What Is An Ethereum Token: The Ultimate Beginners Guide
What is An Ethereum Token: The Ultimate Beginners Guide Angel Investors, Startups & Blockchain developers... To a beginner, the entire concept of Ethereum and Ethereum token can get very confusing very fast. The idea that Ethereum not only has its own currency (Ether) but also has tokens on top of that which can act as currency themselves, can be a little mind-boggling. Before we even begin understanding what Ethereum tokens are all about, its important to grasp some basic concepts. The entire Ethereum network is a giant mass of nodes (computers) connected to one another. In fact, the entire network can be visualized as a single entity called the Ethereum Virtual Machine or EVM for short. All the transactions that have happened and will ever happen in this network are automatically updated and recorded in an open and distributed ledger. So what is the advantage of this? Before we explain that it is important to know what a smart contract is. Smart contracts are how things get done in the Ethereum ecosystem. When someone wants to get a particular task done in Ethereum they initiate a smart contract with one or more people. Smart contracts are a series of instructions, written using the programming language solidity , which work on the basis of the IFTTT logic aka the IF-THIS-THEN-THAT logic. Basically, if the first set of instructions are done then execute the next function and after that the next and keep on repeating until you reach the end of the contract. The best way to understand that is by imagining a vending machine. Each and every step that you take acts like a trigger for the next step to execute itself. It is kinda like the domino effect. So, lets examine the steps that you will take while interacting with the vending machine: Step 1: You give the vending mac Continue reading >>
Eli5: What Do We Mean By Blockchains Are Trustless?
ELI5: What do we mean by blockchains are trustless? Source: Many of us are guilty of describing blockchains as trustless systems. However, Ive come to realize that the term trustless is ambiguous, confusing, and most importantly, inaccurate. Blockchains dont actually eliminate trust. What they do is minimize the amount of trust required from any single actor in the system. They do this by distributing trust among different actors in the system via an economic game that incentivizes actors to cooperate with the rules defined by the protocol. A truly trustless transactional system would look something like this: Two people who are interested in transacting with one another change hands directly. They are physically present, and therefore can easily verify Authenticity: the actual sender is handing over the money, and No double spending: the money is not fake, its a real $10 bill While theoretically flawless, this transactional system is limited. Consider: two individuals may trade with one another only when they are in close physical proximity. For economies to function at scale, a transactional system should enable transfers with anyone in the world, regardless of distance. As you can see from the diagram above, the way we achieve this aim is by having an intermediary who can facilitate the transfer of value to make sure that the actual sender is sending the money and the money is real. This begs the question: who serves as the wholly trustworthy intermediary? In modern day transactional systems, the intermediary can be a bank (e.g. Chase Bank); a payment provider (e.g. Paypal); a remittance company (e.g. Western Union); a credit card (e.g. Visa), and so on. In this centralized model, the bank authenticates you, and guarantees the recipient that they are getting real mo Continue reading >>
What Is A Decentralized Application?
Internet users don't have sole control over the data they share on today's websites. Ethereum is unique in that it attempts to wield the blockchain as a way to correct what its designers believe is a problematic part of the internet's design. It's like a decentralized appstore where anyone can publish their unstoppable apps (dapps), which unlike todays apps (think Gmail or Uber) dont require a middleman to function or to manage a users information. Dapps connect users and providers directly. One example is to use this design for a decentralized Twitter thats resistant to censorship. Once you publish a message to the blockchain, it cant be erased, not even by the company that created the microblogging system. There isnt one definition of a dapp, though, as its a newer concept. A couple of main characteristics are that they're open source and don't have a central point of failure. With this new technology out in the wild, ethereum advocates might feel electrified by the thought of decentralizing "all the things." But the types of applications that users can build with the computing platform might be somewhat narrow. The ethereum white paper splits dapps into three types: apps that manage money, apps where money is involved (but also requires another piece), and apps in the other category, which includes voting and governance systems. In the first type of app, a user may need to exchange ether as a way to settle a contract with another user, using the network's distributed computer nodes as a way to facilitate the distribution of this data. The second type of app mixes money with information from outside the blockchain. For example, a crop insurance application that's dependent on an outside weather feed. (Say a farmer buys a derivative that automatically pays out if ther Continue reading >>
