Following the explosion in popularity of Bitcoin in previous years, numerous companies have latched on to the blockchain bandwagon. Providing a variety of new services and applications for the anonymous software, new organizations are poised to revolutionize the way people view blockchain and currency alike.
Despite the wide variety of programs and applications available in the ever-growing industry of cryptocurrency, Bitcoin continues to steal away the spotlight.
Many consumers may not even be aware of the multitude of options available when it comes to the applications of blockchain technology, as well as the expanding list of ways that this technology can be used to create entirely new monetary and economic concepts in the inclusive online community.
One newer blockchain network, Ethereum, is making waves within the cryptocurrency community. Its systems allow independent programmers to create their own applications, using them on an entirely decentralized and public blockchain network.
Like all blockchain applications, its main benefits include the increased privacy and individual power which can only really be achieved in a decentralized system of currency.
More importantly, however, this unique system allows the creation of a variety of sophisticated systems using blockchain technology capable of handling complex transactions and contracts while maintaining decentralized anonymity and freedom.
Additionally, Ethereum comes equipped with its own currency available for sale and trade.
Though perhaps not much compared to the whopping $1700 in value currently attributable to a single Bitcoin, Ethereum currently trades at a somewhat stable $87, making it a good bet for investors looking for the possibility of long-term gains with an explosion of the cryptocurrency.
Because of its place as a newer form of cryptocurrency, the tradable version of Ethereum has attracted a pretty significant amount of attention within the crypto-community.
Professionals and casual traders alike have flocked to Ether as a possible alternative to the normalized Bitcoin, viewing the unique prospect as a new form of decentralized currency to pour money into in the hopes of profit in a short time.
However, most experts agree that the main reason to be excited about Ethereum doesn’t even have anything to do with its currency and the stable price it provides. Instead, it appears as though the potential Ethereum’s platform—rather than its physical currency—prevails as the ultimate cause of the increased public interest in Ethereum.
In any case, the increased interest in Ethereum has caused quite a bit of change within the world of cryptocurrency. As this platform grows older, it continues to encounter some of the same ideological and practical problems faced by platforms using the irreversible and decentralized blockchain technology.
The growing pains of Ethereum don’t necessarily correlate to an entirely positive evolution. Misinformation, misunderstanding, and misapplication continue to present legitimate problems for the world of Ether.
As a result, there is a direct need that consumers become more informed on the unadulterated realities behind an increasingly popular option for those looking to make their fortune in cryptocurrency.
This guide has been created to address a variety of important considerations regarding Ethereum. Including information surrounding the currency, the platform, the pros, as well as the cons, this guide should be regarded as an introduction to the realities behind Ethereum.
Introduction To Blockchain
Naturally, consumers who are interested in using Ethereum for all it has to offer probably have some questions about the main feature of the rising currency. Simply put, the blockchain is a decentralized system where information can be stored.
In its earlier applications, Bitcoin was one of the only currencies in the world to use blockchain technology. Bitcoin changed the way people viewed cryptocurrency when they, for the first time, were able to use blockchain to keep information decentralized and anonymous.
In order to understand how Ethereum uses blockchain technology, it is important to first understand how blockchain works. This section will give readers a basic introduction into what makes blockchain so unique as a system and as a monetary arbitrator.
Most simply stated, the blockchain is a public arbitrator of transactions which cannot be altered and does not fall under the control of any one entity. The technology in its conception is somewhat complicated, but the features of the blockchain are generally easy for new users to understand.
Think of the blockchain as a long, long sequence of code and computers used to relay a transaction from point A to point B. Along the way, information is often available in parts of the transaction. When it comes to Bitcoin, for example, transaction logs are available to tell users what transactions are occurring all over the world in real-time.
While this information is usually very limited and provides for substantial anonymity, some users still crave an additional layer of identity protection and decentralization.
The blockchain stores “blocks” of identical information across several points all over its network. As a result, the information stored in the blockchain is generally considered unalterable.
There is one exception to the unaltered blockchain, and we’ll discuss that later. But for now, readers need to understand that the blockchain exists first and foremost to protect the anonymity of users and the decentralized, unalterable nature of an online currency.
The decentralized network provides several unique benefits to users. First, it protects against corruption and tampering. Because the information is incorruptible and stored across multiple networks, it is generally considered free from the possibility of tampering from an outside source.
While some argue that currencies in the real world like the United States currency can be tampered with, subject to changes of an underhanded nature, a cryptocurrency’s price, worth, and location is determined entirely by the market, by the users who create the system. The blockchain makes this possible.
Were it not for the incorruptible nature of the blockchain, the currency would be susceptible to the very same problems which plague modern currencies, online and in the real world. Tampering, editing, and theft can be avoided with a sophisticated blockchain system.
Additionally, the decentralized networks provided by the blockchain gives users a more secure network than the internet can typically provide.
One of the main reasons behind this major benefit is that, because the blockchain stores the information in several incorruptible ‘blocks’ of code and data, the information which holds currency information is largely out of the hands of would-be hackers.
When even the owner of a currency cannot reverse the transaction once it has taken place, it becomes very difficult for those without access to the original transaction to intercept the transport of a virtual currency.
Another major benefit of the blockchain is that applications experience zero downtime. Bitcoin, or other decentralized currencies, can never be switched off. No matter what the situation, consumers can never expect blockchain applications to go down. This means that their worth and value is not dependent on the reliability of their network.
Subsequently, consumers can rest assured that there is no opportunity for clandestine manipulation of the currency based off of hacking attacks which cause it to “go down.”
In summation, consumers need to understand that the blockchain is a very versatile network which provides for the decentralization essential to the backbone of several key cryptocurrencies. Understanding the blockchain and how it works is essential to understand how cryptocurrencies operate in the scope of the online market.
