Ethereum is a decentralised platform that runs smart contracts, which are applications that run according to their own programme, without any kind of downtime, censorship, fraud or interference by a third party. Based on a custom-built blockchain, this platform allows developers to create markets, store registries of debts or transfer funds as per instructions, with no requirement for a middleman.
Ethereum development has been planned in four stages, with new features being added at every stage – let’s find out more!
Conceived by Vitalik Buterin, this ambitious project was launched in July 2015. The project is an open source, public, blockchain-based distributed computing platform and operating system, featuring smart contract scripting functionality. Ethereum went live in July 2015 with 11.9 million ether (ETH) coins that were pre-mined for the crowdsale.
This ongoing project is planned to be completed in four stages, the second of which is currently in progress. The four stages are:
The main difference between the Proof of Work and the Proof of Stake methods is that the former uses powerful hardware to calculate block hashes and then validates blocks and transactions. Here, the computing power and time invested to get the right hash is important.
In Proof of Stake, mining is virtual, wherein validators send a special transaction into the blockchain to lock up their ether holdings for a certain period. This is just like a bank deposit, on which one earns interest. The validator gets awarded for legitimate transactions but loses the staked ether if illegitimate transactions are included. So, anyone who tries to cheat the network will lose their ether holdings.
Over time, the Ice Age stage is expected to raise the difficulty of mining and slow down the production of blocks, until the network becomes completely frozen and unusable.
Ethereum is undergoing constant development and will slowly advance to a model that will resolve the current problems faced by all blockchain networks. The issues to be resolved include privacy, consensus safety, smart contract safety and scalability.
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