Consensus - What's The Difference Between Proof Of Stake And Proof Of Work? - Ethereum Stack Exchange
What's the difference between proof of stake and proof of work? The Ethereum frontier network currently uses a proof of work (PoW) consensus algorithm, while a future version of the network plans to utilise a proof of stake (PoS) algorithm instead. What's the difference between these two types of algorithm? This is a sort of test question, since it could fit either on this stack exchange or the bitcoin stack exchange. I'm curious to see whether we consider this on- or off-topic. Jeff Coleman Jan 20 '16 at 21:57 I think it is definitely on topic, the POS transition is a major network feature Tjaden Hess Jan 21 '16 at 2:16 Let us start by what they have in common: they are both algorithms for reaching consensus on the blockchain. Without going into too much details, we need consensus because anyone can create a block; while we only want an unique chain, so we want a way to decide which block we should trust. Proof of work has the nice property that you can use Bayes' Theorem and the laws of Thermodynamics to prove that a given block has indeed required a certain amount of work to be mined. That way, users can simply pick the longest valid chain with the highest amount of work as the correct chain. But this implies that Proof of Work is extremely inefficient in term of energy, and therefore also very expensive; which incentivize miners to centralize the hashing power -- obviously not desirable for a network whose goal is to minimize the need to trust third parties. Proof of Stake isn't about mining, it's about validating. In effect blocks still need to be created by someone, and who gets to create the next block depends on the specific Proof of Stake algorithm, but the selection process must have some kind of randomness, or at least distribute voting shares properly (othe Continue reading >>
What Is Ethereum? Ethereum Classic 0.1 Documentation
Ethereum is an open blockchain platform that lets anyone build and use decentralized applications that run on blockchain technology. Like Bitcoin, no one controls or owns Ethereum it is an open-source project built by many people around the world. But unlike the Bitcoin protocol, Ethereum was designed to be adaptable and flexible. It is easy to create new applications on the Ethereum platform, and with the Homestead release, it is now safe for anyone to use those applications. Blockchain technology is the technological basis of Bitcoin, first described by its mysterious author Satoshi Nakamoto in his white paper Bitcoin: A Peer-to-Peer Electronic Cash System, published in 2008. While the use of blockchains for more general uses was already discussed in the original paper, it was not until a few years later that blockchain technology emerged as a generic term. A blockchain is a distributed computing architecture where every network node executes and records the same transactions, which are grouped into blocks. Only one block can be added at a time, and every block contains a mathematical proof that verifies that it follows in sequence from the previous block. In this way, the blockchains distributed database is kept in consensus across the whole network. Individual user interactions with the ledger (transactions) are secured by strong cryptography. Nodes that maintain and verify the network are incentivized by mathematically enforced economic incentives coded into the protocol. In Bitcoins case the distributed database is conceived of as a table of account balances, a ledger, and transactions are transfers of the bitcoin token to facilitate trustless finance between individuals. But as bitcoin began attracting greater attention from developers and technologists, novel p Continue reading >>
Eli5 - What's An 'uncle' In Ethereum Mining
Think about it in terms of a family tree. An uncle is very close to being your Dad, but you would be different had you been born from the genes of your uncle. In that case, then your Dad would be your Uncle. Your family tree is like the blockchain. You and your Dad are like "correct" blocks. Uncles are like blocks that were very close to being the "correct" next block in the blockchain, but are not because they were beat to the punch by your Dad. That is why they are uncles and not blocks and constitute a fork in the blockchain, and are thus not valid. Cousins are even more useless in this context. Although, I believe Ethash rewards uncles, correct? But not cousins? Continue reading >>
How Does Ethereum Work,anyway?