Ethereum Changes The Blockchain
One of the main reasons so many programmers and developers continue to flock towards Ethereum is that the currency represents a revolution in the way that people view the blockchain.
As the above section accounts for, block technology is an easy way to achieve a variety of consumer goals. Particularly when it comes to the prospect of anonymity in transactions, the use of blockchain technology is an essential component to many of the major cryptocurrencies we enjoy today.
Ethereum allows programmers to run their own programs and software on the Ethereum network. More importantly, it allows programmers to convert other programs in separate programming languages into usable, blockchain-enabled programs.
As a result, the entire process of creating a blockchain program has been overhauled, made ten times easier by Ethereum. This innovation lends several real-world industries a potentially revolutionary opportunity.
In the following section, this guide will detail how exactly Ethereum has worked to innovate the process of blockchain-program creation, and how this new opportunity could be applied in a variety of real-world businesses and industries.
Ethereum Virtual Machine
The Ethereum Virtual Machine has been called the greatest innovation of Ethereum. This program is the one that makes it all happen. This Turing-complete software operates entirely on the Ethereum network. It allows any programmer to run any program, regardless of the language it was written in, on the Ethereum network.
This means that virtually any program, if given enough time and memory, can be changed into a decentralized program with all the security benefits of a program with blockchain technology.
This isn’t to say that, before Ethereum, the creation of blockchain-enabled programs was entirely impossible. Before the days of Ether and the Ethereum network, programmers had to go through the painstaking process of creating their own, entirely original blockchain before they could run a program on it.
This means that the creation of a currency would be an extensive project, taking months to years to even make substantive progress.
With Ethereum, this process is streamlined. Instead of creating a new blockchain, those looking to run their new program can simply plug it into the Ethereum Virtual Machine and convert their work into a usable entity on the Ethereum network.
Applications Of Ethereum
First, Ethereum’s primary purpose and application has always been the creation of decentralized applications. Because programs can easily be created which use the blockchain technologies, Ethereum’s Virtual Machine allows programmers to create a variety of programs that have no leader.
Because the information in these programs will be stored in several different, decentralized places, the security of the blockchain becomes even more pronounced, even on programs and organizations with a low budget seeking anonymity.
One of the intuitive applications of Ethereum is the creation of Decentralized Autonomous Organizations. DAOs are coalitions of like-minded individuals which operate outside of the desires or actions of any one leader. These organizations are particularly important in industries that demand privacy and equality in structure.
Unlike the traditional model of an organization with monetary backing, a DAO has no leader; all of the members who own ‘tokens’ in the organization are entitled to voting rights in the happenings of the organization of which they are a part.
Current apps being developed on Ethereum give consumers and researchers a good way to predict the kinds of applications that the Ethereum network provides for.
For example, Weifund is an open crowdfunding platform which converts campaign contributions from users into contractually-backed assets that can be traded within the Ethereum network.
Additionally, programs like Uport are made to store personal information outside of the control of a centralized government.
Using blockchain technology, the creators of this program allow citizens to privately store their information on an entirely decentralized network which cannot fall into the hands of a government or agency which they may not trust.
The Ethereum Hard Fork
As mentioned in the introductory section, Ethereum has experienced a problem that many other contemporary cryptocurrencies have also had to face. After a fierce argument online, members of the Ethereum community executed what the industry calls a “hard fork.”
A hard fork changes the core code in Ethereum, usually to return funds to someone after something bad has happened.
In this particular case, an unknown hacker took advantage of an exploit to hack into, and steal from, a popular Decentralized Autonomous Organization on the Ethereum network. In the end, the equivalent of $50 million USD was taken, lost to an anonymous thief.
The community debated for quite some time, but they eventually decided that the best course of action was to execute a hard fork and edit the code of Ethereum to return the money to the organization.
This was, and still is, a very controversial choice. The precedent of irreversibility is more important to some users than the money that was stolen—and for good reason! Many users feel that a decentralized currency should be truly unchanging.
These users feel that the precedent of never reversing a transaction is what gives a decentralized system its strength.
Because of the major division within the Ethereum community, Ethereum split into two separate entities. Ethereum Classic is identical to regular Ethereum up into the block of information where the hard fork happened. After that, the two blockchains act as separate entities.
For the average user, this split means very little. However, it is important that consumers understand that the hard fork acts as evidence that, though the irreversibility and decentralization of a blockchain is one of its main selling points, it is not infallible—resets do happen.
How To Get Ethereum
Simple Way To Buy It
If you are looking to simply purchase the currency as if it was a stock then there are many options out there for such an investment. Ethereum is the system of currency, but the actual product is called Ether. It is similar to the way we refer to money as the abstract concept, but a dollar is a quantifiable amount of said money.
Ether is the term for a unit of currency that is involved in the Ethereum system of transactions. You can purchase this currency and hope that the price of it goes up so you can make a return on your investment. This way of acquiring Ether is sort of like investing in a precious metal such as gold or silver.
You aren’t actively making and working for this Ethereum, but it is more like an investment. There is a certain exhilarating feeling associated with purchasing a cryptocurrency such as ethereum. It is quite entertaining to know that you have a share in this very niche currency.
Although you are not doing much more than making an investment in Ethereum when you get it this way, it is nonetheless a very intriguing and popular use of the currency.
Investing in Ethereum is a legitimate way to try to get in on this very new and rising cryptocurrency. Everybody has heard of Bitcoin as a cryptocurrency, and many people have had their interest sparked towards these exotic forms of money.
