Terry Ethereum (ethereum) is a digital platform that enables people to build a range of decentralized applications.
The Ethereum blockchain is similar to Bitcoin in that it is the transaction history. However, the Ethereum network also allows developers to build and deploy decentralized applications (‘dapps’). These are also stored on the blockchain along with the transaction records.
Smart contracts were originally used to refer to the use of computer systems (or other automated means) to execute contracts. For example, you can think of a vending machine as a smart contract to sell goods, executing a contract between you and the machine’s owner on how to buy a candy bar.
In the ethereum system, a contract is a program that exists in the blockchain. For a small fee, anyone can upload his program with a specific action to create an Ether contract. This contract is written in bytecode and can be executed by a special Ethereum-specific Virtual Machine (EVM). Once the contract is uploaded, it exists forever in the blockchain. The smart contract has its own money account, and other users can call the open application programming interface (API) inside the program, and the contract can send and receive money.
The security of the blockchain on ethereum is not yet as perfect as it is on bitcoin. Theoretically, Ether is more complex and harder to justify with mathematical reasoning.
In fact, Ether is just starting to develop and its security has not been tested as much as Bitcoin’s. In particular, there is a concern that the cost of processing transactions will invalidate Bitcoin-like incentives, a concern that we discussed in our analysis of co-mining. When transaction costs are no longer a negligible fraction of a miner’s total costs, large miners have a clear advantage because costs and hash power are independent of each other.
More importantly, the fuel is only paid to the miner who originally included the block in the transaction. But all miners who build blocks on top of that have to verify the block without getting paid for it. This means that they will have an incentive to skip that validation. As we’ve seen before, this is not conducive to a healthy blockchain system.
Unlike traditional apps, they don’t require a middleman to function. Since they are still a relatively new concept, it is difficult to pin down their exact definitions. However, obvious common characteristics include the fact that they are open source (governed by autonomy) and decentralized.
These applications include security procedures, voting systems and payment methods. Like Bitcoin, Ethereum operates outside the mandate of central authorities such as banks and governments. Ethereum is an open software platform based on blockchain technology. This blockchain is hosted on many computers around the world, which makes it decentralized.
Ethereum is designed to be scalable, programmable, secure, and decentralized. It is the blockchain of choice for developers and enterprises, who are creating technology based upon it to change the way many industries operate and the way we go about our daily lives.
Ethereum is a platform and a programming language on which developers can build and distribute the next generation of distributed applications. While building on Bitcoin, a pioneer, Ethereum is expanding into new areas, both at the decision level and at the execution level. While Bitcoin has intentionally limited its scripting language, Ethereum’s programming language allows everyone to implement more functionality. In addition, Ethereum’s serialized development tools are sought after by developers.
Most importantly, Ethereum is trying many brand new things, although most of them are experimental, and we can see the list of apps made by developers from all over the world. This list is currently expanding rapidly. Ethereum represents, to some extent, the cutting edge of digital currency development.
As a digital currency, Ethereum is the cryptographic fuel that drives distributed applications on the Ethereum platform. Like Bitcoin, Ethereum is issued through mining, but the number of issues per year remains the same. The number of Ethereum issues per year is 0.3 times the total number of Ethereum pre-sold.
Although the number of Ethereum issues per year is certain, the total amount of currency does not grow at a fixed rate. Every year, a certain amount of Ethereum is lost due to the loss of private keys, and the loss rate reaches 1%.
For example, the owner did not tell the private key to others before his death or deliberately sent the Ethereum to an address without the private key, causing a drop in the number of Ethereum. If we assume that 100,000 Bitcoins worth of Ethereum will be sold in a pre-sale, and the price per Bitcoin equals 600 Ethereum, then 60,000,000 Ethereum will be created in the founding block and distributed to the purchaser. Since the number of Ethereum issues per year is 0.03 times the total number of pre-sales, 18 000 000 Ethereum will be issued every year by mining.
Considering the number of new issues and the rate of loss, the inflation rate of Ethereum is 22.4% in the first year, 18.1% in the second year, and in the tenth year, the inflation rate drops to 7.0%. In the thirty-eighth year, the inflation rate was 1.9%, and in the sixty-fourth year it dropped to 1.0%.
Around the year 2140, Bitcoin almost stopped being issued. Since some bitcoins are lost every year, the total number of bitcoins will continue to decline. At the same time, the annual rate of Ethereum loss will balance out with the rate of issuance.
In dynamic equilibrium, the total amount of Ethereum in existence will no longer increase. If the economic expansion causes the demand for Ethereum to continue to grow, then the price will enter a deflationary mechanism. The resistance of the Ethereum system to deflation is very strong, because Ethereum can be infinitely subdivided.
As long as the deflation is not particularly drastic, the price mechanism will make adjustments to ensure the smooth operation of the Ethereum system. In an era of unbridled fiat currency issuance, people should be more eager for a digital currency that can eventually act as a relatively stable value memory. Ethereum identifies with this value and tries to thrive under this core value proposition.
Ethereum is acutely aware that a consensus-based platform for distributed applications must focus on inclusiveness. And maintaining a churning distribution system is a fundamental way to foster inclusivity. Developers of the Ethereum system can buy or develop new Ethereum, whether they live in 2017 or 2027.
We believe that a constant Ethereum distribution will allow for greater benefits to be gained from using Ethereum to create businesses within the Ethereum economy than from speculative coin depositing, especially in the early years of Ethereum’s development.
