Why Ethereum?
After the start of our ICO a lot of people started to ask us — why Ethereum? Why are we using the Ethereum blockchain and not any other available system? We thought about it long and we decided to write an article about the use of Ethereum and why we are using it instead of other available platforms.
An ICO is essentially a program that collects cryptocurrency from contributors and, after reaching a target amount, distributes newly created tokens to the ICO’s contributors. In order to do so, the ICO needs a system that can be programmed to distribute the tokens without outside input. An ICO relies on common programming commands like conditional statements and loops to analyse, verify and respond to incoming transactions. These pieces of code need to integrate with the blockchain on which the ICO is built.
One major reason why Bitcoin is not Turing-complete is it doesn’t support programming loops, as a security measure. Loops would allow a denial of service (DOS) attack, since an attacker could tell miners to do infinite loops. However, this is a problem when it comes to implementing ICOs because loops are what allow programmers to verify and recalculate information. An effective crowdsale requires recalculating the total contribution after each new investor, closing the ICO when certain conditions are met, and distributing new tokens based on an algorithm–all features that require Turing completeness.
While using the Ethereum blockchain, Marginless can make your transactions fast and cheap, it will reduces high fees and and will also ensure high levels of international liquidity. Blockchain-based system is universal and ideal for any country, so there is no need in modifying the program for every region or in adopting specific payment methods. Use of a decentralized system eliminates the risk of fraud on the part of sportsbooks, the risk for an account getting blocked and problems with withdrawing funds for regular bettors. Also, blockchain highly reduces the costs of the infrastructure. Because of that, more funds can be used for the projects development.
Ethereum and blockchain in general is ideal for betting. With the use of blockchain, cryptocurrency provides the speed and anonymity that has made cryptocurrency ideal for people looking to wager safely and has given sports gamblers an alternative to traditional online books. The speed of cryptocurrency transactions makes using cryptocurrency sportsbooks a much safer option to everyone than traditional sportsbooks. You can deposit, wager, withdraw, and have your money back in an immediate control.
Firstly, Ethereum uses a complex data structure called a Merkle Patricia Tree to store a tree of program states, allowing for quick modification and verification of the various states required to execute an ICO. Instead of only containing a transaction ledger, the Ethereum blockchain’s multiple program states allows for the execution of smart contracts that automatically calculate the amount of funds raised, verify and confirm transactions, and distribute new tokens upon the completion of the crowdsale.
Second, Ethereum is Turing-complete, but it uses something known as “gas” payment to process the instructions in a program code. Gas provides incentives for people to supply their own CPU power to execute the programs on the Ethereum blockchain. If a program runs out of gas, it will be aborted. This prevents infinite loops and DOS attacks against ICOs, as every execution is eventually terminated. As a result, ICOs are more secure on Ethereum, and an attacker can’t deny service to your crowdsale based on a denial of service attack.
Ethereum offers a standardised way to create new tokens on its blockchain called the ERC-20 protocol. ERC-20 is not a piece of code, software, or technology. Rather, it is guidelines that facilitate the integration of various currencies.
Before ERC-20, each new cryptocurrency token created its own system for verifying account balances and initiating transfers. These systems included different functions and arguments that weren’t necessarily compatible with other tokens. Setting up a system to interchange between token types required carefully studying both sets of code to create a bridge so that the two systems could talk to one another.
Ethereum’s ERC-20 protocol changes all that. Now, all ERC-20 tokens can easily be interchanged with other ERC-20 tokens. ERC-20 tokens have the same functions, with the same names, that take the same arguments. They use a common set of rules and guidelines, that ensure the two currency systems will be able to talk with one another.
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