People have been drawn into Ethereum because it provides a certain level of appeal to be on the ground floor or among the first individuals to interact with something that has the potential to be a huge success. It also operates on a very secure system.
They have many people all around the world keep a copy of their Ethereum jobs as well as when one was completed. This process is known as Mining Ethereum, and it is the next way that one can contribute to Ethereum as well as make some Ether simply by allowing your computer to store this ledger of sorts.
Mine For It
Mining is somewhat of an abstract term. What you are actually doing is allowing your computer to become a link in the large chain of Ethereum users and you will allow your computer to receive updates whenever someone near you completes a job and needs to be distributed a certain amount of Ether. You act as a waypoint for this block chain.
It is similar to a bucket brigade. Information comes from one of the main Ethereum operating points out to these miners. Ethereum is like a giant ledger and if you lend your computer to be a miner than you will be sending messages to this ledger whenever Ether needs to be distributed.
It is much easier and more efficient to run a cryptocurrency in this manner instead of having one single computer that could get hacked and have all the data lost. This way of distributing all of the information to miners all across the world has many benefits, and it also has benefits for those who allow their computer to mine for ethereum.
Roughly every 12 seconds one block is added to the blockchain. This means that every 12 seconds somebody is signing their computer to mine ethereum. When a computer does this they sign themselves up to keep and maintain that ledger of Ether distribution.
If one of the main computers were to be hacked or were to fail then the miners would all keep the leger so there would never be much danger to the information. You will be awarded 5 Ether for allowing your computer to do this, but you will also be distributed Ether periodically while your computer is mining.
The amount of Ether varies based on your computer’s processing power. A much better and faster computer will be given Ether far faster than a slow computer, but you will be given Ether nonetheless.
Performing Tasks For It
The reason Ethereum was created was so it could be a currency to facilitate the exchange of goods and services. People who need a job done can put out contracts for people to perform as well as set a level that the worker needs to be paid for doing a task.
It is very much like working at a traditional facility, except online and using a cutting edge form of currency.
For example, say that you own a small company and need a bit of coding done for your software. You put out 5 contracts that have a timeframe as well as a payment of 5 Ether upon completion. This info goes out to all of the blocks around the world, and whoever completes one of the contracts will send it off to one of their local blocks.
Let’s say that one of these coders lives in Brazil. He does the coding and alerts his local block. The Ether is then transferred to his account. This same process occurs for coders in Russia, Australia, France, Mexico, and anywhere else you could possibly imagine.
Once a contract is fulfilled, a message is sent to blocks all around the world and they will know that there are only 4 contracts left to fill. Then 3, then 2, then 1, and then all of the contracts have been completed for that particular job. All of the workers will be paid, and the small business owner is happy that his coding was completed.
This method of distributing work that you need done all around the world has many advantages. You are not limited by geographical factors. Someone could live on the other side of the world and still be able to get this coding job done.
There are many other jobs that exist. A podcast may need an audio engineer to make his podcast sound the best that it possibly can.
How To Use It
No matter which of the above methods to acquire Ether you choose, you are most definitely going to need to get a method by which to exchange, store, and trade Ether. The program known as “Coinbook” does just this. It is an online wallet of sorts. It was designed by a design company known as Engine Collaborative.
They specialize in online design, and saw that there were relatively few products out there for people to manage and view their cryptocurrency.
They took this opportunity upon themselves to develop a marvelous product that simplifies the transaction process and makes it easier for individuals to be drawn to this cryptocurrency because there is no need for an intricate understanding of computer programming or coding.
What Is Its Purpose?
Having reviewed just about everything involved with cryptocurrency, you might be asking yourself “Why is all of this necessary?” or, “What purpose does this serve?”. Well, cryptocurrency has vast and widespread impacts on the way that the world works.
The economics and market variations of cryptocurrencies such as ethereum have changed and evolved vastly over the last decade.
A lot of the utility can be found in the anonymity and disconnect between someone looking to hire people for a specific job as well as those looking to accomplish a job. With a blockchain system such as Ethereum, someone looking to get a job done can simply put out his task with the price he is willing to pay and then wait for people to take up the offer.
He doesn’t have to hardly interact with the people doing the work because it is all managed by a code that tells when to distribute Ether. It is only once the task is done that the individual will be paid.
He doesn’t have to worry about the employer holding up his end of the deal in terms of the payment because the Ether has already left the employer’s account and is just waiting to be distributed to whoever should accomplish the job for him.
The evasiveness and anonymity of Ethereum also lends itself to use by those seeking to have a job accomplished whose legality may be in question. People willing to “do the dirty work” have found employment under many forms of cryptocurrency.
Although they are in the minority of people using the currency, they have become associated with cryptocurrency in general.
When one hears the name Bitcoin they may soon think of drug dealing operations or people seeking to buy illegal materials online; however, many cryptocurrency transactions are just people simply using a form of currency to facilitate the exchange of goods and services in a more anonymous way than traditional currency.
Another beneficial aspect of Ethereum is its inclusiveness and worldwide usefulness. Ethereum is a worldwide currency that is static all around the world. Although the value of Ether is subject to change, it is the same value no matter where in the world you happen to reside.
Local currency has very little, if anything, to do with a cryptocurrency such as Ethereum. It offers a sense of unity to the people of Earth. It is a step towards a global currency and for the broadening of international markets.
People all around the world are flocking to Ethereum because it offers them a connection to the international community that was unmatched. People all around the world are looking at potential contracts to take up for the same result, a bit of Ether. This connects humans in ways that are still unknown.
The purpose of Ethereum is hard to determine because it has so many reasons for being used. Simply put, it exchanges goods and services for a monetary item with which you could purchase goods and services, but there is something special about Ethereum and cryptocurrencies in general.
