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What’s Ergo?

At Bitcoin.com Exchange, we’re very excited to support the team behind ERGO on their journey to create smart money for DeFi. If you’re unsure what this is supposed to mean or haven’t heard of Ergo, read on as we outline a few things to note about this crypto project.

Ergo was built with the vision to create a response to stagnation in the blockchain space. The platform provides efficient and secure ways to implement financial contracts, which are the most used type of contracts in crypto. Just think about all the smart contracts with the sole function of transferring some token if a certain condition is met.

The Ergo team isn’t just in for a quick gain but carefully has considered all their design choices and created a platform that will be survivable in the long term and offers ready-to-use products and services.

ErgoScript

Instead of building like many new projects these days on existing smart contract platforms such as Ethereum or Polkadot, ERGO is its own native blockchain that relies on its native scripting language, ErgoScript, to write smart contracts. ErgoScript is based on the BitcoinScript but making improvements on it to include more functionality (supporting smart contracts) and flexibility.

Autolykos

Like Bitcoin, Ergo runs on a Proof-of-Work algorithm where miners race to find a solution to a computational puzzle in return for block rewards. However, Ergo implemented its own mining algorithm: Autolykos that brings two major benefits to the network. Firstly, it makes the ERGO network ASIC-resistant.

ASIC (application-specific integrated circuit) is specialized software for Bitcoin Mining. While anyone could use spare computing resources for mining in the early days, the creation of ASICs drove many small-time miners out of the market.

Autolykos is based on the K-sum problem, which works similarly to Equihash Proof-of-Work. The algorithm also requires 4–8 GB of memory per miner, which throws off ASIC development because it’s not viable with high memory requirements.

Additionally, Autolykos introduces pool resistance. Mining pools are formed when various miners act as an entity to increase their chance of mining the next block. Mining rewards are usually distributed in proportion to the power each miner contributes. As mining became more commercial, big mining pools have gained a feasible foothold which poses a threat to the network's decentralization.

On Ergo, miners are required to share access to the wallet's private key to mine. If miners wanted to join forces, they would have to trust each other, as any one of them could take the funds and steal the ERG. Consequently, pool formation is disincentivized while keeping the network as decentralized as possible.

Light Clients

Running a full node in any blockchain for an individual can be quite challenging as computing requirements and keeping it online 24/7 might put people off. However, ERGO supports NiPoPoW to enable light clients.

NiPoPoW: non-interactive proofs of proof of work. These stand-alone strings that nodes can inspect to verify that a certain event has happened on a PoW blockchain—all without connecting to the blockchain network and downloading the history.

With light clients, more users can join the network, even with low-powered devices like a smartphone. They boast nearly the same functionality as full nodes and greatly benefit decentralization. Light clients are also a perfect choice for ERG holders looking to store their own cryptocurrency.

Apps

As a smart contract platform, ERGO supports the creation of decentralized Apps. Ergo was built with decentralized finance in mind and allows developers to create very specific financial contracts. They can even define the exact conditions when transactions can happen or who can transfer value. This offers a whole range of possibilities to bring DeFi and compliance with growing regulation together.

ERGO token ERG

The native platform token ERG provide stability and security to the network. ERG is paid as a reward to miners for participating in securing the network. The amount of ERG paid out to miners is decreasing over a period of 8 years until all ERG has entered circulation.

Afterward, miners will only receive ERG from transaction fees. Another potential avenue of revenue for miners is the “storage fee”. If coins aren’t moved for more than 4 years, holders will have to pay a storage fee on them. This incentivizes the return of the ERG into circulation to prevent situations like with Bitcoin, where up to 4 million are out of circulation due to lost access.

ERGO is run by an ambitious team and even captured the attention of Ethereum co-founder and Cardano founder Charles Hoskinson who calls it “one of the most revolutionary cryptocurrencies ever built.”

Trade the innovative crypto now with BTC and USDT pairs on our exchange.

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