Odds are youve heard about the Ethereum blockchain, whether or not you know what it is. Its been in the news a lot lately, including the cover of some major magazines, but reading those articles can be like gibberish if you dont have a foundation for what exactly Ethereum is. So what is it? In essence, a public database that keeps a permanent record of digital transactions. Importantly, this database doesnt require any central authority to maintain and secure it. Instead it operates as a trustless transactional system a framework in which individuals can make peer-to-peer transactions without needing to trust a third party OR one another. Still confused? Thats where this post comes in. My aim is to explain how Ethereum functions at a technical level, without complex math or scary-looking formulas. Even if youre not a programmer, I hope youll walk away with at least better grasp of the tech. If some parts are too technical and difficult to grok, thats totally fine! Theres really no need to understand every little detail. I recommend just focusing on understanding things at a broad level. Many of the topics covered in this post are a breakdown of the concepts discussed in the yellow paper. Ive added my own explanations and diagrams to make understanding Ethereum easier. Those brave enough to take on the technical challenge can also read the Ethereum yellow paper. A blockchain is a cryptographically secure transactional singleton machine with shared-state.  Thats a mouthful, isnt it? Lets break it down. Cryptographically secure means that the creation of digital currency is secured by complex mathematical algorithms that are obscenely hard to break. Think of a firewall of sorts. They make it nearly impossible to cheat the system (e.g. create fake transactions, erase tr Continue reading >>
What Is Ethereum? | The Ultimate Beginners Guide
What is Ethereum? | The Ultimate Beginners Guide What is Ethereum? The Ultimate Beginners Guide With the second largest market cap in the cryptocurrency world, Ethereum has drawn a lot of attention from investors and crypto enthusiasts alike. This relatively new cryptocurrency not only presents a significant change to the status quo, it also allows for the quick development and deployment of new applications. Ethereum essentially enables dozens of new and extremely innovative cryptocurrencies to exist. While Ethereums utility is obvious to programmers and the tech world at large, many people who are less tech-savvy have trouble understanding it. Weve designed this guide to appeal to both crowds and expose anyone from complete crypto beginners and intermediates to this potentially game-changing cryptocurrency. If youre interested in Ethereum, chances are you have some sort of foundational knowledge of Bitcoin . All cryptocurrencies inevitably get compared to Bitcoin, and it frankly makes understanding them much easier. Bitcoin launched in 2009 as the worlds first cryptocurrency, with the single goal of creating a decentralized universal currency. This currency would not require any intermediary financial institutions, but would still ensure safe and valid transactions. This was made possible by a revolutionary technology called the blockchain. The blockchain is a digital ledger, continuously recording and verifying records. Its used to track and verify Bitcoin transactions. Since the global network of communicating nodes maintains the blockchain, its pretty much incorruptible. As new blocks are added to the network, they are constantly validated. Similar to Bitcoin, Ethereum is a distributed public blockchain network. While both Ethereum and Bitcoin are cryptocurrencies Continue reading >>
Proof Of Stake Faq Ethereum/wiki Wiki Github
See A Proof of Stake Design Philosophy for a more long-form argument. No need to consume large quantities of electricity in order to secure a blockchain (eg. it's estimated that both Bitcoin and Ethereum burn over $1 million worth of electricity and hardware costs per day as part of their consensus mechanism). Because of the lack of high electricity consumption, there is not as much need to issue as many new coins in order to motivate participants to keep participating in the network. It may theoretically even be possible to have negative net issuance, where a portion of transaction fees is "burned" and so the supply goes down over time. Proof of stake opens the door to a wider array of techniques that use game-theoretic mechanism design in order to better discourage centralized cartels from forming and, if they do form, from acting in ways that are harmful to the network (eg. like selfish mining in proof of work). Reduced centralization risks, as economies of scale are much less of an issue. $10 million of coins will get you exactly 10 times higher returns than $1 million of coins, without any additional disproportionate gains because at the higher level you can afford better mass-production equipment. Ability to use economic penalties to make various forms of 51% attacks vastly more expensive to carry out than proof of work - to paraphrase Vlad Zamfir, "it's as though your ASIC farm burned down if you participated in a 51% attack". How does proof of stake fit into traditional Byzantine fault tolerance research? There are several fundamental results from Byzantine fault tolerance research that apply to all consensus algorithms, including traditional consensus algorithms like PBFT but also any proof of stake algorithm and, with the appropriate mathematical modeling, pr Continue reading >>