They are safer than traditional cash. You can’t get “robbed” or lose your money on accident because a record of every transaction is kept on computers all around the world. The purpose may be different for every single person that uses it, but one thing is known.
The benefits as well as the possible detriments of Ethereum or cryptocurrencies in general will make themselves evident over the next few years, and they will forever influence the way that currency is handled across the world.
Ethereum Smart Contracts: How They Work and Top Use Cases Guide
Best Scenarios for the Use of Ethereum Smart Contracts
While Ethereum is best known for being bitcoin’s major competitor, it is also known and highly favored for its smart contracts. Unfortunately, newbies or beginner crypto traders and investors don’t understand it.
This is not surprising seeing as the concept of Ethereum smart contracts appears confusing. To help make this easier to understand, here are some simple scenarios that also double as best use cases.
Smart Contracts in Financial Institutions and Payments
The financial sector seems to be the most enthusiastic about Ethereum smart contracts. And that makes sense because it can be very effective. For example, let’s say a bank gives out a loan and the terms of repayment requires a monthly payment schedule.
Ethereum Smart contracts can be drawn up so that once the person defaults, they automatically get a notice without anyone monitoring the system.
The notice can last for say, one week, after which, their accounts are automatically debited the amount due, or their friends and colleagues automatically get a notice of their payment default.
Another example can be insurance. Instead of having to file for and wait for the payout of compensation claims, a smart contract can be created so that once claimants enter a specific set of answers, the insurance company will immediately place their requests on the front burner, assign an adjuster immediately and payout the claims within 24 hours.
It can also be designed so that users automatically get their payment within 24-48 hours of filing compensation claims.
A third scenario would be one in which holders of mature bonds are immediately compensated without the need to file their claims. Once their bonds mature, the government automatically pays them their due.
This will not only result in accelerated processes, it’ll drastically reduce unnecessary overhead costs, eliminate so much redundancy in the system, and significantly increase workplace efficiency. Disputes about payouts too will be become virtually nonexistent, owing to the transparency of the process.
Use of Smart Contracts in Enforcing Copyrights
Plagiarism and content piracy is a huge global problems. Authors and publishing houses are losing millions of dollars daily because they are fighting too many piracy issues on so many fronts. A simple solution to this can be a smart contracts of sorts.
For example, authors can set up a smart contract that’s binding to their readers. This contract can restrict the copying of their books or transferring them from one person to another. In the event of a breach, the smart contract is immediately triggered, resulting in them being billed for another copy.
Another example would be its use in the music industry. Currently, tracking ownership rights and royalties is a cumbersome process that involves a lot of trusting.
With smart contracts implemented, ownership rights can be automatically tracked across board, and royalties in the right amounts disbursed automatically to the appropriate recipients.
This will eliminate the need for trust seeing as the transactions will be transparent and open for all parties to see.
A third example can be the automatic payment of content creators at specific dates once the minimum criteria is met. And once payments are made, the details can be made available for proper accounting.
Smart Contracts for Clinical Trials
Clinical trials are often shrouded in secrecy or discretion… for good reasons obviously. But, this same secrecy can alter the results of a clinical trial in the event of tampering. This is where smart contracts will play a significant role.
Smart contracts can be set up to improve the transparency of data management, thus eliminating the possible manipulation of data in favor or certain individuals or entities.
This way, smart contracts can help reinforce the standards of credibility required during clinical trials, and will ensure that participants, the public and those running the trials produce only valid, untainted outcomes.
Smart Contracts in Prediction Markets
Another niche where smart contracts can play a significant role in futures and prediction markets.
Smart contracts can be created so that investors can get a certain reward for predicting certain events and outcomes accurately. A good example of this is predicting if and when space exploration will become viable.
Speculators can more specifically chose events like when Virgin Atlantic will carry out its first successful space travel to Mars.
A second example can be predicting when the price of crude oil will hit $150 per barrel. When it does, the smart contract is triggered, while payments and compensation are immediately processed and paid.
Smart Contracts in the Internet of Things (IoT)
With the world actively moving towards AI and the integration/connectivity of all things, the Internet of Things is fast becoming a reality. Smart contracts can help accelerate the popularity of the IoT, resulting in an even more seamless solution.
For example, sensors powered by smart contracts can detect when you’re low on milk. Once it does, it will automatically send a notice to your home assistant, which then buys it on Amazon. Once Amazon gets the notice, it airdrops it to your home through its delivery drone.
Once it’s delivered, the house manager gets a text that there’s a delivery for the milk. He/she will then take it and store it in the fridge. Mind you, all these happened without you even lifting a finger. The smart contracts took care of everything.
Ethereum Smart Contracts Conclusion
There’s really no limit to what can be done with smart contracts. Their versatility, coupled with their encrypted and decentralized tech, makes them the perfect tool for the advancement of modern day and future technologies.
If you haven’t implemented smart contracts, now might be the right time to start thinking of and implementing it in your business. You just need to figure out how to use it in your business.
9 Best Ethereum dApps: Top ETH Blockchain Decentralized Applications?
Ethereum (ETH) is the leader in smart contracts and DApps (Decentralized Applications). Today, it is home to more than 90% of the world's DApps and smart contracts. A figure that will surely continue to grow.
DApps are decentralized applications where no entity has the power to control that application because it is deployed in a distributed general ledger, i.e. in Ethereum's blockchain.
Many DApps will be successful and have widespread use cases, so the idea of introducing you to some of the DApps that are succeeding today seems like a good idea. If you want to learn more about Dapps, here's a detailed guide to: What are decentralized applications (DApps)?
