whitepaper: https://www.ethereum.org/
If you’re interested in a point of view that argues that Ethereum and smart contract capabilities might not work, have a listen to Jimmy Song on Laura Shin’s podcast: http://unchainedpodcast.co/jimmy-song-on-why-bitcoin-will-be-the-winning-cryptocurrency-ep69
