A Comprehensive Look At Ethereum: Part 2

Ethereum is essentially a blockchain-based, worldwide, decentralized software platform. Its own cryptocurrency, ether, is by far the most visible product of the platform (ETH). Regardless of your level of technical expertise, you can utilize Ethereum to build a secure digital product. It features a token that can be exchanged for blockchain-related services, and which, if accepted, may also be used to purchase fiat currency.

Ethereum Decentralized Internet Infrastructure

DeFi is a distributed financial infrastructure that consists of blockchain-based financial apps. Open and programmable, decentralized from a single authority, and allowing for the creation of novel payment, investment, lending, and trading mechanisms set it apart from traditional financial networks. Customer-facing decentralized economic systems can be rapidly developed using smart contracts or distributed systems. 

Peer-to-peer borrowing and lending interest on crypto holdings, trading on decentralized exchanges, and many other services are just a few examples of what DeFi companies are already offering. Compound, Aave, UniSwap, and MakerDAO are just a few examples of well-known DeFi platforms.

With its native currency, Ether, the Ethereum network provides the backbone for decentralized applications (dApps) to function globally (ETH). Now, people worldwide may utilize apps and send money to one another without relying on each other’s words. Ether is the cryptocurrency used to conduct transactions and engage with smart contracts. 

It is also the currency used to compensate the miners that ensure the integrity of the network and execute trades.  The rules for regulation, administration, execution, and payment are all included in a smart contract, similar to a written agreement. They are considered “smart” because the code that creates them is immutable and executes itself once uploaded to the blockchain.

When a smart contract is deployed, it cannot be altered and becomes accessible to everybody. This type of transaction is deemed trustless since it is unnecessary to rely on the integrity of other users on the network. If all conditions specified in the smart contract aren’t met, the deal will not be finalized. The elegance of Ethereum is that it functions without any individual in the community knowing or trusting any other individual in the network.

As power is distributed more widely, more people can benefit. The system is managed by no central authority but by a global network of individual, privately owned computers. Developers from all across the world work together to keep the platform stable and up to date. Instead of passing data through an intermediary, users of this network share information directly with one another. Regardless of their faith or background, anyone can use it whenever they choose, without asking for permission.

Ethereum Metaverse Applications

In honor of the company’s first anniversary on September 14, 2021, Ethereum Towers, a megastructure consisting of 5,358 NFT apartments in the forthcoming Ethereum Worlds Metaverse, has announced the release of its pioneer metaverse prototype. The Ethereum Towers are located in the Ethereum Worlds Metaverse, created with newcomers in mind. To show how simple it is for a user who isn’t familiar with virtual reality or video games to move around in the metaverse, the new prototype has been designed with controllers and graphic elements inspired by real-world activities.

Since Ethereum Worlds serves more as a social platform than a game, users can simulate activities like traveling for a vacation or the movies, having a get-together with friends and coworkers, or showcasing an art collection without leaving their familiar surroundings. For example, videos shot in-world show how walls may be created and removed with the click of a button in the metaverse prototype and its corresponding “companion app” for non-VR interactions. The prototype also demonstrates the simplicity of placing and relocating furniture, showing that even people with no prior experience with video games or virtual reality headsets can quickly become proficient with the controls.

NFT house owners at Ethereum Towers have access to a sophisticated yet intuitive designer that allows them to create a virtual residence that is as unique as they are. Outside of their apartments, visitors and residents will be able to assemble in great, romantic, curated spaces created by award-winning. These legitimate architects have been permitted to build for Oculus.

The Ethereum 2.0 Merge

Ethereum 2.0 will introduce a proof-of-stake protocol. In addition, the original Ethereum network will merge with Beacon Chain, which is Ethereum 2.0’s first new feature, between 2020 and 2022. 

The Ethereum Merge is the process by which the proof-of-stake (PoS) Beacon Network and the proof-of-work (PoW) Ethereum Mainnet are combined. Ethereum’s transition to a Proof-of-Stake architecture was completed in the middle of September 2022. It has resulted in the development of Ethereum 2.0. As a result, the energy needed to run Ethereum will drop by 99.65 percent, allowing the Ethereum ecosystem to grow even more significant.

All validators on the blockchain are now required to stake or lock up 35 ether (ETH) as part of the changeover. Investors’ holdings of Ether tokens will be unaffected, and the functionality of Ethereum-based applications will continue unabated. However, users may be unable to move Ethereum-based assets around during the integration.