9 Best DApps On The Ethereum Platform
Ethlance is like Upwork, that is, a job market. However, unlike Upwork, Ethlance is a decentralized marketplace for job advertisements and hiring freelancers housed in Ethereum's blockchain.
What makes it more interesting and transparent is that it does not charge a registration fees or contract work commission as it is fully decentralized. The platform can operate sustainable with a 0% service rate, as is clear from the fact that the number of transactions between self-employed and employers is never reduced.
The CryptoKitties application, a blockchain-powered game, is also hosted on the Ethereum network.
CryptoKitties is a new game or application that gives its users access to digital cats that they can buy, sell or breed. As such, these kittens are actually crypto collectible.
Like every BTC or ETH, every cryptokitty is also unique.
For example, in December, the biggest sales were valued between 200 and 253 ETH. Collectors were very excited about the platform, but at the moment, the volume got reduced more than 97%.
Aragon is a very interesting and special project about the Ethereum blockchain. It consists of a platform or DApp to build and manage decentralized autonomous organizations popularly known as DAOs.
The concept of DAO can be applied to any organization, company, non-profit organization or foundation, to provide an additional level of transparency and more effective governance of these entities. It also helps to curb unnecessary middlemen who can be replaced by governable ethereum smart contracts..
The Aragon platform is powered by its native ANT token that can be buyed at Bittrex if you wish to participate in the future of the project.
uPort is an identity management platform. This is a project supported by ConsenSys that aims to streamline digital identity in order to stop identity and data theft.
This Dapp considers your mobile as an extension of your own being and when you first set up your uPort, it obtains data from your mobile with your permission and writes to the Ethereum smart contract which can then be shared by users as and when necessary.
You do not currently have a native token but it may be a possibility in the near future.
Gnosis DApp is in its beta phase but can be used for predictions. It is a platform hosted on the Ethereum network and is designed to function as a predictive marketplace.
For example, let's say you want to know the market prediction of a football match or an exclusive international auction. So Gnosis can help you find the answers to difficult questions, as well as discover the prices.
It has its native GNO token that allows you to vote and is available in Bittrex.
Prism is a decentralized and unreliable ShapeShift asset wallet market hosted on Ethereum's blockchain.
Through Prism, every single individual can invest ETH in different cryptocurrencies and specify its share percentage.
As it is based on smart contracts it is not necessary to manage passwords or seeds of several exchanges or wallets to manage your own crypto wallets.
It also displays your investment wallet in a large user interface and automatically tracks it in real time. The Prism DApp is currently in beta phase.
Radex is a decentralized zero pay exchange for Ethereum tokens (ERC20) and an exchange for the ERC223 token standard.
Also is the first power plant to adopt the Saturn protocol, a decentralized DAO (decentralized autonomous organization) power plant for all EVM blockchains.
IDEX is another decentralized exchange within the Ethereum network. Here you can buy, sell and store Ether and ERC20 tokens at IDEX.
You can also use IDEX with MetaMask or Ledger Nano S as wallets to further enhance your security while using this exchange.
It is important to remember that while registering with IDEX, don't forget to keep your final phrase/password/private keys safe because that is the only thing that will help you restore your funds.
Golem, so to speak, is the airbag of computers. Through the Golem platform, you can harness the computing power of other computers that are far away from you and even lend your computing power to someone who needs it.
You can think of it as a decentralized supercomputer or a marketplace where you can buy or sell the extra computing power you have.
Golem supercomputers will run when the user pays in native GNT tokens. These tokens will be given to people who have rented their additional computing power on the Golem network.
The project is in beta and LIVE on Ethereum's mainnet, so if you want to buy something from GNT you can do it at Bittrex.
The company is located in Poland but it has experts from all over the world and a big support from different cryptocurrency figures.
9 Best Ethereum dApps Conclusions
An unprecedented increase in the development, operation and maturity of DApps is expected by 2018. And with ETH scaling solutions like Sharding, Ethereum is expected to lead this revolution. It will also be important to evaluate how the network will react to different challenges such as the growth of new platforms like EOS, Tron or NEO.
Ethereum Virtual Machine (EVM): Top 9 Things You Should Know About
Most crypto traders, investors and enthusiasts are familiar with ether and ethereum. And for many, simply trading them for profits is sufficient particularly when their value was pretty high.
But, with the current bearish market and rapidly falling price of ethereum, many are bailing and selling off their ethers. This might be a bad decision seeing as ethereum is likely to rebound in value.
This is why understanding the technology behind any cryptocurrency is important. This way, you know that even if there’s a massive dip in price, you can still HODL for as long as necessary.
A key part of ethereum is a tech called Ethereum Virtual Machine (EVM). This is the algorithm that powers and runs the ethereum platform. It is often called the operating system of the technology and is responsible for running the thousands of computing equipment spread across the world.
Considered the Heart of Ethereum
The Ethereum Virtual Machine is considered the nerve center of the platform. It is the program that connects all the computers or nodes across the world and acts as the engine the drives the platform.
Through its unique algorithm, it helps maintain the decentralized network, ensuring that the network is self-regulatory. Its distinct performance ensures consistent uptime, fast transactions and excellent user friendliness.
Helps Users Run Scripts
With the rising popularity of blockchain comes the growing importance of blockchain based apps. Developing these apps from scratch implies learning how to code on the blockchain as well as learning other programming languages.
This is incredibly hard and slow in this era of speed. Thanks to EVM, that’s no longer necessary as it essentially eliminates the need for blockchain app development from scratch.
The scripts available for use on the platform serve as a foundation of sorts, thus enabling developers build apps fast based on their specifications. This means saved time in learning curves and the ability to roll out new decentralized apps faster than ever.