Eli5: Benefit If Using My Gaming Gpu For Mining
ELI5: benefit if using my gaming gpu for mining Please review the Stickies pinned at the top. For BADGES please READ the FAQ for DETAILS. Follow @LTTCompute 30 Jan 2016 Please review the various posts pinned at the top of the forum section for lots of good information on basic installs, setup and questions. For BADGES please READ the FAQ for the DETAILS.Also, don't forget to follow @LTTCompute on twitter for random tweets, posts and updates... ya, random! NiceHash predicts you would make 151USD by mining equihash based coins (zcash...) a month: I have many hobbies, stacking bodies is my favorite. R7 1700X 3.9GHz | Asus X370 Pro | SeaSonic SS660 | 2x8GB Cosair RGB 3466 (3200MHz)| H115i AIO | Phanteks P400S | GTX 1080ti FE | Crucial MX300 I have many hobbies, stacking bodies is my favorite. Is it worth doing when Im not actively using it though? (school) That's up to you to decide. This is like asking, should i eat vanilla ice cream, or not? Is cryptocurrencysomething you believe in? R7 1700X 3.9GHz | Asus X370 Pro | SeaSonic SS660 | 2x8GB Cosair RGB 3466 (3200MHz)| H115i AIO | Phanteks P400S | GTX 1080ti FE | Crucial MX300 SimpleTechVids and Papa_Bear_Al reacted to this NiceHash predicts you would make 151USD by mining equihash based coins (zcash...) a month: I have a YouTube Channel - SimpleTechVids, Go check it out! (It may be crap but I barely started... CPU: Intel Core i7 8700k @ 4.20GHz , MOBO: Asus Strix Z370 E, RAM: G.SKILL Trident Z 2x8GBRGB, GPU: NVidia GTX 1080 8GB, CASE: Coolermaster MasterCase Lite 5, SSD: 500GB Samsung 960 EVO, HDD: Seagate Barracuda 1TB, PSU: EVGA SuperNova 750 G2, CPU COOLER: Corsair H115i Extreme, OS: Windows 10 Pro Continue reading >>
Amazon.com: Understanding Ethereum, Bitcoin &bitconnect: Cryptocurrency Technologies, Mining, Investing Ebook: Robert Warrentcy: Kindle Store
Amazon Giveaway allows you to run promotional giveaways in order to create buzz, reward your audience, and attract new followers and customers. Learn more about Amazon Giveaway This item: Understanding Ethereum, Bitcoin &Bitconnect: Cryptocurrency Technologies, Mining, Investing Customers who bought this item also bought This shopping feature will continue to load items. In order to navigate out of this carousel please use your heading shortcut key to navigate to the next or previous heading. Continue reading >>
How Do Ethereum Smart Contracts Work?
Like many ideas in the blockchain industry, a general confusion shrouds so called 'smart contracts'. A new technology made possible by public blockchains, smart contracts are difficult to understand because the term partly confuses the core interaction described. While a standard contractoutlines the terms of a relationship (usually one enforceable by law), a smart contract enforces a relationship with cryptographic code. Put differently, smart contracts are programs that execute exactly as they are set up to by their creators. First conceived in 1993, the idea was originally described by computer scientist and cryptographer Nick Szabo as a kind of digital vending machine. In his famous example , he described how users could input data or value, and receive a finite item from a machine, in this case a real-world snack or a soft drink. In a simple example, ethereum users can send 10 ether to a friend on a certain date using a smart contract (Seeour guide" What is Ether? "). In this case, the user would create a contract, and push the data to that contract so that it could execute the desired command. Ethereum is a platform thats built specifically for creating smart contracts. But these new tools arent intended to be used in isolation. It is believed that they can also form the building blocks for 'decentralized applications' (See: " What is a Dapp? ")and even whole decentralized autonomous companies (See:" What is a DAO? ') Its worth noting that bitcoin was the first to support basic smart contracts in the sense that the network can transfer value from one person to another. The network of nodes will only validate transactions if certain conditions are met. But, bitcoin is limited to the currency use case. By contrast, ethereum replaces bitcoin's more restrictive langu Continue reading >>
How Does Bitcoin Mining Work?