Ethereum Consensus Mechanism

To reach an agreement on the configuration of a blockchain network, nodes must use a set of protocols, incentives, and ideas collectively known as a “consensus mechanism.” Ethereum’s crypto-economic security is based on a system of incentives and punishments applied to stakes-locked capital. This system is at the heart of its proof-of-stake consensus mechanism. Because of this incentive structure, individual stakes are incentivized to run trustworthy validators, while dishonest validators are deterred, and the cost of attacking the network is prohibitively high.

The protocol then determines how trustworthy validators are chosen to suggest or validate blocks, handle transactions, and cast votes on which node they believe to be the chain’s head. The ‘heaviest’ chain, as indicated by the number of panelists that voted for it and the amount of EtherEther they have staked, is chosen through a fork-choice mechanism in the unlikely event that many blocks are located on the exact location near the top of the chain.

What is Ethereum TPS?

Currently, Ethereum can now only handle 13 TPS. It increases the rate of transactions on the network by 759,100%. Ethereum will overtake the likes of Binance Chain, Ripple, Solana, Fantom, Algorand, Avalanche, Cosmos, and Cardano to become one of the quickest blockchains. After the Merge update, the Ethereum platform will completely transition from the PoW consensus process to the PoS method.

Ethereum Active Wallets

Ethereum (ETH) seems to be increasingly prominent than ever, particularly amongst small investors, and has a market cap of more than $358 billion at the time of writing, per CoinMarketCap. Glassnode, an on-chain analytics platform, reports that the number of Ethereum digital wallets that contain at least 0.1 ETH (now $332) has reached an all-time high. Let’s look at the number of active wallets on Glassnode that are keeping the same amount of ETH as in January of this year. We discover that it is currently approximately 3.8 million, an increase of nearly 10%.

Ethereum Partnerships

To use blockchain technology, 32 of the top 50 organizations on Forbes’ Blockchain top 50 list have opted for the Ethereum network. For ETH holders and the blockchain sector as a whole, that’s fantastic news. In addition, the Enterprise Ethereum Coalition’s efforts to develop open blockchain specifications appear to bear fruit. Business activity is currently concentrated on the Ethereum platform, followed by IBM’s Blockchain, Bitcoin and Hyperledger.

And who have some of these businesses placed their confidence in Ethereum? Well then, let’s get started right now!

Amazon Web Services

Because cryptocurrencies have become more mainstream in recent years, Amazon has a better grasp their requirements for blockchain technology. Since Amazon Web Services is the company’s most lucrative division, it decided to develop blockchain-related solutions for more conventional businesses interested in using the technology. Despite widespread belief to the contrary, most established companies are not eager to build their blockchain network but are interested in exploring the potential benefits of blockchain technology. As a result, a blockchain framework created on Ethereum’s original language, Solidity, is now available on AWS.

JP Morgan

In February, it was reported that JP Morgan began developing its cryptocurrency. The American financial institution and its collaborators developed Quorum, a business variant of the Ethereum network tailored to the needs of more conventional back-office operations. JPMorgan was the first financial institution to create and test a digital currency equivalent to the US dollar. You’ll need to use it to make immediate purchases with others who utilize the payment service.

Amalto

ConsenSys, a well-known blockchain corporation focusing on Ethereum development, has partnered with Amalto, a company specializing in field data management. They collaborated to develop a system that streamlines the order-to-payment cycle for the oil and gas sector via electronic tickets. As a result, the gas and oil industry’s adoption of blockchain technology, Ethereum, would be profoundly altered by the merger of ConsenSys and Amalto.

Microsoft Azure

Software industry frontrunner Microsoft has created its Azure cloud storage platform on Ethereum. Benefits to global corporate operations are substantial thanks to the blockchain-based solution that allows developers to link and integrate multiple services and tools in one central location. In response, Microsoft has announced plans to develop a suite of Ethereum-based cloud-based applications for its customers. As a result, at least one well-known company stands to gain from a productive partnership involving Microsoft and Ethereum.

Ethereum Integrations

You may create a blockchain-based on Substrate that works with Ethereum addresses and accounts and executes Solidity smart contracts by utilizing crates from the Frontier project and integrating the Ethereum and EVM pallets into your runtime.