Executes Smart Contracts
Smart contracts are considered the future of agreements and contract in the future. With these in place, contracts become automated, fast and super effective. For instance, landlords need not physically remind tenants of rent.
Smart contracts can be set up to set reminders a week before tenant rent is due. If the tenant defaults, the smart contract can kick in by simply locking the tenant out of the house –through the resetting of passcodes maybe or notifying the nearest locksmith to change the locks.
EVM is responsible for the running and maintenance of these smart contracts. It is the bedrock on which smart contracts were/are built.
While smart contracts are currently in their infancy and are able to deploy 2-5 actions at once, we know that as EVM becomes more sophisticated, they can be used for more complex agreements involving many actions at once.
Provides Security for the Ethereum Platform
As with all cryptocurrencies, hackers often attempt to hack the platforms and steal cryptocurrencies. While they have been able to do that with a few other cryptos, they haven’t been able to do that with the ethereum platform.
Why? Because of Ethereum Virtual Machine. This does an excellent job of securing the platform so that it’s immune to Distributed Denial of Service (DDoS) attacks.
It secures the firewalls, eliminates bugs and reinforces security measures, thus ensuring that the platform, its tokens and transactions on the network stay safe and encrypted.
EVM May Become Very Simple to Use
While EVM is quite complex to deploy and code now, no thanks the stack-based bytecode, developers are able to make it readable through the ability to write smart contracts in Serpent and Solidity.
These codes makes it easier and simpler for people to use and understand. Future uses imply that it might be even easier as it gains worldwide acceptance and the codes becomes easier to learn and master.
Might Play a Role in Revolutionizing Major Sectors
Ethereum is seen as a considerable force that’s capable of disrupting many sectors. But, what many people don’t know is how ethereum can do this. Well, it’s through EVM.
As a revolutionary technology, this is what will serve as the bedrock that will most likely cause significant disruptions in major traditional industries like finance and healthcare.
Since it runs the ethereum platform, it will transform these sectors once it attains its full potential.
Isolated from the Ethereum Network
In the same manner as a virtual machine on your PC, it is sandboxed and isolated from the network, whilst still being a part of it. This isolation is what makes it impervious to hack attacks and corruption, essentially fortifying it.
Prevents Double Spending
EVM runs the smart contracts and algorithm that prevents users from double spending –a process where people use the same money to buy multiple items. So, once transactions are made, the copies of the transactions are spread across and registered on thousands of nodes across the network, thus ensuring that double spending is essentially nonexistent.
Ethereum Virtual Machine is amazing and has incredible potential. If the developers and programmers continue working on it, we should soon see a new platform that’ll transform the world as we know it if it gains worldwide acceptance.
So, if you had second thoughts about ethereum, now you know it is an amazing cryptocurrency and has more use case than bitcoin.
Ethereum Lending Guide – Everything You Need to Know About Ethereum (ETH) Cryptocurrency Lending
Decentralized Finance (DeFi) seems to be all the rage these days. This is largely because of its huge potential to revolutionize traditional finance. Of course crypto and blockchain are already doing that. But, DeFi is an improvement on the current status quo, with the possibility of yielding excellent results for users.
The revolution called cryptocurrency is a byproduct of Satoshi Nakamoto’s Bitcoin Protocol whitepaper. This is essentially what birthed the idea that the world can have an alternative currency that’s just as useful and widely accepted as fiat.
The paper which was focused on the distributed ledger showed that it was possible for all transactions executed on the platform to be transparent, listed and easy to use. Also, it should have assets that can be easily shared, with the outcomes being trustworthy.
The ultimate idea of the document is that if assets become programmable, then a totally new financial system can be developed, that will redefine people’s perception about currency and how it’s used.
The good news is that the crypto industry looks like it’s done this properly to some extent. Now, there’s the need to move to the next stage of the project, which includes stable currencies, lending and borrowing mechanisms.
The final goal being a technology and infrastructure that could potentially upend the current order of things.
This new stage is what’s called Decentralized Finance (DeFi). This is meant to not only provide a means of lending, it will also have solid infrastructure to help move that money around. So, we’re looking at exchanges that allow participants to invest, trade and use the currency for just about anything traditional currencies are used for.
How is decentralized finance possible? It’s all thanks to key properties such as
- The emergence of stablecoins
- Dapps and smart contracts
- Possibility of using cryptoassets as collateral
Let’s examine each of these key components:
The Emergence of Stablecoins
These have becoming popular in the industry because their prices don’t swing wildly like the other cryptos. Lending often requires the use of a currency that’s both stable and decently valued.
Most cryptos cannot serve as good lending tools because their prices fluctuate wildly.
The reality is no one wants to borrow $50 today and pay back the same as $100, just because there was a sudden upswing in the price of the cryptos. Stablecoins are the preferred lenders’ choice because of their constant value.
The value of most stablecoins is often tied to fiat currencies or real world assets. These help peg the value and prevents the possibility of severe price fluctuations. There are four major types of stablecoins:
These are stablecoins whose prices and value are tied to globally recognized currencies like the USD and GBP. The most popular of these is known as Tether (USDT). Launched in 2014, this token has a market cap of $2 billion, with 1 USDT equal to $1.
So, for every Tether token available, there’s $1 kept in storage for it. This means that if you want to trade 5 USDT today, it’ll be valued at $5.
Because this works, we’ve seen a growing trend of currency-backed stablecoins. The more popular ones apart from Tether include TrueUSD, Gemini Dollar, Paxos Standard and USD Coin. All of them borrowed from the Tether model of $1:1 USDT.
While this is great, there’s the problem of getting the users to trust that these claims are actually true. They must believe that the market cap of their preferred stablecoin be actually true, and that for every token they own or lend, there’s an equivalent in cash somewhere in the vaults of a bank.