By Euny Hong | Updated October 17, 2017 — 3:51 PM EDT Cryptocurrency mining is painstaking, expensive, and only sporadically rewarding. Nonetheless, mining has a magnetic draw for many investors interested in cryptocurrency. This may be because entrepreneurial types see mining as pennies from heaven, like California gold prospectors in 1848. And if you are technologically inclined, why not do it? Well, before you invest the time and equipment, read this explainer to see whether mining is really for you. We will focus primarily on Bitcoin. (Related: How Bitcoin Works and our helpful infographic, What is Bitcoin? ) By mining, you can earn cryptocurrency without having to put down money for it. That said, you certainly don't have to be a miner to own crypto. You can also buy crypto using fiat currency (USD, EUR, JPY, etc); you can trade it on an exchange like Bitstamp using other crypto (example: Using Ethereum or NEO to buy Bitcoin); you even can earn it by playing video games or by publishing blogposts on platforms that pay its users in crypto. An example of the latter is Steemit , which is kind of like Medium except that users can reward bloggers by paying them in a proprietary cryptocurrency called Steem. Steem can then be traded elsewhere for Bitcoin. In addition to lining the pockets of miners, mining serves a second and vital purpose: It is the only way to release new cryptocurrency into circulation. In other words, miners are basically "minting" currency. For example, as of the time of writing this piece, there were about 16 million Bitcoin in circulation. Aside from the coins minted via the genesis block (the very first block created by Bitcoin founder Satoshi Nakamoto himself), every single one of those Bitcoin came into being because of min Continue reading >>
Eli5: I Get Bitcoin, But How Does Ethereum Work?
ELI5: I get Bitcoin, but how does Ethereum work? This is bitcointalk so chances are high you know what Bitcoin is. But what's the deal with this Ethereum thing people keep talking about? And how does it *actually* work? Well, that's what we discuss in this new post: The Ethereum works the way blockchain is intended to work which is to provide services. Like marriage contract in the blockchain or last will and testaments. It seeks to exploit the power of programming language to enforce the so-called smart contracts. No need for lawyers and pastors to administer marriages and last will and testaments. Which will definitely be advantageous and economical. Those are some easy to grasp aspects of Ethereum. Just do more research and you will get it immediately. The big difference with ethereum is that its nodes store the most recent state of each smart contract, in addition to all of the ether transactions. For each ethereum application, the network needs to keep track of the 'state', or the current information of all of these applications, including each user's balance, all the smart contract code and where it's all stored. Ethereum is planning to start proof of stake concept at the end of this year / early next year. None can forecast how it will influence the currency. There is a high probability that current Ethereum miners will not be ready to shut down their existing mining capacities. This will result in new fork, which we saw in bitcoin during this year. Quote from: malboroman on October 17, 2017, 08:39:24 AM Ethereum is planning to start proof of stake concept at the end of this year / early next year. None can forecast how it will influence the currency. There is a high probability that current Ethereum miners will not be ready to shut down their existing mining ca Continue reading >>
Cryptocurrency Reddit Eli5
Author: otasnbkdyorrycen Date: 30-Nov-2017 The original blockchain released by Satoshi Nakamoto in Jan 2009. Every single computer/node in the network stores and validates every transaction ever made. The entire history of the network is stored as the blockchain and kept by every full node. The redundancy means data is uncorruptable without a change being done to more than 51% of the network at around the same time. Bitcoin creates an ecosystem where financial transactions do not require trust in third parties like banks and governments. New coins are created by miners(computers/nodes) through hashing(solving math problems based on previous answers), which validates transations and secures the network. Bitcoin activated Segregated Witness(Seg Wit-which reduces transaction size ~60% and lowering cost by removing parts of the transaction signature) in August 2017. whitepaper subreddit website The first smart-contract blockchain created and release by Vitalik Buterin and 3 co-founders in July 2015.a smart contract is a set of conditions and consequences that are verifyable and enforceable by the Ethereum network(e.g. If node A sends 1 Ether, return 3 made-up-token to node A). The Ethereum token is meant to be used as 'gas', which serves as a fee for the Ethereum network and facilitates interactions with smart contracts. Among the big updates planned for the near future are Sharding(which lets a random portion of the network validate a random portion of the transactions, allowing the network to handle a much higher volume of traffic), Raiden(near zero fee instant transaction for payments), and switching the network from the current proof of work system(network secured by mining) to proof of stake(where token holders lockup their tokens for a fix amount of time for a chance Continue reading >>