To store information and reach consensus on its state, users in the Ethereum network use a virtual computer called Ethereum Virtual Machine (EVM). The EVM pallet in Substrate implements the essential EVM functionality for a blockchain to function. For example, smart contracts developed with high-level programming language like Solidity are compiled by EVM bytecode and then executed by the EVM pallet. Some of Ethereum’s top interagtions include:

1inch

1inch Network is an ecosystem of decentralized protocols that work together to provide the most profitable, quickest, and secure operations possible in the DeFi industry. The 1inch Platform’s first and most prominent protocol is a decentralized exchange (DEX) aggregator solution, which analyzes deals across many liquidity sources to provide consumers with better prices than any single exchange. The Pathfinder algorithm used in this protocol determines the most advantageous routes between various marketplaces. 

YouHodler

In the world of cryptocurrency banking, YouHodler represents the cutting edge. You may trade cryptocurrencies, make cryptocurrency loans, and earn interest on your holdings. These choices broaden your cryptocurrency portfolio’s potential for profit.

BitKeep

BitKeep is Asia’s leading decentralized inter-digital wallet because it combines Swap, Wallet, NFT, DApp, Market, and Discover into one convenient Platform. BitKeep, which has approximately five million users in 166 countries and territories, has partnered strategically with many of the top 30 mainnets to become their official wallet.

How is Ethereum Disrupting The Traditional Payment methods?

When Ethereum fully adopts proof-of-stake, it will pose a significant threat to the regulatory clout of existing financial institutions and legacy banks. The evidence suggests that this kind of disruption is already happening. Since crypto-yield has garnered so much interest, banks in the US have likely started to feel the effects of tighter regulation in recent months.

Annualized return on Ethereum staked is predicted to be around 5% and 7%. Currently, conventional financial institutions cannot compete with such low-interest rates. Furthermore, as Ethereum is digital, the SEC cannot certainly ‘ban’ or properly control this payout. Banks that have been around for a while will have little choice but to match the interest rates offered by Ethereum once it makes the switch to proof-of-stake and begins offering high returns with minimal risk. To restate an earlier argument, nation-states and banks’ monopoly over money is weakening.

The Ethereum network fills a need among investors. It is why Ethereum may cause so much upheaval. In other words, a more streamlined financial system is helping to sate the hunger for returns among retail investors. Ethereum is the first blockchain to open previously exclusive investment options to the general public. 

Assuming they are granted a license from relevant authorities to operate Ethereum’s DeFi apps, cryptocurrency exchanges have the potential to expand at an unprecedented rate. The US government agencies, however, could be more enthusiastic. Authorities are currently ignoring cryptocurrency because it is challenging to tax.

The Future Of Ethereum

A few years back, the general public had the impression that criminals and other high-risk individuals utilized cryptocurrency. However, what people think of it now is different. More and more people are beginning to see that cryptocurrencies like Bitcoin have the potential to revolutionize the financial system.

It is significant because it might lead to unprecedented levels of adoption. This potential is much more effective for Ethereum, currently the second-largest cryptocurrency. It’s because Ethereum is a framework for digitalizing any financial service, in addition to its market visibility. Thanks to all of these factors, it has the potential to stage a remarkable comeback in 2023 and far exceed its previous all-time highs. Ethereum may have begun the year in the red, but it may be different from 2022 to 23. Ethereum’s price has dropped several times, only to recover and sometimes even increase by a factor of three in a short period.

For instance, Ethereum jumped from $123 to $359 from January 2020 through February 2020. Close to the month’s conclusion, it hit a low of $132. It quickly began to rise, and in December 2020, it’d have reached a price of $1030. Most projections put Ethereum’s potential for fresh highs around the latter half of 2023. To sum up, experts believe Ethereum will continue to be very volatile, despite its promising potential. The general assumption has been that Ethereum will provide greater returns than Bitcoin, although Bitcoin is widely anticipated to maintain its position as the market leader among cryptocurrencies.

Due to Ethereum’s current cheap price, this might be a good moment to buy some Ether. By the end of the year, the value of cryptocurrency may have increased by a more significant margin than anybody had anticipated. In addition, the rising interest in Ethereum has prompted some very bullish price predictions for 2023. U.S.-based software developer Bernado Schucman is one of the optimists. Schucman predicts that Ethereum’s price will hit $20,000 by the year 2023 due to the development of the DeFi ecosystem and the widespread use of its technologies.

What is Ethereum Tokenomics?

Tokenomics is a discipline that studies the dynamics of token economies, including how tokens are created and traded, as well as their supply, distribution, and returns. It “gamifies” cryptos by providing a framework for attracting and motivating investors to adopt a standard protocol. Users might be rewarded for good behaviour or punished for bad behaviour.