If this is untrue, or the value of their reserves drops below that of the token’s total supply, it’s possible that the project could become crippled. This is why there’s a bit of controversy surrounding Tether.
There have been questions about the veracity of its reserve claims. After a bit of pressure, the company actually came out to say that their tokens are not completely backed by dollars.
This is why every potential investor or lender must do their research when investing in stablecoins. Make sure that the company’s claims about their reserves are actually true.
Crypto’s major selling point is its trustlessness. You don’t have to trust that the company’s claims are true or anything like that. This is where decentralized stablecoins can be useful. They’ll simply run based on programmed rules and instructions.
These are effectively powered by smart contracts designed to ensure that the currency value stays constant. They run independent of custodians, centralized servers, banks, financial entities or any other centralized institution. You only need to “trust” the codes to execute when they should.
This focus on trustlessness birthed the ethereum-based DAI stablecoin. Released in December 2017, the stable coin has weathered tough market conditions and has stayed fairly constant, with an exchange rate of 1 DAI to 1 USD.
It works because there’s an intricate system involving the use of lending facilities and collateral.
Dapps and Smart Contracts
The world’s biggest smart contracts platform is Ethereum. In fact, it was primarily built for this purpose. With smart contracts, crypto assets and transactions can be easily executed.
Smart contracts typically execute transactions and carry out pre-programmed orders when certain conditions are met. Unlike some other software though, these cannot be altered once deployed. This makes smart contracts a key component for successful ethereum lending.
It’s able to do this through the power of blockchain. Developers would have to set it up to activate automatically, without revisiting the code.
Possibility of Using Crypto Assets as Collateral
Collaterals are a crucial part of the lending process. It is a key component that assures the lender that you’ll actually pay back your debt.
If you don’t pay back the loan, you’ll end up forfeiting that collateral to the lender. Ethereum lending requires this as a means of keeping people honest and getting them to repay loans.
Unlike the traditional financial institutions where loans are largely dependent on your reputation –aka credit score- there’s nothing about tracking the borrower’s reputation on the ethereum platform.
This means that unscrupulous elements can actually make away with loans taken from ethereum lenders. The crypto collateral as an asset means everyone who takes a loan has to pay it back before they get their cryptos back.
Collateralized Debt Positions (CDPs)
This usually works when you’re looking to take a DAI debt. All you have to do is give up some Ether. To do this, you would have to lock in your Ether, offering it as collateral in order to get some DAI.
How much Ether do you need to lock it up? Well, the current terms are 150 percent of the DAI loan you want. So, for 1 DAI, you’ll need 1.5 ETH. Once you repay the debt, your Ether will be released back to you, minus a small fee.
If you’re worried about price drops, don’t worry. Whatever amount of ETH that you have locked up will be liquidated at that price. So, you never have to worry about having to pay extra. Price drops are a real problem with Collateralized Debt Positions as it can mean that the value of the DAI can become larger than that of the Ether it was hedged against.
Thus, resulting in significant loss in price stability. Of course, the system’s transparency helps ensure that there’s no hanky-panky.
MKR Token Holders
This is a governance token that helps with keeping the entire process transparent and accountable. Holder of the MKR token have the power to keep the price of DAI stable, and make decisions about the platform.
People who have these tokens essentially become the governing council. They decide the penalties, changes, and fees carried out on the platform. This wasn’t the case initially. In the beginning, the smart contracts used by the platform were developed by the MakerDAO team.
However, after the contracts were fully deployed by the system, they essentially ceded control to the token holders who act as a decentralized government of sorts. These are the people who decide on a course of action on the platform. Of course, the MakerDAO team isn’t completely hands off. They still play a crucial role in decision making.
Their modus operandi typically goes thus: they propose an idea or concept to the token holders, outline why they think it’s a good one, and ask the token holders to vote in favor.
Of course, the token holders will then decide on whether they want to vote for or against the idea. For instance, before the platform increased its fee for opening CDPs (stability fee), the MakerDAO team argued that increasing the CDP fee would help the token become more stable at $1.00 instead of the fluctuations it was going through at the time.
MKR has become integral to the success of the platform because the token is used for paying fees. Every time the CDP is paid off, the token attached to the transaction ether gets destroyed or burned. Naturally, this ensures that there’s scarcity, which in turn, drives up its demand and price.
Of course, this also means that whenever bad decisions are taken, the price of MKR will decrease, largely because new tokens will be created, creating increased supply. The point is the token holders are therefore, compelled to make better decisions that will favor them and keep the value of the token stable.
This is why decentralized mechanisms work so well. They use a combination of mechanisms and incentives to keep the ecosystems and platforms thriving.
How About Lending in Slow Markets?
Slow markets also known as bearish markets are a big issue. But as with all business cycles, it’ll always be followed by the bullish market. However, because the bearish market is often feared by investors and lenders, lending and borrowing are often a highly risky venture.
So, how can you tell when a market is truly bearish? Well, in conventional finance, it’s when the value of securities and assets drop by as much as 20 percent from their highest recent value, and investors become pessimistic about the market situation.
The crypto market is currently going through a severely prolonged bearish period. In fact, it is referred to as the crypto winter, owing to the prolonged drop in value of most tokens by as much as 90 percent from their all-time high prices.
As a result, many token holders are unwilling to sell their tokens for fear of losing so much money. Instead, they’re opting to use those tokens as collaterals for their loans. At the end of the day, using the tokens as collaterals for loans is basically the best option for all token holders.
The only risk associated with this move is that of the price bottoming out further. However, given the current state of the market, chances are that this won’t be happening in the near future. So, this makes lending the better option.
Ethereum Lending Platforms
If you’re looking for ethereum lending platforms, this portion of the guide is meant to provide you with everything you need. Before we jump in though, it is important to state that some ethereum lending platforms are centrally managed.
This mean they function in a manner similar to banks and other traditional lending institutions. They usually have stricter requirements and regulations compared to other decentralized ethereum lending platforms.
For these entities, they’ll take your tokens as collateral while lending you cash. However, unlike other platforms that only take ethereum tokens, they also take Litecoin and bitcoin. So, these aren’t strictly ethereum lending platforms. They’re more like crypto lenders.
Of course, this comes with its drawbacks in the sense that their platform isn’t solely blockchain-based. This can be a problem if you’re particular about only getting a loan from decentralized lending platforms.
With that out of the way, let’s focus on the decentralized ethereum lending platforms.
This ether lending platform has its own token. You can use the SALT token to lower your monthly payments and interest rates. They offer a minimum of $5,000 loans, with an APR of 5.99 percent.
They require some collateral and repayment is at your convenience. More collateral and longer term loans typically attracts lower APR. While it’s a blockchain based platform, it’s also seen as very similar to traditional lenders because of their ability to offer fiat loans.
Naturally, the company tries to comply with relevant regulations. This is also why their services are only limited to certain states and areas. They also offer a loan-to-value max of 70 percent. This means they can only offer you loans that are equivalent to 70 percent of your collateral. So, if you offer $10,000 worth of ether token as collateral, they’ll only be able to give you $7,000 in loans.
This platform offers its loans in USD, and hopes to be the bridge linking the traditional finance lenders to blockchain users. In fact, it has a base of traditional financial lenders and borrowers. Users who want to use the platform must register.
Upon registering, you can take out loans lasting as long as 12 months. Borrowers can only get loans that are worth 50 percent of their collateral. This is why they have the 50 percent loan-to-value ratio.
Also, these loans typically attract interest rates of 4.5 percent. The platform also offers different services like the interest earning lending options. With this, users can deposit bitcoin or Ether tokens with the company, and earn an interest an interest of 6.2 percent. This is better than just leaving your tokens sitting in your wallet.
It’s also a great option for earning passive income. BlockFi has institutional investment firms backing it. All loans issued on the platform are secured by Gemini, a proven and recognized financial institution in New York.
Known as peer-to-peer lending, these are decentralized blockchain platforms where people can directly lend and borrow ether tokens. Examples include Dharma Lever –this isn’t fully rolled out yet as it’s still in the alpha stage. Some require users to register to have access to their features, while others don’t.
Collaterals and Interest rates are often determined by the lenders, and the borrowers can either choose to accept or decline. The good thing about this platform though, is that people can choose the offers based on their preferences and capabilities.
This is another ether lending platform that has its own native token called LEND. While you may decide to skip using this, the reality is doing your transactions in the platform’s native LEND token will result in lowered or non-existent fees.
This is a lending-borrowing platform too. People can lend or borrow currencies like the LEND, ETH, TUSD, and DAI. Not just that, the platform accepts over 180 other ethereum tokens as collateral for loans.
You’ll need to sign up and register with the platform to use it too. So, if you’re looking for anonymity, you may need to go use another platform.
This is the second most popular decentralized lending platform after MakerDAO. As a totally decentralized platform, this fully utilizes smart contracts that are easily accessible with or without registration on the platform.
Lending and rates on the platform is largely set by the lenders themselves. Borrowers would then have to decide on which loans to take as well as the collaterals they’re willing to give up in order to access the loans.
Of course, collaterals are usually valued at 150 percent of whatever is loan value you want to take. Tokens used on the Compound platform include DAI, BAT, ETH, ZRX and REP.
This is the most popular decentralized ether lending platform. In fact, 2 percent of the world’s supply of ether is locked up in its Collateralized Debt Positions (CDPs). The platform’s native token is the DAI, a proven stablecoin that has proven its mettle by constantly maintaining its peg to the USD.
Borrowing on this platform involves locking up your Ether, and borrowing the DAI equivalent. While this works great, the platform is currently working on something called the Multi-Collateral DAI. With this, you can easily lock up other ethereum tokens and bitcoins in order to borrow some DAI.
The registration process is pretty simple and straightforward, with the website offering all the information you need to sign up and open your first MakerDAO CDP.
Once you’re done, withdrawal is a pretty straightforward process too. Once done, all you have to convert your DAI to regular currencies like the USD, EUR, and GBP.
Some people simply borrow the DAI and hold until Ether’s value falls and then they can cash it in. However, you must pay attention to the value of Ether. You want to make sure that even if the value falls, it doesn’t affect your currently locked-in 150 percent value.
Once it’s done, all that debt becomes liquidated by the platform in a bid to recoup its losses. Most of the time, they’ll just sell your ether to settle the loan.
Your loan can always be repaid and your ether reacquired whenever you’re ready, minus the stability fee.
Final Thoughts On Ethereum
As Bitcoin continues to rise in price, more consumers are exploring the possibility of getting in on the ground floor of a new cryptocurrency.
Readers need to understand that, although Ethereum has a lot of growing up to do, it is certainly making strides in the way of innovation and change. The creation of new blockchain technologies continues to entice many developers to give Ethereum a shot.
Obtaining Ether through a variety of different methods, consumers can get involved with the growing Ethereum community. Healthcare, law, and government are all industries with potential uses for a sustainable blockchain model.
As more and more professionals place growing stock in the importance of anonymity, sustainability, and decentralization, Ethereum has made itself a formidable challenger to even legitimate currencies in the 21st century.
While it may not get quite the publicity of Bitcoin, Ethereum is growing up—and it is definitely growing quickly.