It’s unrealistic to think that tokenomics would be stable if you randomly create millions of tokens and issue them. Tokens that facilitate the usage of a protocol are crucial, as are the protocol itself and any associated smart contracts. In and of itself, Ethereum is a network where smart contracts may be executed. Both programmers and end users may use these “smart contracts” by issuing a transaction that triggers the execution of predefined actions after specific circumstances have been satisfied.

Assume I want to lend a friend 10 ETH if he gambles away his entire holdings and ends up with nothing. If my friend’s Ethereum wallet becomes depleted, I will immediately program a smart contract to transfer ten Ether to his address. Such smart contracts and the transactions they enable rely on mining miners and consumers paying fees. Tokenomics will be drastically altered due to impending changes to variables like token burning, token emissions and token minting.

A great deal of change is coming to Ethereum in the near future. For example, the network will soon begin adopting a PoS consensus architecture, replacing the current PoW system. Tokenomics and Ethereum’s usefulness will be profoundly affected by these massive shifts.

Ethereum Use Cases

The immutability and visibility of Ethereum make it an excellent foundation for distributed apps and services. In addition, finance, health, and politics might benefit from the Ethereum system.

Decentralized finance (DeFi)

Ethereum’s decentralized financial applications (or “DeFi” for short) are one of the most exciting potential uses of the platform. Among them are decentralized markets, stablecoin minting, and loans facilitated by smart contracts. One such initiative is “MakerDAO,” which uses complex Ethereum smart contracts to issue a stablecoin (DAI) pegged to the value of Ether (ETH) at $1 per token.

Tokenization Of Real-world Assets

Ethereum has the potential to be among the platforms that facilitate the massive growth that is anticipated in the security token industry, which is estimated to be worth trillions. Security tokens are digital representations of tangible assets like equities, real estate, precious metals and more that can be traded on the blockchain. Tokenizing such assets on the blockchain makes it simpler for issuers to transfer and sell them than if they had a formal representation on paper.

Security infrastructure

It is far more difficult for a hacker to enter into, say, a website to steal your private information since there is no centralized server for them to assault.

Payments

The global economy rests on the backs of trade, and Ethereum will fundamentally alter them. “Smart contracts” may be created on Ethereum. They allow for the safe and secure transfer of any wealth. The agreement is not made on paper as in the ancient days but in computer code.

Politics

If you’ve made it this far in the article, you’re more innovative and informed than the typical citizen. Consequently, it’s possible that every few years (or more often, depending on your nation), you’ll cast a ballot for a political party you believe should be in charge.

How Does Ethereum Impact People?

Ethereum can benefit society significantly by resolving social trust concerns and broadening access to financial services, especially in underdeveloped countries. Some individuals see Ethereum as a tool to help third-world economies develop. Ethereum improves the trackability of money and may help more people access financial services. As a result, people in underdeveloped countries will have a chance to lift themselves out of poverty.

It is easier and less expensive for those living in underdeveloped nations to make financial transactions using cryptocurrency exchanges. For this reason, it is not surprising to see such a high Ethereum acceptance rate in these areas. Moreover, in emerging regions, Ethereum trading is accessible to most individuals with middle-class incomes.

The lack of convenient banking options contributes to Ethereum’s popularity in third-world nations. Bank accounts are not widely available in underdeveloped countries, leaving some individuals and enterprises needing a secure financial foundation. In addition, people in these areas cannot engage in e-commerce since traditional banking services are unavailable. This is because they may need more infrastructure to process funds sent from outside.

Some people in third-world countries can leave extreme poverty because of Ethereum. In addition, Ethereum helps consumers overcome problems like a scarcity of banking options and a lack of trust among peers. Developing countries may fix the flaws in the old financial system if they expand access to banking services and improve the transparency of their money transfers.

Ethereum will continue to be successful as a cryptocurrency as long as it is the dominant Dapps platform, particularly in DeFi.

If you enjoyed this article, you may also enjoy…

Introduction to Ethereum 1

The Ethereum Mafia

The 2022 FIFA World Cup Drives Crypto to Mainstream Adoption

Check out the home page of Exploring Digital Assets for additional insights, reports and news!

For media, content or writing inquiries please contact Patrick Hagerty at PatrickJHags@gmail.com

One thought on “A Comprehensive Look At Ethereum: Part 2

Leave a Reply